elf Beauty Inc (ELF) 2020 Q2 法說會逐字稿

Greetings, and welcome to the e.l.f. Beauty, Inc. Second Quarter Fiscal 2020 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded.

問候，歡迎來到 e.l.f.美容公司2020 財年第二季度收益電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, Willa McManmon, VP of Investor Relations and Corporate Communications. Thank you. You may begin.

現在我很高興向您介紹主持人，投資者關係和企業傳播副總裁威拉·麥克曼蒙 (Willa McManmon)。謝謝。你可以開始了。

Good afternoon, everyone. Thank you for joining us today to discuss e.l.f. Beauty's Second Quarter Fiscal 2020 Earnings Results. My name is Willa McManmon, and I'm Vice President of Investor Relations and Corporate Communications at e.l.f. For the past year, I was part of e.l.f.'s outside IR firm, Ellipsis. In September, I joined e.l.f. in-house. I've been heading up IR and Communications at companies like Trimble and Cisco Jasper for 20 years, and I'm thrilled to be a part of the e.l.f. team and mission.

大家下午好。感謝您今天加入我們討論 e.l.f.Beauty 2020 財年第二季度盈利結果。我叫 Willa McManmon，是 e.l.f. 投資者關係和企業傳播副總裁。去年，我是 e.l.f. 外部 IR 公司 Ellipsis 的一員。9月份，我加入了e.l.f。內部。20 年來，我一直在 Trimble 和 Cisco Jasper 等公司負責 IR 和通信部門，我很高興能成為 e.l.f. 的一員。團隊和使命。

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, 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假設、預期、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 presentations 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演示文稿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。

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

這樣，我會將電話轉給 Tarang。

Thank you, Willa. It's great to have you on the team. Good afternoon, everyone, and thank you for joining us today. We're pleased with our second quarter results with net sales of $68 million and adjusted EBITDA of $15 million. Excluding e.l.f. stores, net sales were up 11% versus year ago. We're also taking market share. According to Nielsen, in the 12 weeks ended October 5, 2019, our dollar share of the color cosmetics category was 4.7%, up 70 basis points versus year ago. Given this momentum, we are, again, raising our fiscal year guidance, which Mandy will outline shortly.

謝謝你，薇拉。很高興有你加入團隊。大家下午好，感謝您今天加入我們。我們對第二季度的業績感到滿意，淨銷售額為 6800 萬美元，調整後 EBITDA 為 1500 萬美元。不包括 e.l.f.商店淨銷售額比去年同期增長 11%。我們也在爭奪市場份額。根據尼爾森的數據，截至 2019 年 10 月 5 日的 12 週內，我們在彩妝類別中的美元份額為 4.7%，比去年同期增長 70 個基點。鑑於這種勢頭，我們將再次提高我們的財政年度指導，曼迪將很快概述。

We entered fiscal year 2020, laser-focused on 5 strategic imperatives to drive top line and market share improvements. Let me provide a brief update on each of these. Our first strategic imperative is to drive demand in our brand. We have a compelling mission to make the best of beauty accessible for every eye, lip and face, and it's our job to make sure we're communicating our unique value proposition.

進入 2020 財年，我們重點關注 5 項戰略要務，以推動收入和市場份額的提高。讓我簡要介紹一下這些內容的最新情況。我們的首要戰略任務是推動我們品牌的需求。我們有一個令人信服的使命，讓每個眼睛、嘴唇和臉部都能享受到最好的美麗，而我們的工作就是確保傳達我們獨特的價值主張。

We are pleased with the initial results behind our #elfingamazing campaign, which delivered 175 different versions of playable ads to pique consumer interest based on their affinities. Examples include: e.l.f. control, which shows a consumer filling up her shopping basket with e.l.f. products to celebrate our premium quality and extraordinary value; and e.l.f. respect, which underscores the fact that we are cruelty-free and vegan.

我們對 #elfingamazing 活動的初步結果感到滿意，該活動提供了 175 個不同版本的可玩廣告，根據消費者的興趣激發他們的興趣。例子包括： e.l.f.控件，顯示消費者將 e.l.f. 裝滿她的購物籃。產品彰顯我們的優質品質和非凡價值；和 e.l.f.尊重，這強調了我們不殘忍和純素食這一事實。

A YouTube brandless study that we commissioned found that digital ads had video completion rates of around 50% and ad recall around 60%, both far above benchmarks. Based on our initial success, we chose to take up our marketing plus e-commerce spend to 14% of net sales for the quarter, and we expect spend to land in the 12% to 14% range for fiscal 2020.

我們委託 YouTube 進行的一項無品牌研究發現，數字廣告的視頻完成率約為 50%，廣告回憶率為 60% 左右，兩者均遠高於基準。基於我們最初的成功，我們選擇將營銷加電子商務支出佔本季度淨銷售額的 14%，我們預計 2020 財年的支出將在 12% 到 14% 的範圍內。

Our second strategic imperative is a major step-up in digital. e.l.f. was the first digitally native mass beauty brand, and we've always focused on authentic engagement with our consumers. We continue to expand our digital presence and test new platforms. Last month, we sponsored the #eyeslipface challenge on TikTok, a video music platform with hundreds of millions of users and a huge following among Gen Z. The e.l.f. challenge encouraged people to record their own 15-second video to an original song Eyes. Lips. Face., which we commissioned from a Grammy award-winning songwriter. The campaign resulted in a number of firsts, including most views upon launch, first paid ad to hold the #1 trending hashtag on TikTok, and first branded hashtag challenge to feature an original song. The response has been incredible. Over 1.5 million videos have been created, the record for any TikTok brand challenge, generating a staggering 3.2 billion views.

