elf Beauty Inc (ELF) 2020 Q3 法說會逐字稿

Greetings. Welcome to the e.l.f. Beauty, Inc. Third Quarter Fiscal 2020 Earnings Conference Call. (Operator Instructions) Please note, this conference is being recorded. I will now turn the conference over to your host, Willa Mcmanmon, VP of Investor Relations and Corporate Communications. Ms. McManmon, you may begin.

問候。歡迎來到 e.l.f.美容公司2020 財年第三季度收益電話會議。（操作員說明）請注意，本次會議正在錄製中。現在我將會議交給東道主投資者關係和企業傳播副總裁威拉·麥克曼蒙 (Willa Mcmanmon)。麥克曼蒙女士，您可以開始了。

Good afternoon. Thank you for joining us today to discuss e.l.f. Beauty's third quarter fiscal 2020 earnings results. As a reminder, this call contains forward-looking statements that are based on management's assumptions, expectations, estimates and projections. These statements, including those relating to the company's fiscal 2020 outlook and long-term model, 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.

下午好。感謝您今天加入我們討論 e.l.f.Beauty 2020 財年第三季度盈利結果。提醒一下，本次電話會議包含基於管理層的假設、預期、估計和預測的前瞻性陳述。這些陳述，包括與公司 2020 財年展望和長期模式相關的陳述，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 me from management today are Tarang Amin, Chairman and Chief Executive Officer; and Mandy Fields, Senior Vice President and Chief Financial Officer.

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。

Tarang will begin the call.

Tarang 將開始通話。

Thank you, Willa, and good afternoon, everyone. We're pleased with our third quarter results with net sales of $81 million and adjusted EBITDA of $21 million. Excluding e.l.f. stores, net sales were up 8% versus a year ago.

謝謝你，威拉，大家下午好。我們對第三季度的業績感到滿意，淨銷售額為 8100 萬美元，調整後 EBITDA 為 2100 萬美元。不包括 e.l.f.商店淨銷售額比去年同期增長 8%。

In the 12 weeks ended December 28, 2019, our dollar share of the color cosmetics category was 5%, up 40 basis points versus a year ago, even with the short-term impact of a smaller holiday program.

截至 2019 年 12 月 28 日的 12 週內，我們在彩妝品類中的美元份額為 5%，比一年前增長了 40 個基點，儘管假期計劃規模較小帶來了短期影響。

For calendar year 2019, of the top 5 mass color cosmetics brands in Nielsen, we grew the most market share. Reflecting our strong results, we are again raising guidance. We've driven these results through relentless focus on 5 strategic imperatives that we've discussed with you over the past year.

2019 日曆年，在尼爾森排名前 5 的大眾彩妝品牌中，我們的市場份額增長最多。為了反映我們的強勁業績，我們再次提高了指引。我們通過不懈地關注過去一年與您討論的 5 項戰略要務，推動了這些成果。

Let me give you a brief overview of each imperative, how our strategy works together, and why I'm encouraged about our long-term potential. Our first strategic imperative, driving demand in the brand continues to exceed our expectations with success across platforms. Marketing and e-commerce spend for the quarter was approximately 11.5% of revenue versus 7% a year ago. This rate was about 150 basis points below our objectives due to the timing of some of the spend, which was pushed into the fourth quarter. We are measuring the success of our investments, primarily by looking at top line growth alongside internal metrics on REIT, conversion and engagement as well as external metrics like Google Search and earned media value, all of which exceeded our expectations.

讓我向您簡要概述每項必要性、我們的戰略如何協同運作，以及為什麼我對我們的長期潛力感到鼓舞。我們的首要戰略要務是通過跨平台的成功推動品牌需求繼續超出我們的預期。本季度的營銷和電子商務支出約佔收入的 11.5%，而去年同期為 7%。由於部分支出的時間安排被推遲到第四季度，這一比率比我們的目標低約 150 個基點。我們正在衡量投資的成功，主要通過關注營收增長以及 REIT、轉化和參與度等內部指標以及 Google 搜索和贏得媒體價值等外部指標，所有這些都超出了我們的預期。

Last quarter, we discussed our elfingamazing campaign. Based on its success, this month, we are launching the second phase of our awareness campaign, which will further amplify our e.l.f. mission of making the best of beauty accessible to every eye, lip and face.

上個季度，我們討論了 elfingamazing 活動。基於其成功，本月我們將啟動第二階段的宣傳活動，這將進一步擴大我們的 e.l.f.使命是讓每一個眼睛、嘴唇和臉部都能享受到最好的美麗。

We previously shared the early results of our EyesLipsFace TikTok challenge. The challenge has now garnered over 4.4 billion views on TikTok with over 3 million user-created videos, a record for any brand challenge. While these numbers are impressive by any measure, it's our ability to seize on social momentum that we want to underscore. We started the campaign by creating an original 15-second eyes.lips.face. song as a backdrop to user-generated videos.

我們之前分享了 EyesLipsFace TikTok 挑戰的早期結果。目前，該挑戰賽已在 TikTok 上獲得了超過 44 億的觀看次數，用戶創作的視頻超過 300 萬個，創下了品牌挑戰賽的紀錄。儘管這些數字無論以何種標準衡量都令人印象深刻，但我們想要強調的是我們抓住社會動力的能力。我們通過創建一個原創的 15 秒 eyes.lips.face 開始了該活動。歌曲作為用戶生成的視頻的背景。

By the campaign's close, this evolved into a full-length eyes.lips.face. music video in conjunction with billboard's 2019 label of the year Republic Records. Throughout this TikTok journey, we learned the importance of being nimble and open to new approaches to connect with our consumers. It also showed us that strong partners are an imperative in this new digital landscape. Among many awards and accolades, Adweek called eyes.lips.face. the most influential campaign on TikTok, and we were also featured by Forbes as one of the 14 social campaigns that rocked 2019.

到活動結束時，它演變成全長的眼睛、嘴唇、臉。與公告牌 2019 年度廠牌 Republic Records 聯合製作的音樂視頻。在 TikTok 的整個旅程中，我們了解到靈活並開放地採用新方法與消費者建立聯繫的重要性。它還向我們表明，在這個新的數字環境中，強大的合作夥伴勢在必行。在眾多獎項和榮譽中，《廣告周刊》稱其為“eyes.lips.face”。TikTok 上最具影響力的活動，我們還被《福布斯》評為 2019 年震撼的 14 項社交活動之一。

With a similar eye to innovation and partnership, in November, we proudly hosted e.l.f's. fourth annual Beautyscape event, which reflects our brand values of empowerment and paying it forward. This year's Beautyscape built on prior year's events with an amped up vision, including 2.5x entrants compared to 2018. Finalists joined us in the Bahamas to connect with beauty industry leaders, including keynote speaker, entrepreneur and celebrity hairstylist, Jen Atkin.

出於對創新和合作的同樣關注，我們在 11 月自豪地舉辦了 e.l.f's。第四屆年度 Beautyscape 活動，體現了我們賦能並傳承的品牌價值觀。今年的 Beautyscape 以去年的活動為基礎，視野更加廣闊，參賽人數是 2018 年的 2.5 倍。決賽入圍者在巴哈馬與我們一起與美容行業的領導者進行交流，其中包括主講人、企業家和名人髮型師 Jen Atkin。

Attendees who are handpicked for their vision and love of beauty, attended master classes and lectures to take their careers to the next level. Ultimately, they competed in teams to present their best original color cosmetics capsule. The winning team received a cash prize, and together, will introduce their e.l.f. collection this summer, exclusively through our national retailer partner Target who also attended Beautyscape.

因對美的遠見和熱愛而被精心挑選的與會者參加了大師班和講座，以將他們的職業生涯提升到一個新的水平。最終，他們以小組形式參賽，展示了他們最好的原創彩妝膠囊。獲勝團隊將獲得現金獎勵，並將一起介紹他們的 e.l.f.今年夏天的系列，獨家通過我們的全國零售商合作夥伴 Target 進行，該合作夥伴也參加了 Beautyscape。

As we continue to explore new ways to tell our story, we are humbled that the recognition our branding efforts are receiving. We recently won 3 creative media awards, including Best in Show. We've also been nominated for 3 Webby awards and 2 REGGIE awards in January alone. Our efforts continue to result in more social followers as well with our Instagram followers reaching over 5 million, up 27% versus a year ago.

當我們繼續探索新的方式來講述我們的故事時，我們對我們的品牌努力得到的認可感到謙卑。我們最近贏得了 3 項創意媒體獎，包括最佳展示獎。僅一月份，我們就獲得了 3 項威比獎和 2 項 REGGIE 獎提名。我們的努力不斷吸引更多的社交關注者，我們的 Instagram 關注者數量已超過 500 萬，比一年前增長了 27%。

Our second strategic imperative, a major step-up in digital goes hand-in-hand with driving demand in the brand. Our digital efforts center on seamlessly tying together our channels to offer a consistent e.l.f. experience. As part of this effort, our tech stack integration is becoming increasingly more sophisticated. e.l.f. was front and center at Salesforce's Dreamforce conference as the only beauty company utilizing the entire Salesforce cloud platform across commerce, marketing and customer service.

我們的第二個戰略要務是數字化的重大進步與推動品牌需求齊頭並進。我們的數字化工作集中於將我們的渠道無縫地結合在一起，以提供一致的 e.l.f.經驗。作為這項努力的一部分，我們的技術堆棧集成變得越來越複雜。e.l.f.作為唯一一家在商業、營銷和客戶服務領域利用整個 Salesforce 雲平台的美容公司，在 Salesforce 的 Dreamforce 會議上處於前沿和中心位置。

To highlight a few of these digital initiatives. In the third quarter, we launched [e.l.f. e], our customer service engine to serve our e-commerce consumers 24/7. We made progress enhancing personalization to make the consumer journey more engaging for our 1.6 million Beauty Squad members, who account for over 65% of our e-commerce sales.

重點介紹其中一些數字舉措。第三季度，我們推出了[e.l.f.e]，我們的客戶服務引擎，為我們的電子商務消費者提供 24/7 的服務。我們在增強個性化方面取得了進展，使我們的 160 萬 Beauty Squad 會員的消費者旅程更具吸引力，這些會員占我們電子商務銷售額的 65% 以上。

Our personalization efforts offers a single view of the consumer allowing us to incorporate past purchases, views and likes to customize what's being served to them online.

我們的個性化工作提供了消費者的單一視圖，使我們能夠整合過去的購買、觀點和喜好來定制在線為他們提供的服務。

In conjunction with this, we saw solid results in the early phase of receipt scanning. Connecting us to even more data to enhance the Beauty Squad experience. To make purchasing e.l.f. easier, we've implemented Afterpay in Google 360 so e.l.f. consumers can pay in the way that best suits them.

與此同時，我們在收據掃描的早期階段看到了可靠的結果。將我們連接到更多數據，以增強 Beauty Squad 的體驗。使採購 e.l.f.更簡單的是，我們在 Google 360​​ 中實施了 Afterpay，因此 e.l.f.消費者可以按照最適合自己的方式進行支付。

Perhaps the most exciting is the launch of our new mobile app on Apple and Google, which will further enable receipt scanning and personalization. Our third imperative of providing first to mass prestige quality products continues to drive competitive advantage. We've mentioned the success of our Holy Hydration skin cream, 16-hour Camo Concealer and Poreless Putty Primer, all of which were introduced around this time last year.