我們的第二個戰略要務是數字化方面的重大進步。e.l.f.是第一個數字原生大眾美容品牌，我們始終專注於與消費者的真實互動。我們繼續擴大我們的數字業務並測試新平台。上個月，我們贊助了 TikTok 上的 #eyeslipface 挑戰賽，這是一個擁有數億用戶和 Z 世代大量追隨者的視頻音樂平台。挑戰鼓勵人們將自己的 15 秒視頻錄製到原創歌曲《Eyes》中。嘴唇。Face.，我們委託格萊美獎獲獎歌曲作者創作。該活動創造了多項第一，包括發布後觀看次數最多、第一個付費廣告佔據 TikTok 上第一大趨勢標籤，以及第一個以原創歌曲為主題的品牌標籤挑戰。反響令人難以置信。已創建超過 150 萬個視頻，創造了 TikTok 品牌挑戰的記錄，觀看次數達到驚人的 32 億次。

Our major step-up in digital has resulted in increased e.l.f. presence across digital platforms. We recently reached 5 million followers on Instagram. Our Beauty Squad Loyalty Program now has over 1.5 million members, and most importantly, elfcosmetics.com and our retailer.com sites continue to show strong growth.

我們在數字化方面的重大進步導致了 e.l.f. 的增加。跨數字平台的存在。最近，我們在 Instagram 上的粉絲數量達到了 500 萬。我們的 Beauty Squad 忠誠計劃現已擁有超過 150 萬會員，最重要的是，elfcosmetics.com 和我們的retailer.com 網站繼續呈現強勁增長。

Our third strategic imperative is providing first-to-mass prestige quality products at an extraordinary value. We know how to make products people want at e.l.f. speed. Our newest Holy Grail products like Poreless Putty Primer and 16HR Camo Concealer continue to perform well, supporting our leadership in the primer category and adding to market share gains in the concealer category.

我們的第三個戰略要務是以非凡的價值提供一流的優質產品。我們知道如何在 e.l.f. 製造人們想要的產品。速度。我們最新的聖杯產品，如 Poreless Putty Primer 和 16HR Camo Concealer 繼續表現良好，支持了我們在底漆類別中的領導地位，並增加了遮瑕膏類別中的市場份額。

In the fall resets, we've also seen strong performance behind our $2 Wow Brow, 18-piece eyeshadow pallettes and our total face sponge. We're also seeing strong success in skin care. According to Nielsen, for the 12 weeks ended October 5, 2019, e.l.f. skin care sell-through was up 39%. Our recent innovations built on a foundation of e.l.f. products that have seen multiyear success and are still driving sales to make e.l.f. the #1 mass brand for primers, eyebrow pencils and brushes.

在秋季重置中，我們還看到了 2 美元的 Wow Brow、18 件眼影盤和全臉海綿背後的強勁表現。我們還看到皮膚護理領域取得了巨大成功。根據尼爾森的數據，截至 2019 年 10 月 5 日的 12 週內，e.l.f.護膚品銷量增長 39%。我們最近的創新建立在 e.l.f. 的基礎上。這些產品已經取得了多年的成功，並且仍在推動銷售，使 e.l.f.底漆、眉筆和刷子的第一大大眾品牌。

We also continue to expand our reach through new product collaborations with key influencers. Last month, we introduced a collection with Nabela Noor, a Bangladeshi-American beauty influencer whose 1.2 million followers embrace her platform of self love and inclusivity no matter your age, size or skin color. The launch resulted in over 140 million impressions from leading beauty media outlets, including allure.com, refinery29.com and the thezoereport.com, as well as another 81 million reached through influencers. These results show the power of product collaborations to amplify the e.l.f. brand.

我們還繼續通過與關鍵影響者的新產品合作來擴大我們的影響力。上個月，我們推出了 Nabela Noor 的系列，Nabela Noor 是一位孟加拉裔美國美容影響者，無論您的年齡、身材或膚色如何，她的 120 萬粉絲都擁護她的自愛和包容性平台。此次發佈為 allure.com、refinery29.com 和 thezoereport.com 等領先美容媒體帶來了超過 1.4 億次展示，另外還通過影響者獲得了 8100 萬次展示。這些結果顯示了產品合作在放大 e.l.f. 方面的力量。品牌。

Our fourth strategic imperative is to improve national retailer productivity through Project Unicorn, our multiphase, multiyear package and self initiative. As of the second quarter, the first 2 phases of Unicorn, which include most of our retail SKUs, are complete. We're pleased that Unicorn, alongside our marketing activation, has resulted in a meaningful step-up in productivity. We remain the most productive brand on a dollar-per-foot basis at both Walmart and Target, our 2 largest customers. We're also growing productivity at Ulta Beauty, our third largest customer.

我們的第四個戰略要務是通過“獨角獸計劃”、我們的多階段、多年計劃和自我倡議來提高全國零售商的生產力。截至第二季度，Unicorn 的前兩個階段（包括我們的大部分零售 SKU）已完成。我們很高興 Unicorn 與我們的營銷活動一起帶來了生產力的有意義的提升。在沃爾瑪和塔吉特這兩家最大的客戶中，按每英尺美元計算，我們仍然是最俱生產力的品牌。我們還提高了第三大客戶 Ulta Beauty 的生產力。

Phase 3 of Unicorn is expected to roll out during spring resets and is designed to bring better visual merchandising to our key innovations. In addition to our national retail partners, we also saw productivity gains across our other channels with double-digit growth in our retailers.com sites and on elfcosmetics.com where we're enhancing the e.l.f. consumer experience with capabilities such as machine learning and personalization. We also saw growth in our international business, especially in the U.K., driven by Boots and Superdrug.

Unicorn 的第三階段預計將在春季重置期間推出，旨在為我們的關鍵創新帶來更好的視覺營銷。除了我們的全國零售合作夥伴之外，我們還看到其他渠道的生產力提高，我們的retailers.com網站和elfcosmetics.com上都實現了兩位數的增長，我們正在增強e.l.f.機器學習和個性化等功能的消費者體驗。在 Boots 和 Superdrug 的推動下，我們的國際業務也取得了增長，尤其是在英國。

Our fifth strategic imperative is to generate cost savings to help fuel brand investments. Our most important cost savings initiative was closing our 22 e.l.f.-branded stores in February. This was a difficult decision as it impacted half our employee base, but we move boldly and with e.l.f. values to do the right thing for our employees. I'm happy to report that we successfully exited our 22 store leases for well below what we expected at the onset of this transition. Redeploying the $13.7 million in annual spend that we used to invest in stores is driving greater momentum in our national retailer and elfcosmetics.com businesses. We're also making good progress on our automation, new plan initiatives in Southern California and hope to be operational by the end of this fiscal year.

我們的第五個戰略要務是節省成本，以幫助推動品牌投資。我們最重要的成本節約舉措是在 2 月份關閉 22 家 e.l.f. 品牌商店。這是一個艱難的決定，因為它影響了我們一半的員工基礎，但我們勇敢地採取了行動。價值觀為我們的員工做正確的事。我很高興地向大家報告，我們成功終止了 22 家商店的租約，價格遠低於我們在過渡開始時的預期。重新部署我們用於投資商店的 1,370 萬美元年度支出正在為我們的全國零售商和 elfcosmetics.com 業務帶來更大的動力。我們在南加州的自動化和新計劃舉措方面也取得了良好進展，並希望在本財年末投入運營。

Another important productivity and cost initiative in the second quarter was executing price increases to help mitigate tariffs. Recall, we increased prices on approximately 1/3 of our SKUs. This pricing action was most significant in almost 16-year history as we've primarily used innovation mix to drive average unit retails. I'm happy to report that all our national retail partners have implemented the price changes and that our initial unit declines are lower than what we modeled. Pricing delivered approximately 200 basis points of the 11% net sales growth for the quarter. We will closely monitor the long-term impact as we move forward.

第二季度另一個重要的生產力和成本舉措是提高價格以幫助降低關稅。回想一下，我們提高了大約 1/3 的 SKU 的價格。這次定價行動是近 16 年曆史上最重要的一次，因為我們主要使用創新組合來推動平均單位零售量。我很高興地向您報告，我們所有的全國零售合作夥伴都已實施了價格調整，並且我們最初的銷量下降幅度低於我們的模型。定價使本季度 11% 的淨銷售額增長約 200 個基點。我們將在前進過程中密切關注長期影響。

The progress on our 5 strategic imperatives is encouraging. What gives me the greatest confidence in our future is the quality and dedication of our team. Over the past 5 years, we've hired 190 of our approximately 200 employees. Our team comes from blue-chip, beauty and consumer backgrounds, and they love moving at e.l.f. speed. I'm proud that our employee base is 75% female, 60% millennial and 40% diverse, reflecting the consumers that we serve. I'm also proud that of all the companies listed on U.S. exchanges, e.l.f. is 1 of 37 companies with more than 50% women on the Board. I have confidence in this team's ability to continue to recharge and grow the brand.

我們的 5 項戰略要務取得的進展令人鼓舞。讓我對我們的未來充滿信心的是我們團隊的素質和奉獻精神。在過去 5 年裡，我們僱傭了約 200 名員工中的 190 名。我們的團隊來自藍籌、美容和消費者背景，他們喜歡在 e.l.f. 移動。速度。我感到自豪的是，我們的員工群體中 75% 是女性，60% 是千禧一代，40% 是多元化的，這反映了我們所服務的消費者。我還感到自豪的是，在所有在美國交易所上市的公司中，e.l.f.董事會中女性比例超過 50% 的 37 家公司之一。我對這個團隊有能力為品牌持續充電和成長充滿信心。

It's an exciting time at e.l.f. Beauty. We're pleased with the progress executing our strategic imperatives. These are long-term initiatives that we believe will build shareholder value.

這是 e.l.f. 激動人心的時刻。美麗。我們對執行戰略任務所取得的進展感到高興。我們相信這些是長期舉措，將創造股東價值。

With that, I'll turn the call over to Mandy to discuss our financial results and guidance.

接下來，我會將電話轉給曼迪，討論我們的財務業績和指導。

Thank you, Tarang. I'm also pleased with the second quarter results and the initial impact of our strategic imperatives.

謝謝你，塔朗。我也對第二季度的業績和我們戰略要務的初步影響感到滿意。

Let me cover the financial highlights of the quarter ended September 30, 2019, as compared to the 3 months ended September 30, 2018. Excluding e.l.f. stores, net sales of $67.6 million were up 11% from year ago driven by increased productivity across channels and the initial impact from price increases, partially offset by the lower holiday shipments that we discussed last quarter. For the first half, net sales were up 9%, excluding e.l.f. stores, and up 5% on a 2-year stack basis.