也許最令人興奮的是我們在 Apple 和 Google 上推出的新移動應用程序，這將進一步實現收據掃描和個性化。我們的第三個當務之急是提供一流的大眾優質產品，繼續推動競爭優勢。我們已經提到了我們的 Holy Hydration 護膚霜、16 小時迷彩遮瑕膏和 Poreless Putty Primer 的成功，所有這些產品都是在去年這個時候推出的。

We are building on these proven holy grail products with extensions, including Holy Hydration! Fragrance Free, hydrating Camo Concealer and luminous and matte Putty Primers. These extensions were created in response to e.l.f. consumer requests.

我們正在這些經過驗證的聖杯產品的基礎上進行擴展，包括 Holy Hydration！不含香料、保濕的迷彩遮瑕膏以及發光和啞光膩子底漆。這些擴展是為了響應 e.l.f. 而創建的。消費者的要求。

Additionally, we are introducing new holy grail products like our liquid glitter eye shadow, which is $5 compared to the $24 Prestige equivalent. These products are bringing new consumers into the brand, with 65% of Liquid Glitter Eyeshadow purchases on elfcosmetics.com coming from new customers.

此外，我們還推出了新的聖杯產品，例如液體閃光眼影，其售價為 5 美元，而 Prestige 的售價為 24 美元。這些產品為該品牌帶來了新消費者，elfcosmetics.com 上 65% 的 Liquid Glitter Eyeshadow 購買量來自新客戶。

Beyond Liquid Glitter Eyeshadow, we're encouraged that 5 of our top 10 SKUs on elfcosmetics.com, our recently introduced items. Our ability to deliver a stream of new products that deliver the best of beauty at extraordinary value, continues to fuel our strategic imperatives. One of our key areas of focus is expanding our skin care offerings. We are seeing success with core products like Holy Hydration cream and hydrating Booster Drops. We also continue to push into new areas, such as our Cannabis Sativa line, which has maintained a steady pace in our top 5 sellers on elfcosmetics.com, since its introduction in November.

除了液體閃光眼影之外，elfcosmetics.com 上排名前 10 的 SKU 中的 5 款是我們最近推出的商品，這令我們深受鼓舞。我們有能力提供一系列新產品，以非凡的價值提供最佳的美容效果，這將繼續推動我們的戰略需求。我們的重點關注領域之一是擴大我們的護膚產品範圍。我們看到了 Holy Hydration Cream 和 Hydrating Booster Drops 等核心產品的成功。我們還繼續進軍新領域，例如我們的 Cannabis Sativa 系列，自 11 月推出以來，該系列一直穩居 elfcosmetics.com 前 5 名賣家之列。

Our overall skin care business continues to show strong growth, up 35% in track channels in Q3. Unicorn, the project that guides our fourth strategic imperative of improving national retailer productivity is entering its third phase centered on better visual merchandising at shelf.

我們的整體護膚業務繼續呈現強勁增長，第三季度渠道增長 35%。獨角獸是指導我們提高全國零售商生產力的第四個戰略要務的項目，該項目正在進入以更好的貨架視覺營銷為中心的第三階段。

Going into spring resets, we're implementing over 100 different planograms across our retailers, each featuring new visual merchandising. In terms of shelf space, we've confirmed some additional space in grocery and at Boots in the U.K. We expect further space decisions from other retail partners later in the year.

進入春季重置後，我們在零售商中實施了 100 多種不同的貨架圖，每一種都具有新的視覺營銷效果。在貨架空間方面，我們已經確認了英國雜貨店和 Boots 的一些額外空間。我們預計其他零售合作夥伴將在今年晚些時候做出進一步的空間決定。

Unicorn is also driving better merchandising results as we continue to see strong productivity across our national retail partners. Perhaps the best example of this is our Target flex towers, which provides us both incremental space and a vehicle to showcase our new products. The next wave of these Target flex towers shipped in the third quarter, which partially offset the impact of a smaller 2019 holiday program. Performance at other national retailers was strong with 1 highlight being skincare momentum across the full chain at Ulta Beauty.

隨著我們繼續看到全國零售合作夥伴強勁的生產力，獨角獸也正在推動更好的銷售業績。也許最好的例子就是我們的 Target 柔性塔，它為我們提供了增量空間和展示新產品的工具。下一波 Target 柔性塔機將於第三季度發貨，部分抵消了 2019 年假期計劃規模較小的影響。其他全國性零售商的表現也很強勁，其中一大亮點是 Ulta Beauty 整個連鎖店的護膚勢頭強勁。

Our overall international business was down in Q3 as we reduce reliance on international distributors. We made the shift in the U.K. several years ago, and it's paying off today. In the third quarter, growth within our key U.K. retail partners, Boots and Superdrug was particularly strong. We expect that momentum to continue as we look to more than double our presence at Boots over the next 12 months and expand space incrementally at Superdrug.

由於我們減少了對國際分銷商的依賴，我們的整體國際業務在第三季度有所下降。幾年前，我們在英國做出了轉變，如今已初見成效。第三季度，我們的英國主要零售合作夥伴 Boots 和 Superdrug 的增長尤其強勁。我們預計這一勢頭將持續下去，因為我們希望在未來 12 個月內將 Boots 的業務擴大一倍以上，並逐步擴大 Superdrug 的空間。

In the third quarter, we held our first ever large-scale consumer event in the U.K. at GLAMOUR Beauty Festival with nearly 5,000 attendees. The enthusiasm we saw there was reflected in U.K. Beauty Awards from Cosmo, Glamor and Gloss. A fivefold increase in our earned media value in the U.K. We were also honored to receive a supplier award from Superdrug for best new cosmetics launch in 2019 for our Poreless Putty Primer.

第三季度，我們在英國舉辦了首次大型消費者活動 GLAMOR Beauty Festival，有近 5,000 名與會者。我們看到的熱情在 Cosmo、Glamour 和 Gloss 等英國美容獎中得到體現。我們在英國贏得的媒體價值增加了​​五倍。我們還很榮幸憑藉我們的 Poreless Putty Primer 榮獲 Superdrug 頒發的 2019 年最佳新化妝品推出供應商獎。

In other markets, our most significant activity for the quarter was bringing our China e-commerce business in-house from a distributor, which will allow us to better control pricing, marketing and the pace of new product launches. This is an important move to begin penetrating the China market in a more meaningful way. In terms of China, we are closely monitoring developments regarding the coronavirus. We would note that our e.l.f. offices, labs and key suppliers are at least 500 miles from Wuhan. We have a deep and geographically diverse supply chain within China. It is too soon to know the impact to our operations other than the later start-up post Chinese New Year. We have an amazing e.l.f. team in Shanghai and strong network of suppliers, who we just saw during our annual supplier summit, and we're working closely with them. Our thoughts are with our colleagues and those impacted by recent events.

在其他市場，我們本季度最重要的活動是將我們的中國電子商務業務從分銷商手中轉移到內部，這將使我們能夠更好地控制定價、營銷和新產品發布的節奏。這是開始以更有意義的方式滲透中國市場的重要舉措。就中國而言，我們正在密切關注冠狀病毒的事態發展。我們會注意到我們的 e.l.f.辦公室、實驗室和主要供應商距離武漢至少 500 英里。我們在中國擁有深厚且地域多元化的供應鏈。除了農曆新年後較晚的啟動之外，現在判斷對我們運營的影響還為時過早。我們有一個了不起的 e.l.f.我們剛剛在年度供應商峰會上看到了上海的團隊和強大的供應商網絡，我們正在與他們密切合作。我們與我們的同事以及受最近事件影響的人們同在。

Turning to our fifth strategic imperative of generating cost savings to help fuel brand investments. I'll reiterate that our most important cost savings initiative was closing our 22 e.l.f. branded stores last February. We redeployed the $13.7 million in annual spend on stores through our strategic imperatives, particularly driving demand in the brand. We're also seeing benefits from the automation of our warehouse facilities. Our new liquid fill manufacturing facility in Southern California should start operations in the next 6 weeks. Mandy will discuss what we're seeing in terms of price increases and tariff dynamics. But in summary, they remain favorable and a driver of our gross margin progress. Make no mistake, our execution of these 5 strategic imperatives has led to growth in a down category. We will provide FY '21 guidance during our Q4 call.

轉向我們的第五個戰略要務，即節省成本以幫助推動品牌投資。我要重申，我們最重要的成本節約舉措是關閉我們的 22 e.l.f.去年二月的品牌店。我們根據戰略需要重新部署了每年 1,370 萬美元的商店支出，特別是推動品牌需求。我們還看到了倉庫設施自動化帶來的好處。我們位於南加州的新液體灌裝製造工廠將於未來 6 週內開始運營。曼迪將討論我們在價格上漲和關稅動態方面所看到的情況。但總而言之，它們仍然是有利的，並且是我們毛利率進步的推動力。毫無疑問，我們對這 5 項戰略要務的執行導致了下行類別的增長。我們將在第四季度電話會議期間提供 21 財年的指導。

Meanwhile, I'd like to step back and touch on our longer-term model for the company. Over almost 16-year history, we grew in every year except calendar 2018. This year, it was critical for us to reestablish growth. Having done so, I'd like to share what we're seeing in the model over the next 3 years. With the momentum we're building in the brand, we believe we can continue to grow share. We also believe we have an opportunity to grow shelf space significantly at our current national retailers and in new markets internationally. Space gains are episodic, and even when we get that space, it often takes time to optimize shelf productivity. That's why our focus has been on executing our strategic imperatives. With growth, innovation and a brand that consumers love, we believe we'll earn more space over time.

與此同時，我想退一步談談我們公司的長期模式。在近 16 年的歷史中，除了 2018 年，我們每年都在成長。今年，對我們來說重建增長至關重要。完成此操作後，我想分享一下我們在未來 3 年中在該模型中看到的內容。憑藉我們在品牌中建立的勢頭，我們相信我們可以繼續擴大份額。我們還相信，我們有機會在現有的國內零售商和國際新市場上大幅增加貨架空間。空間的增加是間歇性的，即使我們獲得了這些空間，通常也需要時間來優化貨架生產力。這就是為什麼我們的重點是執行我們的戰略要務。憑藉增長、創新和消費者喜愛的品牌，我們相信隨著時間的推移，我們將贏得更多的空間。

Over the next 3 years, without major additional space or strategic extensions, we expect compounded annual top line growth in the low to mid-single digits. As we layer in potential space gains and strategic extensions, we believe this is a business that should grow in the mid- to high single digits. In both cases, we see leverage that comes with sales growth. We expect adjusted EBITDA growth to outpace net sales growth. We believe that this model of balanced growth in both the top and bottom line makes for an attractive long-term business.

未來 3 年，如果沒有重大的額外空間或戰略擴展，我們預計年復合營收將保持在低至中個位數的水平。隨著我們考慮潛在的空間收益和戰略擴展，我們相信這項業務應該以中高個位數增長。在這兩種情況下，我們都看到了銷售增長帶來的槓桿作用。我們預計調整後的 EBITDA 增長將超過淨銷售額增長。我們相信，這種收入和利潤平衡增長的模式將帶來有吸引力的長期業務。

One of the things that gives me confidence in our model is our success in growing gross margin from 42%, just a few years ago, to over 63%. There was concern earlier this year on the impact of tariffs, which we have so far successfully navigated with a slight expansion in gross margin. We've taken much of this historical margin expansion and reinvested it in the business.

讓我對我們的模式充滿信心的事情之一是我們成功地將毛利率從幾年前的 42% 提高到了 63% 以上。今年早些時候，人們對關稅的影響感到擔憂，到目前為止，我們已經成功地應對了關稅的影響，毛利率略有上升。我們已經利用了歷史上利潤增長的大部分並將其重新投資於業務。

First, in the form of team and infrastructure and more recently in brand support. We believe that the team and capability that we have built can be leveraged for additional growth opportunities. Our strong cash position of almost $75 million at the end of Q3 gives us the opportunity to pursue strategic extensions that can further leverage our capabilities and differentiate our brand portfolio. We believe good uses of cash include small tuck-in acquisitions in adjacent categories or spaces as well as creating our own brands. We believe such strategic extensions in combination with our strategic imperatives, provide further confidence in the short-term as well as longer-term growth potential.

首先，以團隊和基礎設施的形式，以及最近的品牌支持。我們相信，我們建立的團隊和能力可以用來獲得更多的增長機會。截至第三季度末，我們擁有近 7500 萬美元的強勁現金狀況，這使我們有機會進行戰略擴展，從而進一步利用我們的能力並使我們的品牌組合脫穎而出。我們認為，現金的良好用途包括在相鄰類別或領域進行小額收購以及創建我們自己的品牌。我們相信，此類戰略擴展與我們的戰略要求相結合，將為短期和長期增長潛力提供進一步的信心。

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

這樣，我就把電話轉給曼迪。

Thank you for covering the Q3 highlights Tarang. It was another strong quarter and another quarter that we're able to raise guidance. Let me now discuss the third quarter financials, updated guidance and our longer term model. Excluding e.l.f. stores, net sales of $81 million were up 8% from a year ago. Our in-line performance remained strong throughout December despite the smaller holiday program, which impacted track channel data. You may have already seen a bounce back in yesterday's Nielsen read, which was partially aided by Unicorn merchandising, particularly at Target. Gross margin of 65% was up 500 basis points compared to prior year, primarily driven by the price increases we implemented in the second quarter, along with other factors we've discussed, including margin-accretive innovation, cost savings and favorable FX rates. Year-to-date, FX has contributed a onetime benefit of roughly 200 basis points to our gross margin.

感謝您報導 Tarang 第三季度的亮點。這是又一個強勁的季度，也是我們能夠提高指導的另一個季度。現在讓我討論第三季度的財務狀況、更新的指導和我們的長期模型。不包括 e.l.f.商店淨銷售額為 8100 萬美元，比去年同期增長 8%。儘管假期計劃規模較小，影響了軌道頻道數據，但我們整個 12 月的在線表現仍然強勁。您可能已經在昨天的尼爾森報告中看到了反彈，這在一定程度上得益於獨角獸的銷售，尤其是塔吉特的銷售。65% 的毛利率比去年同期增長了 500 個基點，這主要是由於我們在第二季度實施的價格上漲以及我們討論過的其他因素推動的，包括利潤增長創新、成本節約和有利的匯率。今年迄今為止，外匯業務為我們的毛利率貢獻了約 200 個基點的一次性收益。

I should also note, on tariffs, that although the Phase I deal was signed, 70% of our product remains tariffed at the 25% level. A very small portion, mainly lashes, also remains under the 7.5% tariff.

我還應該指出，在關稅方面，雖然簽署了第一階段協議，但我們70%的產品仍按25%的水平徵收關稅。一小部分（主要是睫毛）也仍處於 7.5% 的關稅之下。

On an adjusted basis, SG&A as a percentage of sales was 44%, up from 37% last year, primarily driven by increased investment in our marketing and digital initiatives and bonus accrual, partially offset by the closure of our 22 e.l.f. stores.

調整後，SG&A 佔銷售額的百分比為 44%，高於去年的 37%，這主要是由於我們對營銷和數字計劃以及應計獎金的投資增加，但部分被我們 22 e.l.f. 的關閉所抵消。商店。

In the third quarter, marketing and e-commerce spend was 11.5% of net sales compared to 7% in the year-ago quarter. During the third quarter, some marketing e-commerce spend shifted to Q4. Therefore, we expect marketing spend as a percentage of net revenue to be higher next quarter.

第三季度，營銷和電子商務支出占淨銷售額的 11.5%，而去年同期為 7%。第三季度，一些營銷電子商務支出轉移到了第四季度。因此，我們預計下季度營銷支出占淨收入的百分比將會更高。

Given top line results, we still expect to see marketing and e-commerce spend at 12% to 14% for fiscal 2020. Q3 adjusted EBITDA of $21 million was driven by the sustained performance in gross margin rate for the quarter. Gross margin and the shift in marketing spend to Q4 drove our adjusted EBITDA margin to 27% for the quarter. We expect adjusted EBITDA margin will normalize as those marketing expenses are incurred in Q4 and as we continue to see the impact of tariffs materialize.

鑑於營收結果，我們仍預計 2020 財年營銷和電子商務支出將增長 12% 至 14%。第三季度調整後 EBITDA 為 2100 萬美元，主要得益於該季度毛利率的持續表現。毛利率和營銷支出向第四季度的轉變推動我們本季度調整後的 EBITDA 利潤率達到 27%。我們預計調整後的 EBITDA 利潤率將正常化，因為這些營銷費用是在第四季度產生的，而且我們繼續看到關稅的影響成為現實。

Adjusted net income was $12.2 million or $0.24 per diluted share compared to $14.6 million or $0.30 per diluted share a year ago.

調整後淨利潤為 1,220 萬美元，即稀釋後每股收益 0.24 美元，而一年前為 1,460 萬美元，即稀釋後每股收益 0.30 美元。

Last year, we had a $0.05 benefit to EPS driven by discrete tax benefits related to stock compensation that we did not have this year.

去年，由於與股票薪酬相關的離散稅收優惠，我們的每股收益獲得了 0.05 美元的收益，而今年我們沒有。

For the 9 months ending December 2019, we generated $37.8 million in cash flow from operations, enabling us to fund our capital investments and debt service, bringing our cash balance to $74.7 million compared to a cash balance of $51.2 million a year ago. The improvement was primarily driven by stronger operating results.

截至2019 年12 月的9 個月中，我們的運營現金流量為3,780 萬美元，使我們能夠為資本投資和償債提供資金，使我們的現金餘額達到7,470 萬美元，而一年前的現金餘額為5,120 萬美元。這一改善主要是由更強勁的經營業績推動的。

In the third quarter, we repurchased approximately $1 million of stock, bringing our total through December 31 to $3.5 million. Our investment priorities remain focused on our 5 strategic imperatives. As Tarang discussed, we continue to explore strategic extensions that could enable us to leverage the investments we've made in our platform and fuel long-term growth.

第三季度，我們回購了約 100 萬美元的股票，使截至 12 月 31 日的股票總額達到 350 萬美元。我們的投資重點仍然集中在我們的 5 項戰略要務上。正如 Tarang 所討論的，我們將繼續探索戰略擴展，使我們能夠利用我們在平台上所做的投資並推動長期增長。

Now turning to our fiscal 2020 guidance. We expect to end the fiscal year with net sales up 7% to 8% versus fiscal 2019, excluding the impact of e.l.f. stores. We expect adjusted EBITDA between $58 million and $60 million, adjusted net income between $28 million and $30 million and adjusted EPS of $0.55 to $0.59 per share on a fully diluted basis, with a share count of 52.5 million. Our tax rate is expected to be 28% for the year.

現在轉向我們的 2020 財年指導。我們預計本財年結束時淨銷售額將比 2019 財年增長 7% 至 8%，排除 e.l.f. 的影響。商店。我們預計調整後的 EBITDA 為 5800 萬至 6000 萬美元，調整後的淨利潤為 2800 萬至 3000 萬美元，調整後的每股完全稀釋每股收益為 0.55 至 0.59 美元，股數為 5250 萬股。我們今年的稅率預計為28%。

As we look to the fourth quarter, we are optimistic about our position in the market and the progress we're making against our strategic imperatives. However, we want to remind you that comps become a bit tougher as we start to cycle positive sales growth related to the Poreless Putty Primer and 16-hour Camo Concealer launches in Q4 last year. These launches drove strong organic influencer activity and a halo effect on sales across our product line.

展望第四季度，我們對我們在市場中的地位以及我們在戰略要求方面所取得的進展感到樂觀。然而，我們想提醒您，隨著我們去年第四季度推出的無孔膩子底漆和 16 小時迷彩遮瑕膏相關的銷售開始循環積極增長，競爭變得更加困難。這些產品的推出推動了強大的影響力活動，並對我們整個產品線的銷售產生了光環效應。

Additionally, we expect gross margin to moderate as we continue to see the impact of tariffs materialize. From an adjusted EBITDA margin perspective, we are expecting 21% to 22% margins for the year, up from the 19% to 20% range provided last quarter as we've continued to see stronger-than-expected gross margins.

此外，隨著我​​們繼續看到關稅的影響成為現實，我們預計毛利率將放緩。從調整後的 EBITDA 利潤率角度來看，我們預計今年的利潤率為 21% 至 22%，高於上季度提供的 19% 至 20% 範圍，因為我們繼續看到毛利率強於預期。

As I stated earlier, Q3 adjusted EBITDA margin of 27% was driven higher by the shift in marketing into Q4. Therefore, you should expect a lower adjusted EBITDA margin in Q4 as these expenses materialize, putting the full year in the 21% to 22% range.

正如我之前所說，由於營銷轉移到第四季度，第三季度調整後 EBITDA 利潤率為 27%。因此，隨著這些費用的具體化，您預計第四季度的調整後 EBITDA 利潤率將會降低，從而使全年利潤率在 21% 至 22% 的範圍內。

Before I turn the call over for questions, let me discuss a high-level view on our long-range model. As Tarang said, over the next 3 years, we expect to continue delivering sales and profit growth, driven by our 5 strategic imperatives. Assuming we don't add significant shelf space or strategic extensions, our sales growth CAGR is expected to be in the low to mid-single digits.

在我轉交電話詢問問題之前，讓我先討論一下對我們的長期模型的高層看法。正如 Tarang 所說，未來 3 年，我們預計在 5 項戰略要務的推動下，將繼續實現銷售額和利潤增長。假設我們不增加大量的貨架空間或戰略擴展，我們的銷售複合年增長率預計將在中低個位數。

If we're successful in gaining significant shelf base or integrating strategic extensions over time, we anticipate those could add additional points of growth to the algorithm. In both cases, we anticipate adjusted EBITDA leverage will be achieved through a mix of top line growth and annual cost savings in COGS and/or SG&A. Accordingly, if we execute across all vectors, our model could reflect a mid- to high single-digit sales CAGR. We will provide more detail each year when we give annual guidance but wanted to give you a perspective on our longer term performance.

如果我們成功地獲得了重要的貨架基礎或隨著時間的推移整合戰略擴展，我們預計這些可以為算法增加額外的增長點。在這兩種情況下，我們預計調整後的 EBITDA 槓桿將通過營收增長和 COGS 和/或 SG&A 的年度成本節省來實現。因此，如果我們在所有向量上執行，我們的模型可能會反映出中高個位數的銷售複合年增長率。每年我們在提供年度指導時都會提供更多詳細信息，但希望讓您對我們的長期業績有一個看法。

We believe we are well positioned to drive sustained growth and look forward to updating you on our overall progress in the coming months. With that, operator, you may open the call to questions.

我們相信，我們有能力推動持續增長，並期待在未來幾個月向您通報我們的總體進展情況。這樣，接線員，您就可以開始提問。

(Operator Instructions)

（操作員說明）

Our first question is from Rupesh Parikh, Oppenheimer & Company.

我們的第一個問題來自 Oppenheimer & Company 的 Rupesh Parikh。

So I guess, to start out, just -- it sounds like on the call, there's been more commentary towards these strategic extension. So as you look at capital allocation, just want to get a sense of how you're thinking about M&A versus share buybacks. And as you look at M&A, is there a preference at all between, I guess, on the makeup side versus skin care. So just any thoughts there?