讓我介紹一下截至 2019 年 9 月 30 日的季度與截至 2018 年 9 月 30 日的三個月相比的財務亮點。不包括 e.l.f.商店的淨銷售額為 6,760 萬美元，較上年同期增長 11%，這得益於跨渠道生產力的提高以及價格上漲的初步影響，但部分被我們上季度討論的假日出貨量下降所抵消。上半年淨銷售額增長 9%，不包括 e.l.f.商店，並在 2 年基礎上增長 5%。

Gross margin of 64% was up 300 basis points compared to prior year. The improvement versus last year was primarily driven by price increases taken in late July, along with margin accretive innovation, vendor concessions and favorable foreign exchange rates, partially offset by tariffs. Note that Q2 gross margin was higher than our forecasted run rate because we have the onetime benefit of higher pricing without the full impact of tariffs at the 25% level. We expect the full impact of tariffs at the 25% level in the back half of this year. As a reminder, our inventory value will also increase as we bring the tariff goods into our warehouse, though unit inventory should remain relatively flat.

毛利率為 64%，比上年增長 300 個基點。與去年相比的改善主要是由 7 月下旬的價格上漲以及利潤增值創新、供應商優惠和有利的外匯匯率推動的，但部分被關稅所抵消。請注意，第二季度的毛利率高於我們預測的運行率，因為我們可以獲得較高定價的一次性好處，而無需受到 25% 水平關稅的全面影響。我們預計 25% 關稅水平的全面影響將在今年下半年顯現。提醒一下，當我們將關稅貨物帶入我們的倉庫時，我們的庫存價值也會增加，儘管單位庫存應該保持相對平穩。

On an adjusted basis, SG&A as a percentage of sales was 51%, up from 45% last year, primarily driven by increased investment in our marketing digital initiatives and increased depreciation expense related to customer fixture programs. This is partially offset by cost savings from the closure of our 22 e.l.f. stores.

調整後，SG&A 佔銷售額的百分比為 51%，高於去年的 45%，這主要是由於我們對營銷數字計劃的投資增加以及與客戶固定項目相關的折舊費用增加。這部分被我們關閉 22 e.l.f. 所節省的成本所抵消。商店。

In Q2, marketing and e-commerce spend was 14% of net sales compared to 7% in the year ago quarter. On the last call, we discussed marketing plus e-commerce spend between 10% and 12% for the year, while reserving the right to take spend up based upon what we see on the top line. Given the top line results, we expect to see marketing spend at 12% to 14% for fiscal 2020.

第二季度，營銷和電子商務支出占淨銷售額的 14%，而去年同期為 7%。在上次電話會議上，我們討論了今年營銷加電子商務支出在 10% 到 12% 之間的情況，同時保留根據我們在營收中看到的情況增加支出的權利。鑑於營收結果，我們預計 2020 財年營銷支出將增長 12% 至 14%。

Adjusted EBITDA of $15 million was down 1% versus $15.1 million a year ago. Adjusted net income was $7.7 million or $0.15 per diluted share compared to $8.4 million or $0.17 per diluted share a year ago. We generated $4.1 million of cash flow from operations in the quarter, bringing our cash balance to $58.7 million as of September 30, 2019, compared to a cash balance of $33.6 million last year. The improvement was primarily driven by stronger operating results, partially offset by a decrease in other liabilities related to termination payments on store leases.

調整後 EBITDA 為 1500 萬美元，比一年前的 1510 萬美元下降 1%。調整後淨利潤為 770 萬美元，即稀釋後每股收益 0.15 美元，而一年前為 840 萬美元，即稀釋後每股收益 0.17 美元。本季度我們的運營產生了 410 萬美元的現金流，截至 2019 年 9 月 30 日，我們的現金餘額達到 5,870 萬美元，而去年的現金餘額為 3,360 萬美元。這一改善主要是由更強勁的經營業績推動的，但部分被與商店租賃終止付款相關的其他負債的減少所抵消。

In the second quarter, we repurchased approximately $1.5 million of stock against our $25 million share repurchase program, bringing the total amount repurchased to date to $2.5 million.

第二季度，我們根據 2500 萬美元的股票回購計劃回購了約 150 萬美元的股票，使迄今為止的回購總額達到 250 萬美元。

Our investment priorities remain focused on our 5 strategic imperatives as well as strategic extensions.

我們的投資重點仍然集中在我們的 5 項戰略要務以及戰略擴展上。

Now turning to our fiscal 2020 guidance. We expect net sales to be up 4% to 6% versus fiscal 2019, excluding the impact of e.l.f. stores. This is up from the negative 4% to flat range previously guided.

現在轉向我們的 2020 財年指導。我們預計淨銷售額將比 2019 財年增長 4% 至 6%，排除 e.l.f. 的影響。商店。這高於先前指導的負 4% 至持平範圍。

We expect adjusted EBITDA between $52 million and $55 million, adjusted net income between $23 million and $25 million and adjusted EPS of $0.44 to $0.48 per share on a fully diluted basis with a share count of 52.5 million.

我們預計調整後的EBITDA 在5200 萬美元至5500 萬美元之間，調整後的淨利潤在2300 萬美元至2500 萬美元之間，調整後的每股收益在完全稀釋的基礎上為0.44 美元至0.48美元，股數為5250 萬美元。

We continue to expect our tax rate to come in at 28% for the year.