所以我想，首先，聽起來像是在電話會議上，對這些戰略擴展有更多評論。因此，當您考慮資本配置時，只是想了解一下您如何看待併購與股票回購。當你審視併購時，我想，在化妝品方面與護膚方面是否存在偏好。那麼有什麼想法嗎？

Rupesh, it's Mandy. I'll go ahead and take that question. So as we look at strategic extensions, we really look at a couple of things. So we are looking for either small tuck-in brands, or we've talked about even potentially creating brands on our own. But really, we're looking for a strong growth profile on the top and bottom line. Also looking for something that builds on our capabilities, either in an adjacent category or at a different price point, and also something that can leverage the capabilities that we've built over the past 16 years. So operationally and through our distribution network, would also be something that we look at. But overall, we're looking for something that's accretive or has a clear path to accretion over time. I think we've been highly disciplined as we've looked at these over time. I know Tarang had mentioned that at one point in time, we looked at NYX, but we weren't going to outbid L'Oreal for that asset. And so our heads are really around those smaller tuck-ins at this point.

魯佩什，我是曼迪。我將繼續回答這個問題。因此，當我們考慮戰略擴展時，我們確實會考慮一些事情。因此，我們正在尋找小型品牌，或者我們已經討論過甚至有可能自己創建品牌。但實際上，我們正在尋求營收和利潤的強勁增長。我們還要尋找能夠以我們的能力為基礎的產品，無論是在相鄰類別還是在不同的價位，以及能夠利用我們在過去 16 年中建立的功能的產品。因此，在運營方面以及通過我們的分銷網絡，這也是我們所關注的。但總的來說，我們正在尋找隨著時間的推移具有增值性或具有明確增值路徑的東西。我認為，隨著時間的推移，我們一直在審視這些問題。我知道 Tarang 曾提到過，我們曾經考慮過 NYX，但我們不會以高於歐萊雅的價格收購該資產。因此，此時我們的注意力確實集中在那些較小的折邊上。

Okay, great. And then maybe just 1 follow-up question. Just on the gross margin line. Obviously, a strong performance in Q3, and it sounds like the tariffs will start to have more of an impact on -- in Q4. So if you look at your gross margin performance for FY '19, is at 63% level, I guess, the right way to think about, like, I guess, a sustainable gross margin level going forward for the full year?

好的，太好了。然後也許只有 1 個後續問題。就在毛利率線上。顯然，第三季度的表現強勁，聽起來關稅將開始對第四季度產生更大的影響。因此，如果你看看 19 財年的毛利率表現，我想是 63% 的水平，我想，正確的方式是思考全年的可持續毛利率水平？

Well, I'll speak -- Yes. I'll speak on fiscal '20 and what we expect for that. So as Tarang mentioned, we've grown our margin, tried over 63% year-to-date, it's at 64%. So I would expect the year to end somewhere in that range in the 63% to 64% range. We did see the acceleration of tariffs into Q3, about 100 basis points. But with those levers that we discussed, we're able to continue to offset.

好吧，我會說——是的。我將談論 20 財年以及我們對此的期望。正如 Tarang 提到的，我們已經提高了利潤率，今年迄今為止嘗試超過 63%，現在是 64%。因此，我預計今年結束時的比例將在 63% 至 64% 之間。我們確實看到第三季度關稅加速上漲，約 100 個基點。但通過我們討論的這些槓桿，我們能夠繼續抵消。

And FX was a 200 basis point onetime impact. So Rupesh, as you think of 65% to 63%, it's probably the right number in terms of what we should have done.

外匯匯率一次性受到 200 個基點的影響。所以，Rupesh，正如你所認為的 65% 到 63% 一樣，就我們應該做的事情而言，這可能是正確的數字。

Our next question is from Andrea Teixeira, JPMorgan.

我們的下一個問題來自摩根大通的 Andrea Teixeira。

So I understand your suppliers are loyal, and I guess, Tarang, you disclosed that -- I mean, the distance from -- to Wuhan. And -- but I wanted to understand if you believe these factories are still closed or if they're still operating? And I'm more concerned about the supply chain. If the raw materials are causing any disruption? And if you're embedding the risk of stock outs, probably not in the fourth quarter. So your fiscal '20 is likely safe but into fiscal '21. An update as on how long this products would come in. And again, just to clarify that point. And on the SG&A side, and I know it's something just to -- the second point is the percentage is still quite elevated as a percentage of sales. So I wonder when we should think of that leveraging more as you grow the top line.

所以我知道你們的供應商是忠誠的，我想，塔朗，你透露了——我的意思是，到——武漢的距離。而且 - 但我想知道您是否認為這些工廠仍然關閉或仍在運營？我更關心供應鏈。原材料是否造成任何干擾？如果你要考慮缺貨的風險，那麼可能不會出現在第四季度。因此，您的 20 財年可能是安全的，但進入了 21 財年。有關該產品將上市多久的更新。再次，只是為了澄清這一點。在SG&A方面，我知道這只是——第二點是這個百分比佔銷售額的百分比仍然相當高。所以我想知道當你增加收入時我們什麼時候應該考慮更多地利用槓桿。

Andrea, I'll take the first one and give Mandy the second question. So in terms of China, for FY '21, I'll tell you, it's too early to tell. Our thoughts are obviously with our colleagues and our suppliers, who we are working very closely with -- I think the best thing is we're extremely vigilant on our health and hygiene protocols. I'm very proud of that. None of our employees or their immediate families have been affected. As we've checked with all of our suppliers, they've reported none of their employees have had any issues either. Part of that is the distance from Wuhan. But I think part of it is also the protocols we've put in place.

安德里亞，我回答第一個問題，然後問曼迪第二個問題。因此，就中國而言，對於 21 財年，我告訴你，現在下結論還為時過早。我們的想法顯然是與我們的同事和供應商在一起，我們正在與他們密切合作——我認為最好的事情是我們對我們的健康和衛生協議保持高度警惕。我對此感到非常自豪。我們的員工或其直系親屬均未受到影響。我們與所有供應商進行了核實，他們報告說他們的員工也沒有遇到任何問題。部分原因是距武漢的距離。但我認為部分原因也是我們制定的協議。

In terms of our overall approach with our supply chain in China. It is one of the main advantages we have. I would say, from a supply disruption or continuity standpoint, first of all, every one of our items is dual sourced; we're not single source on anything. So if there was an issue, we have the ability to move volume around. See, the second thing is going into Chinese New Year every year, we go in with elevated inventory levels, really, because some of these facilities will be shut for month. We have our resets that happen here in the spring time. So yes, we're sitting about 6 months worth of inventory right now. And that does not include what our customers are sitting on. So right now, certainly, for the short term, I think we're feeling pretty good. But obviously, this is evolving situation, and we'll continue to monitor it. We have a very good track record in terms of our ability to be able to supply our customers and work very closely with them.

就我們在​​中國供應鏈的整體方法而言。這是我們擁有的主要優勢之一。我想說，從供應中斷或連續性的角度來看，首先，我們的每一件商品都是雙重來源的；我們在任何事情上都不是單一來源。因此，如果出現問題，我們有能力調整交易量。看，第二件事是每年進入農曆新年，我們的庫存水平確實很高，因為其中一些設施將關閉一個月。我們在春天進行了重置。所以，是的，我們現在擁有大約 6 個月的庫存。這還不包括我們的客戶所坐的東西。所以現在，當然，從短期來看，我認為我們感覺很好。但顯然，情況正在不斷變化，我們將繼續監控。我們在為客戶提供服務並與他們密切合作的能力方面擁有非常良好的記錄。

And then, Andrea, on the SG&A point. So SG&A this quarter was really driven by 2 things that we called out. The incremental marketing expense. So this quarter, we're at 11.5% versus last year at this time, we were at 7%. And then also, bonus accrual included in this quarter versus not having that. As you recall, last year, we did not pay any executive bonuses and so now lapping that with that bonus accrual. In our longer term algorithm, we do have some combination of SG&A and/or COG savings baked into that. And so over time, over the next 3 years, as we talked, you should expect some savings there.

然後，Andrea，談談 SG&A 問題。因此，本季度的銷售、管理及行政費用實際上是由我們指出的兩件事推動的。增量營銷費用。因此，本季度我們的增長率為 11.5%，而去年同期為 7%。此外，本季度應計獎金與不應計獎金的比較。正如您所記得的，去年我們沒有支付任何高管獎金，因此現在將其與應計獎金一起支付。在我們的長期算法中，我們確實將 SG&A 和/或 COG 節省納入其中。因此，隨著時間的推移，在接下來的 3 年裡，正如我們所說，您應該期望能節省一些費用。

Right. And if I -- and thank you so much, one of the things that you also discussed is like bear in mind of the phasing of the Poreless Putty Primer and the Camo Concealer. Is that a consideration, obviously, now in the fourth quarter? And then I know you've been relaunching it also like variations of it. I was just wondering, it's just a massive comp because it has done so well. And if you can kind of like tell us like what would be the impact embedded in your guide of that -- of lapping that?

正確的。如果我——非常感謝你，你也討論過的一件事就是要記住無孔膩子底漆和迷彩遮瑕膏的分階段。顯然，現在第四季度這是一個考慮因素嗎？然後我知道你也一直在重新啟動它，就像它的變體一樣。我只是想知道，這只是一個巨大的競爭，因為它做得很好。如果你能告訴我們你的指南中包含的--研磨它會產生什麼影響？

Yes. So the guidance right now is the 7% to 8% really reflects kind of what we've seen as a trend on a 2-year stack basis. So if you look at the low and the high end of the guidance range, puts you about a 5% on a 2-year stack for Q4 on the low end and about 8% on the higher end. So really in line with the trends that we're seeing. Just calling out that Poreless Putty Primer, we do have to cycle that, but we're encouraged by the trends that we're seeing so far.

是的。所以現在的指導是 7% 到 8% 確實反映了我們所看到的 2 年堆棧趨勢。因此，如果你查看指導範圍的低端和高端，你會發現第四季度 2 年期堆棧的低端約為 5%，高端約為 8%。這確實符合我們所看到的趨勢。只是提到無孔膩子底漆，我們確實必須循環使用它，但我們對迄今為止所看到的趨勢感到鼓舞。

And our new product program is off to a really good start. As I mentioned, I think, 5 of our top 10 items right now on elfcosmetics.com are items we just introduced in the last month or 2. So while we have a big comp to overcome with Poreless Putty Primer and Camo Concealer. Our holy grail products like our new Hydration Camo Concealer, our Liquid Glitter Eyeshadows, a number of other new products. We're encouraged by the fast start on those.

我們的新產品計劃有了一個良好的開端。正如我所提到的，我認為目前elfcosmetics.com 上排名前10 的產品中有5 個是我們在上個月或上兩個月剛剛推出的產品。因此，儘管我們需要克服無孔膩子底漆和迷彩遮瑕膏的巨大競爭。我們的聖杯產品，如新款水合迷彩遮瑕膏、液體閃光眼影以及許多其他新產品。我們對這些方面的快速啟動感到鼓舞。

Our next question is from Erinn Murphy, Piper Sandler.

我們的下一個問題來自艾琳·墨菲 (Erinn Murphy)、派珀·桑德勒 (Piper Sandler)。

I guess I have a couple of questions. Maybe Tarang, first for you, a little bit bigger-picture question. As we think about just the beauty industry right now. I mean, it's obviously -- particularly mass has been tough for several years now. I mean, as you go forward into 2020, 2021, how do you feel like Target, Walmart, some of your big accounts are just thinking about allocating space for that category. And it's clear that you guys are gaining share. But just overall, I'm just curious on what's being allocated to Beauty and how that may shift versus prior seasons or prior years?

我想我有幾個問題。也許塔朗，首先對你來說，是一個更宏觀的問題。當我們現在只考慮美容行業時。我的意思是，很明顯，幾年來，尤其是質量問題一直很困難。我的意思是，當你進入 2020 年、2021 年時，你感覺塔吉特 (Target)、沃爾瑪 (Walmart) 怎麼樣，你們的一些大客戶只是在考慮為該類別分配空間。很明顯，你們正在獲得份額。但總的來說，我只是好奇分配給美容的內容以及與前幾季或前幾年相比會發生什麼變化？

What I'll tell you is Beauty is still an incredibly attractive sector for any of our retailers. If I look, obviously, Ulta Beauty, that's been the case, but same with Target and Walmart. They've allocated more space for Beauty overall. Within Beauty, you can have shifts between some of the subcategories. So we've talked over the last few years, mass color cosmetics, having poorer trends than skin care, for example, the overall footprint, at least for all the customers we deal with, where Beauty is a major strategic priority. We don't foresee kind of shrinking of that footprint. In terms of allocation decisions within that footprint, it comes to growth rate, productivity, what's the level of innovation you have and what your consumer profile is. And all 4 of those, we score extremely well. So long term, I'm highly confident of our ability to continue to pick up more space. The reason why we provided a long-term model in 2 different dimensions is base is episodic. And so we wanted to be able to give a perspective of without major space gain or strategic extensions, what level of growth do we see? And then when you layer that on, what that looks like? So I'm both encouraged long-term in terms of our ability to get space. And then short term, I'd say, often for a retailer, they have a number of other decisions besides the fundamental performance of a brand. I think one headwind, there is a number of them are-have been focused on exclusive brands and testing new brands as they go through. A lot of those will kind of come and go. I think we're well positioned regardless of that or legacy players.

我要告訴您的是，對於我們的零售商來說，美容仍然是一個極具吸引力的領域。如果我看一下，顯然，Ulta Beauty 就是這種情況，但塔吉特和沃爾瑪也是如此。他們為美麗整體分配了更多空間。在美容中，您可以在某些子類別之間進行切換。因此，我們在過去幾年中談到，大眾彩妝的趨勢比護膚品差，例如，整體足跡，至少對於我們處理的所有客戶而言，其中美容是主要戰略重點。我們預計該足跡不會縮小。就該足跡內的分配決策而言，涉及增長率、生產率、創新水平以及消費者概況。在所有這 4 項中，我們得分都非常好。從長遠來看，我對我們繼續獲得更多空間的能力充滿信心。我們提供兩個不同維度的長期模型的原因是基礎是情景性的。因此，我們希望能夠給出一個觀點：在沒有重大空間增益或戰略擴展的情況下，我們看到的增長水平是什麼？然後當你把它分層時，它看起來是什麼樣子？因此，就我們獲得空間的能力而言，我倆都長期受到鼓舞。然後，我想說，從短期來看，對於零售商來說，除了品牌的基本表現之外，他們通常還有許多其他決策。我認為其中有很多逆風——一直專注於獨家品牌並在新品牌推出時對其進行測試。其中很多都會來來去去。我認為無論是傳統玩家還是傳統玩家，我們都處於有利位置。

Okay, that's helpful. And then just maybe just a follow-up, Tarang, on that growth side. Into next year, kind of the long-term range plan at the lower end of that low to mid-single. Do you assume the category stays relatively similar to where we're at today? Or is there any gains improvement in the category?

好的，這很有幫助。然後也許只是一個後續行動，塔朗，在增長方面。到明年，這是一種長期範圍計劃，位於低端到中端單曲的低端。您認為該類別與我們今天的情況相對相似嗎？或者品類有沒有收益提升？

We made the long-term model inclusive of the current category trends. We assumed a down category in there, and that's why we believe it's pretty good growth without space, without strategic extensions in a down category to be able to deliver that level of growth.

我們製作的長期模型包含了當前的品類趨勢。我們假設其中有一個羽絨類別，這就是為什麼我們相信，如果沒有空間，沒有羽絨類別的戰略擴展就能夠實現這種增長水平，那麼它的增長就相當不錯。

Okay. That's helpful. And then just my second question is really for Mandy. As we think about marketing, I think you guys have it at like 12% to 14% of sales this year and you go into next year. I mean, is that the general right level to think about, or was this kind of a shot in the arm to kind of rejigger the brand momentum and that starts to come down? Just curious on how you're thinking about that within the framework of the 3-year plan?

好的。這很有幫助。我的第二個問題是針對曼迪的。當我們考慮營銷時，我認為你們今年的營銷比例約為 12% 至 14%，然後進入明年。我的意思是，這是一個值得考慮的總體正確水平，還是這是一種強心劑，可以重新調整品牌勢頭，然後開始下降？只是好奇您在三年計劃的框架內如何考慮這個問題？

Yes. So as we think about the 12% to 14%, I think we've said that's the area that we feel comfortable with. Right now, we haven't really given guidance beyond that. But to say that 12 to 14% is where we see it, at least for fiscal '20.

是的。因此，當我們考慮 12% 到 14% 時，我認為我們已經說過這是我們感到滿意的區域。目前，我們還沒有真正提供除此之外的指導。但我們認為 12% 至 14% 是這樣的，至少在 20 財年是這樣。

Our next question is from Linda Bolton-Weiser, D.A. Davidson.

我們的下一個問題來自檢察官 Linda Bolton-Weiser。戴維森。

Could you elaborate a little bit more on your decision to use fewer international distributors and what your plan would be then for other international markets. Do you plan to go in direct markets? Or -- and can you just talk about the regions or countries that you are thinking about penetrating further?

您能否詳細說明一下您減少使用國際分銷商的決定以及您對其他國際市場的計劃。您打算進入直接市場嗎？或者——您能談談您正在考慮進一步滲透的地區或國家嗎？

Linda. So our strategy, which began probably more than a year ago, was to really go direct with our key international accounts where we could, similar to our strategy in the U.S., where we have direct headquarter coverage at Target, Walmart, Ulta Beauty and our drug channel and other key customers. As any other company, we go through a flow where you start with a lot of international distributors. You figure out which ones you want to be able to keep. But as we made that shift, for example, in the U.K. a few years ago, we just saw much better results of being able to go directly to Superdrug and directly to Boots. In terms of other international markets, we're testing the brand and we have been for a while in Germany and other countries within Western Europe. Our big focus within Asia is really from an e-commerce standpoint with China making the move of actually taking over that business directly from a distributor was an important move for us. And you'll continue to see us kind of sequentially go country after country, never will be a big bang, but more how we go and really make sure we're executing each country the right way.

琳達。因此，我們的戰略可能開始於一年多前，實際上是盡可能直接與我們的主要國際客戶合作，類似於我們在美國的戰略，我們的總部直接覆蓋塔吉特、沃爾瑪、Ulta Beauty 和我們的公司。藥品渠道等重點客戶。與任何其他公司一樣，我們經歷的流程是從許多國際分銷商開始。你弄清楚你想要保留哪些。但當我們做出這種轉變時，例如幾年前在英國，我們看到了能夠直接進入 Superdrug 和直接進入 Boots 的更好結果。在其他國際市場方面，我們正在測試該品牌，並且我們已經在德國和西歐其他國家進行了一段時間的測試。我們在亞洲的重點實際上是從電子商務的角度來看，中國直接從分銷商手中接管該業務對我們來說是一個重要舉措。你會繼續看到我們按順序去一個又一個國家，永遠不會有什麼大爆炸，但更多的是我們如何去，並真正確保我們以正確的方式執行每個國家。

And then can I just follow-up on the coronavirus issue? Is it your understanding that plants will reopen after the extended holiday period, or do you have any further information on that? And then I think you said your facilities are 500 miles away. Would that be in the Guangdong region? Or there's like another manufacturing region, slightly more north? Can you just give us a little more specificity on where your facilities are or maybe they're in different locations?

那麼我可以跟進冠狀病毒問題嗎？您是否理解延長假期後工廠將重新開放，或者您是否有任何進一步的信息？然後我想你說你的設施在 500 英里之外。是在廣東地區嗎？或者還有另一個製造區域，稍微靠北一點？您能否更具體地告訴我們您的設施在哪裡，或者它們可能位於不同的位置？

Sure, Linda. So our supply network is both deep and very broadly distributed. So we're in different parts of the country, particularly around the Shanghai area, but we have suppliers in various other regions. I'll tell you in terms of production plans, we are scheduled next week to have -- be in production and have shipments. We had shipments ready to go that we did right before Chinese New Year, and we were staying very close, it's a quick dynamic. We -- and very evolving kind of situation. So very proud of our team and just how well everyone is working together, including support from the U.S. So I hope that answers the question. We haven't disclosed where all of our facilities are other than not near Wuhan, and we have talked in the past being closer to Shanghai and in other regions.

當然，琳達。因此，我們的供應網絡既深入又分佈廣泛。因此，我們分佈在全國不同地區，特別是上海地區，但我們在其他各個地區都有供應商。我會告訴你生產計劃，我們計劃下週開始生產並發貨。我們在農曆新年之前就已經準備好了發貨，而且我們保持著非常接近的狀態，這是一個快速的動態。我們——以及不斷變化的情況。對我們的團隊以及每個人的合作程度感到非常自豪，包括來自美國的支持，所以我希望這能回答這個問題。我們沒有透露我們的所有設施都位於武漢附近，但我們過去曾談到過靠近上海和其他地區。

Our next question is from Steph Wissink, Jefferies.

我們的下一個問題來自 Jefferies 的 Steph Wissink。

Tarang, the first question is for you. Just to remind us where are you with your shelf space at your 3 biggest accounts Target, Walmart, Ulta. Can you give us just a quick diagnostic update on how much space at each retailer you are -- you have currently?

Tarang，第一個問題是問你的。只是提醒我們，您的 3 個最大客戶 Target、Walmart、Ulta 的貨架空間在哪裡。您能給我們提供一個快速的診斷更新信息，說明您目前在每個零售商有多少空間嗎？

Sure. So our most developed customer is Target, where we've been in business the longest. On average, I think we have about an 11-foot footprint at Target. Then after that would probably be Walmart. In terms of Walmart's footprint is on average, I think, about 5 feet. And Ulta right now would be in some combination of 6-foot sets and 4-foot sets, on average, about 5 feet as well. So in most retailers, we find that we have less than kind of half the footprint that we have at Target. Gives us that confidence longer-term in terms of the footprint of the brand. I should also mention, in the drug channel, we're predominantly, I think, in around a 3-foot set. So we still have room to grow pretty much in every channel that we're at, including at Target. I talked about kind of the benefit of Unicorn and our new merchandising vehicles with these flex towers have been terrific for us in terms of really highlighting our new products and our key holy grail innovations, and those flex towers form a additional space there as well. So still quite a bit of room to grow.

當然。因此，我們最發達的客戶是 Target，我們在該客戶開展業務的時間最長。平均而言，我認為 Target 的佔地面積約為 11 英尺。之後可能是沃爾瑪。我認為沃爾瑪的平均佔地面積約為 5 英尺。Ulta 現在將採用 6 英尺組和 4 英尺組的某種組合，平均約為 5 英尺。因此，在大多數零售商中，我們發現我們的足跡還不到塔吉特百貨的一半。就品牌足跡而言，給了我們長期的信心。我還應該提到，在毒品頻道中，我認為我們主要是在 3 英尺左右的範圍內。因此，我們在每個渠道（包括塔吉特）仍然有很大的增長空間。我談到了獨角獸的一些好處，以及我們帶有這些柔性塔的新銷售工具對我們來說非常棒，真正突出了我們的新產品和我們的關鍵聖杯創新，這些柔性塔也在那裡形成了額外的空間。所以仍有相當大的增長空間。

Okay, that's great. And then my question for you on skin care. I know you talked about strategic extensions. But what about strategic adjacencies skin, body, sun care? Just remind us how big the skincare business is today as a percentage of sales? And do you see that still as a growth opportunity?