我們仍然預計今年的稅率為 28%。

The raise in guidance this quarter reflects the momentum we're seeing in our top line sales. We are balancing that momentum with the backdrop of a soft color cosmetics category as well as monitoring the impact of pricing on a longer-term basis. As a reminder, we expect to see a $6 million impact on net sales in Q3 from cycling a larger holiday program and pipeline in the third quarter last year. Additionally, we will face a tough comp in the fourth quarter as we anniversary the Poreless Putty Primer and 16HR Camo Concealer launches. The organic influencer activity around those launches resulted in a halo effect that drove strong sales in the year ago quarter.

本季度指導值的提高反映了我們在營收方面看到的勢頭。我們正在平衡這一勢頭與柔和彩妝品類的背景，並長期監測定價的影響。提醒一下，我們預計去年第三季度更大的假期計劃和渠道將給第三季度的淨銷售額帶來 600 萬美元的影響。此外，我們將在第四季度面臨一場艱難的競爭，因為我們正值 Poreless Putty Primer 和 16HR Camo Concealer 推出週年紀念日。圍繞這些產品發布的有機影響者活動產生了光環效應，推動了去年同期的強勁銷售。

From an adjusted EBITDA margin perspective, we are maintaining our 19% to 20% margin expectation for the year. As I stated earlier, in Q2, we had the onetime benefit of pricing without the tariff offset at the 25% level, which drove higher margins. Overall, the 19% to 20% range is consistent with what we've expected since the beginning of the year.

從調整後 EBITDA 利潤率的角度來看，我們維持今年 19% 至 20% 的利潤率預期。正如我之前所說，在第二季度，我們一次性獲得了 25% 水平的無關稅抵消定價優勢，這推動了更高的利潤率。總體而言，19％至20％的範圍與我們自年初以來的預期一致。

Before I turn the call over to questions, I want to reiterate that we are encouraged by the positive top line trends we're seeing and the direction the business has taken over the last few quarters. We remain focused on executing against our strategic imperatives.

在我將電話轉入提問之前，我想重申，我們看到的積極的營收趨勢以及過去幾個季度的業務發展方向令我們感到鼓舞。我們仍然專注於執行我們的戰略要求。

With that, operator, you may open the call to questions.

這樣，接線員，您就可以開始提問。

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

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

We have a question and then one clarification, if we could. The question, Tarang, is for you. Just broadly speaking, as you step back and look at what's happening in the color cosmetics space, can you give us some sense of where you feel like you're providing the consumer an advantage, whether it's through product innovation, price advantageousness or just providing a better experience at retail? Why do you think you're able to buck some of the trends we're seeing? And then, Mandy, for you, just a clarification on the tariff impact. Can you remind us what percentage of your business is coming from China? What percentage we should think about would have that gross margin effect of a 25% increase? And then how have you been working with your vendors on the concession side? How should we think about tariffs in totality for the year in terms of the impact?

如果可以的話，我們有一個問題，然後有一個澄清。塔朗，這個問題是問你的。簡而言之，當您退後一步，看看彩妝領域正在發生的事情時，您能否告訴我們您認為您在哪些方面為消費者提供了優勢，無論是通過產品創新、價格優勢還是僅僅提供更好的零售體驗？您為什麼認為您能夠扭轉我們所看到的一些趨勢？然後，曼迪，我想向您澄清一下關稅影響。您能否提醒我們，您的業務中有多少比例來自中國？我們應該考慮多大的百分比會產生 25% 增長的毛利率效應？那麼您在特許經營方面與供應商的合作情況如何？我們應該如何看待今年關稅總額的影響？

Steph, well, in terms of our consumer advantage, I really do think it comes to the heart of our overall proposition of providing the best of beauty and making it accessible to every eye, lip and face. And reestablishing that core mission and our ability through these 5 strategic imperatives to do so. I think that is how we're bucking the trends in the category. I think the category in the 12 periods ending October 5 was down about 4% on a track basis. Our ability to kind of pick up 70 basis points of share in that category is a direct reflection on the 5 strategic imperatives I just kind of reviewed, which really go back to the core fundamental proposition that we offer consumers.

斯蒂芬，嗯，就我們的消費者優勢而言，我確實認為這涉及到我們總體主張的核心，即提供最好的美麗並讓每個眼睛、嘴唇和臉部都能享受到它。並通過這 5 項戰略要務來重建核心使命和我們的能力。我認為這就是我們逆流而上的方式。我認為截至 10 月 5 日的 12 個週期中，該類別同比下降了約 4%。我們在該類別中獲得 70 個基點份額的能力直接反映了我剛剛回顧的 5 項戰略要務，這實際上回到了我們為消費者提供的核心基本主張。

And then, Steph, on the tariffs, so about 70% of our business is subject to the tariff at the 25% level. The remaining 30% is subject at the 15% level. Now there were lashes and some smaller things that were impacted by the September 1 tariff. And then there's the December 15 tariff that will be coming, and that impacts our brushes and tools business. And in terms of how we're working with our team there in China on vendor concessions, again, they are always tasked with finding savings, and that's no different for this year. And so our team is actively generating savings to help offset some of that tariff impact.

然後，Steph，關於關稅，我們大約 70% 的業務需要繳納 25% 的關稅。剩下的30%按照15%的標準執行。現在，睫毛和一些較小的東西受到了 9 月 1 日關稅的影響。12 月 15 日的關稅即將到來，這會影響我們的刷子和工具業務。至於我們如何與中國團隊就供應商優惠進行合作，他們總是肩負著節省成本的任務，今年也不例外。因此，我們的團隊正在積極節省開支，以幫助抵消部分關稅影響。

The last thing I would say, it is a balanced approach. So we are benefiting from both FX, the cost savings initiative Mandy talked, and we're particularly pleased with the execution we've had on pricing. Recall, we -- our approach on pricing was we took about 1/3 of our SKUs up in price. We did not do a peanut butter approach. We really targeted where we thought we have the best consumer value, and the consumer response to that has actually been quite strong. I mean generated about 200 basis points of our 11% sales growth. So we're really pleased with pricing, at least in these early days.

我要說的最後一件事是，這是一種平衡的方法。因此，我們從外彙和 Mandy 談到的成本節約計劃中受益，而且我們對定價執行情況感到特別滿意。回想一下，我們的定價方法是我們將大約 1/3 的 SKU 提價。我們沒有採用花生醬的方法。我們真正瞄準了我們認為具有最佳消費者價值的領域，消費者對此的反應實際上相當強烈。我的意思是為我們 11% 的銷售增長帶來了大約 200 個基點。所以我們對定價非常滿意，至少在早期是這樣。

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

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

Congrats on solid results. Regarding pricing, you've had a nice momentum there. What are your thoughts and learning from what you're doing going forward with pricing? And also, Tarang, in the context of the market trends you're seeing in terms of the softer color cosmetics and the promotional environment at competitors and department stores and others, would love your thoughts on how that might manifest, as well as Phase 3 Unicorn and what are some of the factors you're monitoring around Phase 3 that we should also pay attention to.

祝賀取得了紮實的成果。關於定價，你們的勢頭很好。您對未來定價的想法和經驗是什麼？此外，塔朗，在您所看到的市場趨勢背景下，即柔和的彩妝以及競爭對手、百貨商店和其他地方的促銷環境，希望您了解這一趨勢如何體現以及第三階段獨角獸以及您在第三階段監控的一些我們也應該注意的因素。

Oliver, I would say on pricing, building on my last comments, the execution has gone better than we expected, mainly because we really did focus on making the right value equations and taking a consumer-centric approach to pricing, including not touching pricing on some items where we really wanted to make a statement like our $2 brow products, which are doing extremely well.

奧利弗，我想說的是，在定價方面，根據我上次的評論，執行情況比我們預期的要好，主要是因為我們確實專注於製定正確的價值方程式並採取以消費者為中心的定價方法，包括不涉及定價有些產品是我們真正想表達的，比如我們的 2 美元眉毛產品，效果非常好。

In terms of going forward, I think we are cautiously looking at the market overall, just given how many different brands will be taking pricing. As the leader of the value segment, we very much led pricing in our segment. And we've since heard a number of competitors announced they're taking pricing. In this past period, we've seen some of those start to be reflected on shelf, others not. So we'll want to take a look at what happens to consumer behavior as other prices go up.

就未來而言，我認為我們正在謹慎地看待整個市場，只是考慮到有多少不同的品牌將採取定價。作為價值細分市場的領導者，我們在該細分市場的定價方面處於領先地位。此後我們聽到許多競爭對手宣布他們正在定價。在過去的一段時間裡，我們看到其中一些開始出現在貨架上，而另一些則沒有。因此，我們想看看當其他價格上漲時消費者行為會發生什麼變化。

In terms of other initiatives, Unicorn certainly has helped our productivity and helped us kind of weather the pricing at our national retailers where we've seen a pickup in productivity. Phase 3 really is focused on better visual merchandising on our key innovations. As I think of Phase 1 and 2, which are now complete, while they're the majority of our SKUs and we have done a really great job, we believe there's a further opportunity to really make sure that we're highlighting these Holy Grail, first-to-mass products that we uniquely can offer the consumer. And that's really much what Phase 3 is going to be about.

就其他舉措而言，獨角獸確實提高了我們的生產力，並幫助我們應對了全國零售商的定價問題，我們看到生產力有所提高。第三階段確實專注於我們關鍵創新的更好的視覺營銷。我認為第一階段和第二階段現已完成，雖然它們是我們的大多數 SKU，而且我們做得非常出色，但我們相信還有進一步的機會來真正確保我們突出這些聖杯，我們可以為消費者提供獨一無二的首批大眾化產品。這就是第三階段的內容。

Okay. And just a follow-up, on holiday, you've done a really good job executing on gifting in the past. What are your thoughts about what you're focused on this holiday versus last year? And how the consumer and trends might be shaping up as the key catalyst of the holiday period is a little bit different this year and there's a mixed headwinds and tailwinds?

好的。後續，在假期裡，您過去在送禮方面做得非常好。與去年相比，您對今年假期的重點有何看法？作為假期期間的關鍵催化劑，今年的消費者和趨勢可能會如何發展，與今年有些不同，逆風和順風並存？

Sure. So holiday is always an important program for us, I'd say, especially with Target, which is our longest-standing customer who's always done a really nice job on their holiday program. As Mandy mentioned, this year, we do have a smaller holiday program planned. I think as we looked across various customers, really, our level of holiday is probably going to be a bit smaller this year. But I'm especially excited by our overall presentation and offering. In fact, if you go on elfcosmetics.com right now, you'll see our holiday gift guide as well as our kind of a core assortment. I think it's the best assortment we've had and the best program we've had on holiday. So while the overall program size will be smaller, it continues to play an important role in terms of elevating the brand and bringing greater awareness to us.