好的，太好了。然後我問你關於皮膚護理的問題。我知道你談到了戰略擴展。但戰略相關的皮膚、身體、防曬護理又如何呢？請提醒我們今天的護膚品業務佔銷售額的比例有多大？您認為這仍然是一個增長機會嗎？

Skincare. Yes. So Steph, this is Mandy. Skincare, we still see as a big opportunity for us. As we mentioned, skin care was up for us 35% in the quarter. And when we think about strategic extensions, definitely think about adjacencies. As I mentioned, and skin care would be one of those that we would definitely consider.

皮膚護理。是的。斯蒂芬，這是曼迪。護膚品，我們仍然認為這是一個巨大的機會。正如我們提到的，本季度護膚品增長了 35%。當我們考慮戰略擴展時，一定要考慮鄰接關係。正如我所提到的，皮膚護理將是我們肯定會考慮的問題之一。

And part of this, we've been in color cosmetics for almost 16 years. Skin care is still only 2 to 3 years in, given the momentum we see, given kind of the strength of the pipeline, we see a lot of growth there, although it is still quite small in our overall range.

其中，我們在彩妝領域已經有近 16 年的歷史。考慮到我們看到的勢頭，考慮到產品線的實力，皮膚護理領域仍然只有 2 到 3 年的時間，儘管在我們的整體範圍內仍然很小，但我們看到了很大的增長。

Our next question is from Oliver Chen, Cowen and Company.

我們的下一個問題來自 Oliver Chen, Cowen and Company。

Regarding Project Unicorn, that was a big focus. You've had a lot of great success. So what inning are you in with Unicorn? And how does that interplay with the opportunity -- floor space opportunities. Related to that is pricing and elasticity? And what are your thoughts on what you've been seeing in the marketplace with the unit response relative to price increases, it sounds all very encouraging.

關於獨角獸計劃，這是一個重點。你已經取得了很多巨大的成功。那麼你和獨角獸在第幾局呢？這與機會（佔地面積機會）如何相互作用。與此相關的是定價和彈性？您對市場上所看到的相對於價格上漲的單位反應有何看法，這聽起來非常令人鼓舞。

Thanks, Oliver. I'll take the first question on Unicorn. And I'll ask Mandy to take the one on pricing. Unicorn has been a great success for us in terms of really elevating our position in each of our national retailers on shelf and with merchandising. We're currently entering the third phase of Unicorn, which is really focused on better visual merchandising, particularly bringing consumers to our key holy grail innovations, being able to navigate the shelves better for that. Shelves are currently being set, we'll have a better read of those really over the next 4 to 6 weeks. It's one of the reasons why last year, we changed our fiscal year to be able to get that read. And then in terms of where Unicorn goes from here, I mean, I think you're going to continue to hear us talk about Unicorn in different phases. We believe there's much more we can do from a visual merchandising standpoint. And as that visual merchandising as well as the other improvements we've made help us increase productivity, we believe that makes for a very good case for space.

謝謝，奧利弗。我將回答關於獨角獸的第一個問題。我會請曼迪負責定價問題。獨角獸對我們來說取得了巨大的成功，它真正提升了我們在每個全國零售商的貨架和銷售中的地位。我們目前正在進入獨角獸的第三階段，該階段真正專注於更好的視覺營銷，特別是讓消​​費者了解我們的關鍵聖杯創新，從而能夠更好地瀏覽貨架。目前正在設置書架，我們將在接下來的 4 到 6 週內更好地了解這些內容。這就是為什麼去年我們改變了財政年度以便能夠得到這樣的信息的原因之一。然後就獨角獸的未來發展而言，我的意思是，我認為您將繼續聽到我們在不同階段談論獨角獸。我們相信，從視覺營銷的角度來看，我們可以做更多的事情。由於視覺營銷以及我們所做的其他改進有助於提高生產力，我們相信這為空間提供了一個非常好的案例。

Yes. And Oliver, on the pricing side, we continue to be pleased with what we see there. I think last quarter, we talked about having a 200 basis point impact from pricing, and we feel that's continuing to hold. So what we saw in Q2 continues to hold true and continues to give us some benefit from having that elevated pricing.

是的。奧利弗，在定價方面，我們仍然對我們所看到的感到滿意。我認為上個季度，我們談到了定價對 200 個基點的影響，我們認為這種影響將繼續存在。因此，我們在第二季度看到的情況仍然成立，並繼續從提高的定價中給我們帶來一些好處。

Go ahead, Oliver.

繼續吧，奧利弗。

So the other question and would love your thoughts on units in that dynamic, but you've done a remarkable job with TikTok, congratulations. How do you see that platform evolving? And as we digest the evolution of these platforms, like how much marketing as a percentage of sales will be allocated to emerging platforms like TikTok versus some of the other expenditures?

那麼另一個問題，我希望了解您對這種動態中的單位的想法，但您在 TikTok 方面做得非常出色，恭喜您。您如何看待該平台的發展？當我們消化這些平台的演變時，比如與其他一些支出相比，將向 TikTok 等新興平台分配多少營銷費用（佔銷售額的百分比）？

Yes. So let me just finish up on the elasticity piece on the unit side. So we do continue to see units down on the items that we priced, but better than what we initially modeled, so that also gives us some comfort.

是的。那麼讓我來完成單元側的彈性部件。因此，我們確實繼續看到我們定價的商品單位有所下降，但比我們最初建模的要好，所以這也給我們帶來了一些安慰。

Yes. And then on TikTok. I mean, it's been an incredible campaign. I'd say it's part of our overall brand recharge. And I think one of the great things about our brand recharge is getting back to our roots in terms of constantly kind of experimenting and really finding ways of engaging with our core consumer. And so TikTok, in particular, really going their strength that TikTok has amongst Gen Z. We're definitely seeing -- I mean, our campaign was 4.4 billion views, over 3 million user-generated videos. We see much more we can do, not only on TikTok but other emerging platforms as well. And in fact, it's not only what we do, but what our community does. In the last couple of weeks, one of the things I'm really encouraged by, is there are 2 viral videos that were posted. We had nothing to do with them. One was for our bite-sized shadows, one of our new items. As soon as that video went on, we saw almost a 5x increase of sales of bite-sized shadows on elfcosmetics.com over the last couple of weeks. Similarly, we saw another viral video go up on our Lip Exfoliators. This is a product we've had for quite some time. One of our core products out there. And again, I think we saw at one major retailer, almost a 6x increase in terms of our Lip Exfoliator sales. So not only are these platforms great ways to engage our consumers, particularly Gen Zs and millennials. But we see the translation of what they can do to us from a business standpoint, and you're going to continue to see us experiment and kind of blaze new grounds.

是的。然後是 TikTok。我的意思是，這是一場令人難以置信的競選活動。我想說這是我們整體品牌充電的一部分。我認為我們品牌再造的偉大之處之一就是通過不斷的嘗試和真正找到與我們的核心消費者互動的方式來回歸我們的根源。因此，特別是 TikTok，真正發揮了 TikTok 在 Z 世代中的優勢。我們肯定會看到——我的意思是，我們的活動獲得了 44 億次觀看，超過 300 萬個用戶生成的視頻。我們看到我們可以做更多的事情，不僅在 TikTok 上，而且在其他新興平台上也是如此。事實上，這不僅是我們所做的事情，也是我們社區所做的事情。在過去的幾周里，令我真正受到鼓舞的事情之一是發布了 2 個病毒視頻。我們和他們沒有任何關係。其中一個是用於我們一口大小的陰影，這是我們的新產品之一。該視頻一播放，我們就發現過去幾週 elfcosmetics.com 上小眼影的銷量幾乎增長了 5 倍。同樣，我們看到另一個關於我們的唇部去角質產品的病毒視頻。這是我們已經使用相當長一段時間的產品。我們的核心產品之一。再說一次，我認為我們在一家主要零售商處看到，我們的唇部去角質產品的銷量幾乎增長了 6 倍。因此，這些平台不僅是吸引消費者（尤其是 Z 世代和千禧一代）的好方法。但我們從商業角度看到了他們可以為我們做些什麼，你將繼續看到我們進行實驗並開闢新的領域。

And lastly, the aspect of creating brands. The e.l.f. brand seems pretty versatile. So what are your inclinations in terms of opportunities as you think about either pricing or line extensions, or why would creating another brand be an opportunity?

最後，創建品牌方面。e.l.f.品牌看起來非常多才多藝。那麼，當您考慮定價或產品線擴展時，您對機會的傾向是什麼，或者為什麼創建另一個品牌是一個機會？

We certainly believe the biggest potential we have is continue to grow e.l.f.. We have tremendous potential in e.l.f. and great belief in that. As you say, not only continue to get more consumers in the franchise, broaden our footprint, continue to bring out amazing new innovations, that's almost 100% of our focus is against e.l.f. Having said that, most of the results come with multi-brand experience, where we've seen the benefit of being able to take the investments we've made in team and our capabilities and leverage that across other brands, whether it be in a higher price point, given the quality of our products that could be applied to a different price point or a different adjacency or space. We can see the benefit potentially of putting a new brand through as part of one of the examples of a strategic extension.

我們當然相信我們最大的潛力是繼續發展 e.l.f.。我們在 e.l.f. 方面擁有巨大的潛力。並對此深信不疑。正如你所說，我們不僅要繼續吸引更多消費者加入該系列，擴大我們的足跡，繼續推出令人驚嘆的新創新，而且我們幾乎 100% 的重點都是針對 e.l.f.。話雖如此，大多數成果都來自多品牌經驗，我們已經看到了能夠利用我們在團隊和能力方面進行的投資並在其他品牌中利用這些投資的好處，無論是在考慮到我們的產品質量可以應用於不同的價格點或不同的鄰接或空間，因此價格點更高。作為戰略延伸示例之一，我們可以看到推出新品牌的潛在好處。

Our next question is from Jon Andersen, William Blair.

我們的下一個問題來自喬恩·安德森、威廉·布萊爾。

Question maybe for Tarang. On space -- shelf space in 2020. I think it was mentioned that there were some wins that you've already booked, I believe in grocery and perhaps, in Boots in the U.K. Number one, did I hear that accurately? And number two, are there some other concrete shelf space opportunities with maybe the big 3 national retail accounts that -- where decisions could be made during 2020 as well?

可能是塔朗的問題。空間上——2020 年的貨架空間。我想有人提到你已經預訂了一些勝利，我相信雜貨店，也許還有英國排名第一的 Boots，我聽得準確嗎？第二，是否還有其他一些具體的貨架空間機會，可能是三大全國零售客戶在 2020 年期間做出的決定？

Sure, Jon. So you heard that right. We did pick up and confirm additional space in grocery as well as Boots, where we're going to be doubling our footprint over the next 12 months. We have opportunities everywhere. There isn't one place we're at where I don't believe we have opportunities. And so I think our biggest opportunity remains more space at Walmart, we're severely under spaced there. They're our largest customer, and we still have a long way to go there. But same with Ulta, we're relatively recent in our experience with Ulta. They've already, this past year, started taking space up from 4-foot to 6-foot sets. And then finally, even Target, I mentioned earlier, and drug as well. So those decisions, we would expect to come later in 2020. And so when we're ready for our 2021 guidance, Fiscal year '21 guidance, I think, we'll be in a better position to talk about what are we seeing and where they'll be.