當然。因此，我想說，假期對我們來說始終是一個重要的計劃，尤其是 Target，它是我們歷史最悠久的客戶，他們的假期計劃總是做得非常好。正如曼迪提到的，今年我們確實計劃了一個較小的假期計劃。我認為，當我們審視不同的客戶時，實際上，今年我們的假期水平可能會稍微小一些。但我對我們的整體展示和產品感到特別興奮。事實上，如果您現在訪問 elfcosmetics.com，您會看到我們的節日禮物指南以及我們的核心分類。我認為這是我們擁有的最好的品種，也是我們假期裡最好的節目。因此，雖然整體計劃規模會較小，但它在提升品牌和提高我們的知名度方面繼續發揮著重要作用。

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

我們的下一個問題來自摩根大通的 Andrea Teixeira。

So I was hoping to if -- to clarify if the new guidance embeds more doors or more displays than before or just higher velocity. And on the tariff impact, is it fair to say that because you took pricing in July, and obviously, you're mitigating -- as Tarang and Mandy said, mitigating with cost saves and also with the facts working in your favor, is it fair that all things equal, you're probably going to have a margin expansion into the next few quarters until you have the full impact of the tariffs and also because of your -- the timing of your inventory?

所以我希望能夠澄清新的指南是否比以前嵌入了更多的門或更多的顯示器，或者只是更高的速度。關於關稅影響，可以公平地說，因為您在 7 月份進行了定價，顯然，您正在減輕影響 - 正如塔朗和曼迪所說，通過節省成本以及對您有利的事實來減輕影響，是嗎？公平地說，在所有條件相同的情況下，您可能會在接下來的幾個季度內實現利潤率擴張，直到您受到關稅的全面影響，並且還因為您的庫存時間？

Okay. Yes, I'll take those questions, Andrea. So just to clarify, on the new guidance, no, it does not include any new doors. It really reflects the momentum that we're seeing in the business coming out of the first half of the year, balanced with the other items that I called out in my prepared remarks.

好的。是的，我會回答這些問題，安德里亞。所以澄清一下，在新的指導方針上，不，它不包括任何新的門。它確實反映了我們在今年上半年看到的業務勢頭，與我在準備好的講話中提到的其他項目相平衡。

On the tariffs side. So we are mitigating the tariff impact, but I will say that in Q2, we saw a onetime benefit is how I would characterize it from pricing. As that inventory starts to roll in, to your point, we will start to see margins erode. And so I would not say that I expect to see a margin benefit in the back half of this year. We do expect to start to see that 25% tariff level as we enter the back half.

在關稅方面。因此，我們正在減輕關稅影響，但我想說，在第二季度，我們看到了一次性的好處，我將如何從定價來描述它。正如您所說，隨著庫存開始增加，我們將開始看到利潤率下降。因此，我不會說我預計今年下半年會出現利潤率增長。我們確實預計進入下半年後將開始看到 25% 的關稅水平。

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。

Team, it's Eric Johnson on today for Erinn Murphy. First, I was curious if you could update where you're at on the Beauty Squad. I think you were over 1 million members last quarter, and I know you've added some personalization elements and other improvements. So I'm just curious what you guys have learned there over the last 90 days or so.

各位，今天埃里克·約翰遜代表艾琳·墨菲發言。首先，我很好奇你能否更新一下你在選美隊中的位置。我認為上個季度你們的會員數量超過 100 萬，而且我知道你們添加了一些個性化元素和其他改進。所以我只是好奇你們在過去 90 天左右的時間裡學到了什麼。

Sure. We're excited about our Beauty Squad Loyalty Program. We're now up over 1.5 million members. As we talked on our last call, we continue to add functionality and benefit features to that program, including receipt scanning. Some of the key -- as I mentioned, some of our key initiatives in machine learning and personalization include kind of dynamic product recommendations, customized messaging across our various platforms, including e-mail and text and then optimize media placements on the Beauty Squad Loyalty Program, and that's benefiting the brand overall and on the Beauty Squad Loyalty Program. It's also benefiting as is receipt scanning. So we remain bullish on Beauty Squad to be able to drive the brand and help propel elfcosmetics.com, which is seeing even stronger growth than our overall national retailer business.

當然。我們對 Beauty Squad 忠誠計劃感到非常興奮。我們現在擁有超過 150 萬會員。正如我們在上次電話會議中所說，我們繼續向該計劃添加功能和福利特性，包括收據掃描。正如我所提到的，我們在機器學習和個性化方面的一些關鍵舉措包括動態產品推薦、跨我們各種平台的定制消息傳遞（包括電子郵件和文本），然後優化 Beauty Squad Loyalty 上的媒體投放計劃，這有利於整個品牌和Beauty Squad 忠誠計劃。與收據掃描一樣，它也受益匪淺。因此，我們仍然看好 Beauty Squad 能夠推動品牌發展並幫助推動 elfcosmetics.com，該網站的增長速度甚至比我們整個全國零售商業務還要強勁。

Great. That's really helpful. And then on the marketing mix, it's been encouraging to see that upsized here and the guidance parameters for that raise. What channels are you specifically seeing the best return on that incremental spend? Is there any 1, 2 or 3 places you'd point us to, to monitor?

偉大的。這真的很有幫助。然後在營銷組合方面，令人鼓舞的是看到這裡的規模擴大以及此次加薪的指導參數。您特別認為哪些渠道可以帶來增量支出的最佳回報？您是否建議我們監控 1、2 或 3 個地方？

Sure. So the great news with our overall marketing activation is we're seeing strength across all channels. So we have seen growth across our national retailer business, elfcosmetics.com, and retailer.coms. And so we feel great about the growth given how broad scale the growth is across all channels. Certainly, our digital channels, given much of the spend is digitally oriented, are growing even faster. That includes both elfcosmetics.com as well as our retailer.coms, but there's great growth across each of them.