當然，喬恩。所以你沒聽錯。我們確實在雜貨店和 Boots 中挑選並確認了額外的空間，我們將在未來 12 個月內將我們的足跡擴大一倍。我們到處都有機會。我相信我們在每一處都擁有機會。因此，我認為我們最大的機會仍然是在沃爾瑪提供更多空間，我們在那裡的空間嚴重不足。他們是我們最大的客戶，我們還有很長的路要走。但與 Ulta 一樣，我們在 Ulta 方面的經驗相對較新。去年，他們已經開始將場地空間從 4 英尺增加到 6 英尺。最後，甚至是我之前提到的 Target，還有毒品。因此，我們預計這些決定將在 2020 年晚些時候做出。因此，當我們準備好 2021 年指導、21 財年指導時，我認為我們將能夠更好地談論我們所看到的以及它們將在哪裡。

If those decisions were made -- are made in 2020, what's kind of the way to think about timing for shelf implementation?

如果這些決定是在 2020 年做出的，那麼如何考慮上架實施的時間安排？

Yes. The timing for shelf implementation, really, there's 2 ways to think about it. One is the spring sets, which are done, and we've talked about kind of the level of space we have right now, which is really just grocery and Boots. For additional space. It varies by retailer, but if there was going to be space, it'd be in the fall of this year as we went through. And again, a lot of it depends on each retailer's strategies in terms of when they make their final space decisions.

是的。事實上，貨架實施的時機有兩種思考方式。一個是春季套裝，已經完成，我們已經討論過我們現在擁有的空間水平，實際上只是雜貨店和靴子。為了額外的空間。具體情況因零售商而異，但如果有空間的話，那就是在我們經歷的今年秋天。同樣，這在很大程度上取決於每個零售商在做出最終空間決策時的策略。

Very helpful. I had a question on pricing. Just to circle back around on that for a minute. Is all of the pricing that you plan to implement? Is that now in market on shelf? And the volume response that you've seen, it sounds like better than expected but still a volume response. How long does it typically take in your experience for kind of consumers to absorb that increase and you get back the ability to kind of inflect volumes positively?

很有幫助。我有一個關於定價的問題。只是回過頭來討論一下這個問題。您計劃實施的所有定價都是如此嗎？現在市場上有貨架嗎？您所看到的音量響應聽起來比預期要好，但仍然是音量響應。根據您的經驗，消費者通常需要多長時間才能吸收這種增長，然後您才能恢復積極影響銷量的能力？

Yes. So just to break your question down. Yes, pricing is implemented across all retailers in elfcosmetics.com. And as we spoke about that started in Q2. So fully reflected in track channel data, you can see the response and the elevated AURs in all of that data. In terms of when you expect units to come back around. I mean, I think that you -- as I said, units are better than we modeled, but still negative. But you probably need some time to cycle through that price increase before you see the unit inflection again.

是的。所以只是為了分解你的問題。是的，elfcosmetics.com 上的所有零售商均實施定價。正如我們所說，這從第二季度開始。如此充分地反映在軌道通道數據中，您可以看到所有數據中的響應和升高的 AUR。就您預計單位何時恢復而言。我的意思是，我認為你——正如我所說，單位比我們建模的要好，但仍然是負面的。但在再次看到單位拐點之前，您可能需要一些時間來經歷價格上漲。

Have other mass color cosmetics brands had to make similar price increases? Or are you in a different situation given the nature of your supply chain?

其他大眾彩妝品牌是否也不得不進行類似的漲價？或者考慮到您的供應鏈的性質，您是否處於不同的情況？

Yes. So we lead the value segment. Pretty much every value player followed our lead and took pricing. The way -- the nature of which they took pricing was often different. Many of them peanut buttered kind of a certain approach, a certain percentage across all of their SKUs. We tend to target SKUs where we felt we had a much better value proposition or where we felt a competitor might have to take pricing. And I think that's one of the reasons why we're seeing better execution than what we modeled. But the good news is, a number of our competitors have taken pricing.

是的。因此，我們引領價值細分市場。幾乎所有價值玩家都跟隨我們的腳步並接受了定價。他們定價的方式和性質往往不同。他們中的許多人都以某種特定的方式塗上花生醬，在所有 SKU 中佔據一定的比例。我們傾向於針對那些我們認為我們有更好的價值主張或我們認為競爭對手可能必須採取定價的 SKU。我認為這就是為什麼我們看到比我們建模的執行效果更好的原因之一。但好消息是，我們的一些競爭對手已經採取了定價。

Great. Just one quick one. On the liquid fill facility in California. It sounds like you're close to starting production there. How much capacity, and how quickly will you be able to bring on that capacity? What are you looking for, I guess, out of this facility in terms of meeting overall demand?

偉大的。就快一點吧。位於加利福尼亞州的液體灌裝設施。聽起來你們已經快要在那裡開始生產了。您能夠以多快的速度實現多少容量？我想，在滿足總體需求方面，您希望從該設施中得到什麼？

Yes. So we have not disclosed what level of capacity we have other than that facility has quite a bit of capacity. I would say in any of our start-ups, there's a certain curve by which you start-up. So over the next 6 weeks, we would fully expect to start-up that facility. It'd be some time before it accounted for a big portion of our volume. So we continue to see it be pretty small. China will remain probably the main source of our volume, but it has potential. We scoped it out well before tariffs, really, from a standpoint of if we're going to automate certain unit operations, it'd be best to do that closer to our distribution center. And so that's where we are -- we have a lot further to go. So you'll hear us talk about that facility for quite some time.

是的。因此，我們沒有透露我們的產能水平，只是該設施擁有相當多的產能。我想說，在我們的任何一家初創企業中，都有一定的初創曲線。因此，在接下來的 6 週內，我們完全期望啟動該設施。它需要一段時間才能占到我們數量的很大一部分。所以我們仍然認為它很小。中國可能仍將是我們產量的主要來源，但它具有潛力。實際上，從我們要實現某些單元操作自動化的角度來看，我們在關稅之前就已經確定了範圍，最好是在靠近我們的配送中心的地方進行。這就是我們現在的處境——我們還有很長的路要走。因此，您會在相當長的一段時間內聽到我們談論該設施。

And then the other thing I would mention is we're seeing really good results with our lean initiatives in China. Lean techniques that we've been applying there with our various suppliers. A number of us just came back from our annual supplier summit and heard some great cases of the continued efficiency gains and savings that we can generate there.

我要提到的另一件事是，我們在中國的精益舉措取得了非常好的成果。我們一直在與各個供應商一起應用精益技術。我們中的一些人剛剛從年度供應商峰會上回來，聽到了一些我們可以在那裡實現持續效率提升和節省的優秀案例。

Our next question is from Bill Chappell, SunTrust Robinson Humphrey.

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

Tarang, in your longer-term guidance, the comment was, I guess, low to mid-single-digit growth. But when you get shelf space gains potential for mid to high, and I only ask about that because as we all remember, 2 years ago, when you got meaningful shelf space at both Target and Walmart, sales started to actually decelerate as it seemed that the company kind of wasn't quite ready for that much more space, and it took longer to kind of get used to and grow into that. So is the -- looking forward, should we expect continued kind of a lag as you add these spinners at Walmart or -- I mean, at Target or get shelf space at Boots or other places? Or do you feel like you've kind of recracked the code and can grow into that space a lot faster?

Tarang，在您的長期指導中，我想，您的評論是低至中個位數的增長。但是，當你獲得中高端貨架空間時，我只會問這個問題，因為我們都記得，兩年前，當你在塔吉特和沃爾瑪都獲得了有意義的貨架空間時，銷售實際上開始減速，因為看起來該公司還沒有準備好容納更多的空間，並且需要更長的時間來適應和成長。那麼，展望未來，當你在沃爾瑪或——我的意思是，在塔吉特或在 Boots 或其他地方添加這些旋轉器時，我們是否應該預期持續的滯後？或者您是否覺得自己已經重新破解了代碼並且可以更快地進入該領域？

Thanks, Bill. What I would say is, one, we've -- we're further along as a company in terms of our ability to kind of optimize the space even in bigger footprints as we've seen now with Target and Walmart. But you are correct that even when we get space, it does take a while before we start to improve the productivity of that space. And so our long-term model contemplates really both scenarios without the absence of major space or strategic extensions, low to mid-single digits in a down category. And then with major space as well as strategic extensions, and I think it's really the combination of the 2 that gives us confidence in that mid- to high single digits from a growth standpoint. And it's a CAGR over 3 years. So you can see some lumpiness in that CAGR. But overall, we felt -- feel much more comfortable in terms of that range given those circumstances.

謝謝，比爾。我想說的是，第一，作為一家公司，我們在優化空間的能力方面走得更遠，即使是在更大的佔地面積中，正如我們現在在塔吉特和沃爾瑪看到的那樣。但你是對的，即使我們獲得了空間，我們也需要一段時間才能開始提高該空間的生產力。因此，我們的長期模型實際上考慮了這兩種情況，而沒有重大空間或戰略擴展，下降類別中的低至中個位數。然後是主要空間以及戰略擴展，我認為這兩者的結合確實讓我們從增長的角度對中高個位數充滿信心。而且複合年增長率超過 3 年。所以你可以看到復合年增長率有些參差不齊。但總的來說，考慮到這些情況，我們覺得在這個範圍內感覺更舒服。

Got it. And then just another term that I used to hear a lot more than it didn't -- don't remember hearing on this call was Sweeten the Mix. So is that still -- are there still opportunities there on a gross margin or with the tariffs and pricing and everything going on right now, there's -- it's kind of put on the back burner?

知道了。然後是另一個我經常聽到的術語——不記得在這次電話會議上聽到過“甜蜜的混合”。那麼，在毛利率或關稅和定價以及目前正在發生的一切方面是否仍然存在機會，這有點被擱置了？

Sweeten the Mix is always going to be part of this company. It's how we got from 42% gross margins to over 63% gross margins. And as a reminder, for those who don't know what's Sweeten the Mix is. It's a combination of margin accretive innovation, cost savings and our ability to really drive kind of our margins up. I would say the balance on Sweeten the Mix, we believe there's still many opportunities. I mentioned a couple of them, both in terms of our liquid fill facility in Southern California as well as the lean manufacturing improvements we're making in China. We believe there's opportunity to improve gross margin further. However, we also want to be careful to Jon's earlier question on unit velocities and unit volumes that we don't get too greedy from a gross margin standpoint, where we lose the extraordinary value that consumers know and believe in us for. So we very well could take some of the progression that we would make on a cost basis, either it takes more to the bottom line or to continue to reinforce our high-quality and extraordinary value.

Sweeten the Mix 永遠是這家公司的一部分。這就是我們如何將毛利率從 42% 提高到 63% 以上的原因。提醒一下，對於那些不知道 Sweeten the Mix 是什麼的人。這是利潤增值創新、成本節約和我們真正提高利潤的能力的結合。我想說的是 Sweeten the Mix 的平衡，我們相信仍然有很多機會。我提到了其中的一些，包括我們在南加州的液體灌裝工廠以及我們在中國進行的精益生產改進。我們相信有機會進一步提高毛利率。然而，我們也想謹慎對待喬恩之前關於單位速度和單位體積的問題，從毛利率的角度來看，我們不要太貪婪，否則我們會失去消費者了解並相信我們的非凡價值。因此，我們很可能會在成本基礎上取得一些進步，要么需要更多的底線，要么繼續加強我們的高質量和非凡價值。

So we're -- as Mandy said earlier, we're satisfied with kind of where our margins are right now. We don't have a concerted effort to say, we want to get to some really high gross margin level for the sake of it. I think we took our 65% this quarter and it is a onetime for FX, it kind of gets you to a margin level, we're pretty comfortable with.

因此，正如曼迪之前所說，我們對目前的利潤率感到滿意。我們沒有齊心協力地說，我們希望為此達到非常高的毛利率水平。我認為本季度我們獲得了 65% 的利潤，這對外彙來說是一次性的，它可以讓你達到我們感到非常滿意的利潤水平。

Our next question is from Wendy Nicholson, Citi.

我們的下一個問題來自花旗集團的溫迪·尼科爾森。

Most of my questions have been answered, but I just had one with regard to, sort of, online sales. And I know elfcosmetics.com has been a strong channel for you in the past. Can you remind us how much that website represents as a percentage of your sales and specifically on Amazon, it was interesting because Coty called out Amazon as a particular area of strength in their current quarter, and I'm wondering if that's something across Beauty in general? And what trends you're seeing on Amazon?

我的大部分問題都已得到解答，但我只有一個關於在線銷售的問題。我知道 elfcosmetics.com 過去一直是您的強大渠道。您能否提醒我們該網站在您的銷售額中所佔的百分比，特別是在亞馬遜上，這很有趣，因為科蒂稱亞馬遜是其當前季度的一個特定優勢領域，我想知道這是否是美容領域的一個特點一般的？您在亞馬遜上看到了哪些趨勢？

Yes. So on the piece of the pie, how much is it, Wendy, we haven't really disclosed that. We will consider that when we talk about our K. I think the last thing we disclosed was the combination of elfcosmetics.com and our stores. So more to come on that when we issue our K. And then on Amazon, I'll let Tarang talk about that.

是的。那麼溫迪，就這塊餡餅而言，我們還沒有真正透露這一點。當我們談論我們的 K 時，我們會考慮這一點。我認為我們最後披露的是 elfcosmetics.com 和我們商店的合併。當我們發布 K 時，還會有更多內容。然後在亞馬遜上，我會讓 Tarang 談論這一點。

Yes. So I'd say, our overall digital business has been an area of strength for us throughout the year, and that's across customers, both elfcosmetics.com as well as the retailer.com. So most recently, we've seen some good trends at Amazon, but we've also seen very strong trends at ulta.com, target.com and walmart.com. We -- for us, we believe all of them are benefiting from the double down on digital initiatives that I talked about earlier and what we're able to do there.

是的。所以我想說，我們的整體數字業務全年都是我們的優勢領域，這涉及到 elfcosmetics.com 和 Retailer.com 的客戶。最近，我們在亞馬遜看到了一些良好的趨勢，但我們也在 ulta.com、target.com 和 walmart.com 上看到了非常強勁的趨勢。對我們來說，我們相信他們所有人都受益於我之前談到的數字化舉措以及我們能夠做的事情。

Now for the third quarter, I would say, we had really strong growth at the retailers.com. Elfcosmetics.com was not as strong in the third quarter as it has been so far this year, mainly because we did not repeat a 60% off promotion we did a year ago. We feel much more confident in terms of our ability to grow our elfcosmetics.com and other retailer.com businesses through the efforts I talked about in terms of data and personalization, and we feel really great about where those efforts are and what those efforts are yielding us.

我想說，第三季度，retailers.com 的增長非常強勁。Elfcosmetics.com 第三季度的表現不如今年迄今為止那麼強勁，主要是因為我們沒有重複一年前的 60% 折扣促銷活動。通過我在數據和個性化方面所談到的努力，我們對發展 elfcosmetics.com 和其他retailer.com 業務的能力更有信心，並且我們對這些努力的位置和內容感到非常滿意屈服於我們。

So -- but that's still the -- elfcosmetics.com is still a priority kind of over the long term. It's not like you've changed your strategy, big picture, to walk away from direct-to-consumer.

因此，但從長遠來看，elfcosmetics.com 仍然是一個優先事項。這並不是說你改變了策略、大局，放棄直接面向消費者。

No. I mean, we're a digitally native brand. I mean, the only thing we had was a cosmetics.com when we started. So it's always going to be our top focus. And in fact, our second strategic imperative of double down on digital. All the initiatives I talked about benefit off cosmetics.com as to kind of our full focus on our Beauty Squad program and everything we can do there. So no, it's absolutely the engine that drives everything else. It's a major part of our consumer engagement as well.

不。我的意思是，我們是一個數字原生品牌。我的意思是，我們剛開始時唯一擁有的就是化妝品網站。所以它永遠是我們的首要關注點。事實上，我們的第二個戰略要務是加倍數字化。我談到的所有舉措都受益於化妝品網站，因為我們完全專注於我們的 Beauty Squad 計劃以及我們在那裡可以做的一切。所以不，它絕對是驅動其他一切的引擎。這也是我們消費者參與的重要組成部分。

Our next question is from Mark Astrachan, Stifel.

我們的下一個問題來自 Stifel 的 Mark Astrachan。

I guess I wanted to start with the long-term model. And thinking about the grocery extension, thinking about Boots. Since we sit here with a quarter or so to go to next year, would you consider those major shelf space gains? I mean, are we looking towards high end next year? I guess, you don't have to get into guidance. But I guess, we're just -- I'm curious kind of how you would think about those 2 things as a major, minor?

我想我想從長期模型開始。並考慮雜貨店的擴展，考慮 Boots。由於我們坐在這裡還有四分之一左右的時間去明年，您會考慮這些主要的貨架空間收益嗎？我的意思是，我們明年是否會走向高端市場？我想，你不必接受指導。但我想，我們只是——我很好奇你會如何看待這兩件事作為主要還是次要？

And then more holistically on it. So you're talking about fiscal year growth. You talked about shelf resets largely coming in the fall. So I guess from a dynamic standpoint, how do we think about that? Is it more of a calendar, kind of when the fall reset to happen to the next year in terms of growth as opposed to flowing through in each fiscal year. So maybe some commentary there would be helpful.

然後更全面地考慮它。所以你談論的是財政年度的增長。您談到貨架重置主要在秋季進行。所以我想從動態的角度來看，我們如何看待這個問題？這更像是一個日曆嗎？就增長而言，秋季將重置為下一年，而不是每個財政年度。所以也許一些評論會有幫助。

Yes. Mark, it's Mandy. So on the long-term model, you're right, we're not giving specific guidance on fiscal '21 at this time, that will come in May. But I think the differentiator between major space gains and minor. When we say major, we're really talking about the top 3 retailers that we would consider from a major space, like we're talking -- major incremental space. So that's how I would differentiate those. And then in terms of shelf resets and the timing and when to think about that from a growth standpoint, again, Tarang talked about fall as being the reset and then there could also be spring of calendar '21 as well. And so those -- really, it just depends on when we get that space, when the reset happens, and then how quickly we can optimize that space is when you start to see the growth associated with those.

是的。馬克，這是曼迪。因此，就長期模型而言，您是對的，我們目前不會就 5 月份發布的 21 財年提供具體指導。但我認為主要空間收益和次要空間收益之間的區別。當我們說“主要”時，我們實際上是在談論我們在主要空間中考慮的前 3 名零售商，就像我們正在談論的那樣——主要增量空間。這就是我區分它們的方式。然後，就貨架重置、時機以及何時從增長的角度考慮這一點，塔朗再次談到秋季是重置，然後也可能是日曆 '21 的春季。因此，實際上，這僅取決於我們何時獲得該空間，何時重置，以及當您開始看到與這些空間相關的增長時，我們可以多快地優化該空間。

And part of that is some of the retailers themselves are evolving in terms of how they are handling space. And historically, if you recall, Walmart did not have a set time for their space decisions. They kind of took it as they did modules of stores. And when they test a store, we picked up more space. Target historically was more into spring. And then Ulta, you saw some combination, the big one in the spring and then depending on what end up doing with department. And so that's why it's no longer -- we used to really anchor people on the spring resets, we're seeing more kind of dynamic in terms of how they're handling space and how they're handling segments of their stores on the overall space. But on the long-term model, just a little bit more perspective there. Part of the reason why we wanted to provide the long-term model as our investors have been asking us for it of putting the context of our growth, our strong growth, the year that we didn't grow, and now we're growing again, how should we think about it. So we try to frame it in a way that you could see without space or major space or strategic extensions, what it would be? And then with that, what it would be? In terms of grocery and Boots, I would not consider them major space extensions.

部分原因是一些零售商本身在如何處理空間方面正在不斷發展。從歷史上看，如果你還記得的話，沃爾瑪並沒有規定空間決策的時間。他們將其視為商店模塊。當他們測試一家商店時，我們獲得了更多的空間。從歷史上看，目標更多是在春季。然後Ulta，你看到了一些組合，春季的大組合，然後取決於部門最終做什麼。所以這就是為什麼它不再 - 我們曾經真正將人們錨定在春季重置上，我們在他們如何處理空間以及如何處理整體商店的各個部分方面看到了更多的動態空間。但就長期模型而言，需要多一點視角。我們想要提供長期模型的部分原因是我們的投資者一直要求我們將我們的增長、我們的強勁增長、我們沒有增長的那一年和現在我們正在增長的背景放在一起再次，我們應該如何思考。因此，我們嘗試以一種您可以在沒有空間或主要空間或戰略擴展的情況下看到的方式來構建它，它會是什麼？那麼，那會是什麼？就雜貨店和 Boots 而言，我不認為它們是主要的空間擴展。

That's helpful. And just lastly, the 12% to 14% as a percent of sales for marketing spend. How do we think about kind of puts and takes as to whether that's the right level or not? I guess, how do you think about it as whether it's the right level or not? Like why would it go higher? Why would it stay the same? Why would it potentially go lower?

這很有幫助。最後，營銷支出佔銷售額的 12% 到 14%。我們如何考慮看跌期權和看跌期權的類型，以確定這是否是正確的水平？我想，您如何看待這個水平是否合適？比如為什麼會更高？為什麼它會保持不變？為什麼它可能會走低？

Yes. So for the 12% to 14%, we've talked about net sales growth, really being that major metric that we're looking at in terms of the effectiveness of our marketing. And so with the 12% to 14%, we've continued to see that level of success. And so that's where we've put it for now. We've gotten the question before, how do we know that's the right level. It's just a level that we feel comfortable with, given where we're at.

是的。因此，對於 12% 到 14% 的市場，我們討論了淨銷售額增長，這實際上是我們在營銷有效性方面考慮的主要指標。因此，對於 12% 到 14% 的人來說，我們繼續看到這種程度的成功。這就是我們現在放置的地方。我們之前已經被問過這個問題，我們如何知道這是正確的級別。考慮到我們所處的位置，這只是我們感到滿意的水平。

And some of the other internal metrics we look at, both in terms of reach conversion as well as engagement and then externally on Google Search and earned media value. We're always looking at the effectiveness and what the ROI of that spend is, we're comfortable, particularly given the delta between that 12% to 14% to where we were. So right now, we're very comfortable with that level. And again when we give guidance for FY '21, we can update you.

我們還關註一些其他內部指標，包括覆蓋率轉化率和參與度，以及外部的 Google 搜索和贏得的媒體價值。我們一直在關注支出的有效性和投資回報率，我們對此感到滿意，特別是考慮到與我們原來水平之間的 12% 到 14% 之間的差異。所以現在，我們對這個水平感到非常滿意。當我們為 21 財年提供指導時，我們可以再次為您提供最新信息。

We have reached the end of the question-and-answer session. And I will now turn the call back over to Tarang Amin for closing remarks.

我們的問答環節已經結束。現在，我將把電話轉回給塔朗·阿明，讓其致閉幕詞。

Thank you, everyone, for joining us. We look forward to speaking with you in May, when we'll discuss our full fiscal 2020 results as well as our fiscal '21 outlook. Thanks, and have a great day.

謝謝大家加入我們。我們期待在 5 月與您交談，屆時我們將討論 2020 財年的全部業績以及 21 財年的展望。謝謝，祝你有美好的一天。

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

今天的會議到此結束。此時您可以斷開線路，感謝您的參與。