當然。因此，我們整體營銷活動的好消息是我們看到所有渠道的實力。因此，我們看到我們的全國零售商業務、elfcosmetics.com 和retailer.coms 都在增長。因此，考慮到所有渠道的增長規模之大，我們對增長感到滿意。當然，鑑於大部分支出都是數字化的，我們的數字渠道增長得更快。其中包括 elfcosmetics.com 和我們的retailer.com，但它們都取得了巨大的增長。

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

我們的下一個問題來自 Bill Chappell 和 SunTrust Robinson Humphrey 的對話。

Can you just -- I guess, trying to understand how much of the impact of both pricing and tariffs were in the quarter and with the thought that I assume pricing went through September 1, and then the tariffs of the products that kind of started to hit or impact you probably was around that same time as well. So is that the right way to look at it? You probably had about 1/3 of the impact on both pricing and tariffs and you'll get the full impact this quarter?

我想，你能否嘗試了解本季度定價和關稅的影響有多大，並考慮到我假設定價經過 9 月 1 日，然後產品的關稅開始下降您可能也在同一時間受到撞擊或影響。那麼這樣看待它正確嗎？您可能對定價和關稅產生了約 1/3 的影響，而本季度您將獲得全部影響？

Yes. So I think the right way to think about that, Bill, is when we talk about the tariffs that impacted Q2, that's still at the 10% level that we're looking at. We didn't really have a lot of the 25% level creep into Q2. We'll see that in the back half of the year. So you should expect the full impact of tariffs as we go into the second half at the 25% level.

是的。因此，比爾，我認為正確的思考方式是，當我們談論影響第二季度的關稅時，關稅仍處於我們正在考慮的 10% 水平。我們並沒有真正進入第二季度 25% 的水平。我們將在今年下半年看到這一點。因此，當我們進入下半年時，關稅將達到 25% 的水平，您應該預計到關稅的全面影響。

On the pricing side, so our pricing implemented in late July, so there's nearly a full quarter's worth of pricing included in the numbers for Q2.

在定價方面，我們的定價是在 7 月下旬實施的，因此第二季度的數據中包含了幾乎整個季度的定價。

Okay. Perfect. And then, Tarang, as we look forward to the resets next year, any color you can give us both on incremental shelf space at key retailers that you expect and/or kind of new product launches? I know in the past, part of the issue was getting all the products that you wanted into the retailers at the right time. And so just kind of understanding how that works for the spring resets.

好的。完美的。然後，塔朗，當我們期待明年的重置時，您可以為我們提供您期望的主要零售商增量貨架空間和/或新產品發布的任何顏色嗎？我知道過去，問題的一部分在於在正確的時間將您想要的所有產品送到零售商手中。因此，只需了解彈簧復位的原理即可。

Sure. So our incremental space, we usually don't comment on until after it started to be implemented. So for this year, the only space assumptions that we've previously disclosed are we did pick up additional space in a subset of Ulta doors. We did pick up distribution at Walgreens and Boots. And then, as part of Unicorn, we have, I think, much better merchandising as part of Unicorn. I'm particularly pleased with the flex towers that we have at Target. They really showcase our leadership segments. It almost looks like a space expansion for this year. And so we'll continue to build on that momentum as we enter the spring resets next year and continue to partner with our key retailers. So we will talk about space, really, when we're talking about kind of next fiscal year versus now, and a lot of that just has to do with our customers don't like letting their competitors know what they're doing with e.l.f.

當然。所以我們的增量空間，我們通常是在它開始實施之後才發表評論。因此，今年，我們之前披露的唯一空間假設是我們確實在 Ulta 門的子集中獲得了額外的空間。我們確實在沃爾格林和博姿獲得了分銷權。然後，作為獨角獸的一部分，我認為，作為獨角獸的一部分，我們擁有更好的商品銷售。我對 Target 的柔性塔特別滿意。他們真正展示了我們的領導力部分。它看起來幾乎像是今年的空間擴張。因此，當我們進入明年春季重置時，我們將繼續鞏固這一勢頭，並繼續與我們的主要零售商合作。因此，當我們談論下一個財年與現在的情況時，我們實際上會談論空間，這很大程度上與我們的客戶不喜歡讓他們的競爭對手知道他們在用 e.l.f. 做什麼有關。

In terms of new items, that clearly has been one of the big drivers of our success. So if I think it's Poreless Putty Primer, 16HR Camo Concealer as well as some of the new items I just mentioned, they really do fuel consumer interest as we uniquely can bring those types of items to the market at our accessible price points. And so we already have talked with our retail customers in terms of what items they'll be accepting. Unicorn is a great enabler because it helped us pick up kind of that space and that efficiency by which we have confidence that we can get a number of those new items into the spring resets, and as part of Phase 3, highlight and present them even better than we do right now. So I feel good about our pipeline and the number of new items that we have coming.

就新產品而言，這顯然是我們成功的重要推動力之一。因此，如果我認為它是 Poreless Putty Primer、16HR Camo Concealer 以及我剛才提到的一些新產品，它們確實會激發消費者的興趣，因為我們能夠以獨特的價格將這些類型的產品推向市場。因此，我們已經與零售客戶討論了他們將接受哪些商品。獨角獸是一個偉大的推動者，因為它幫助我們獲得了某種空間和效率，我們有信心能夠將許多新項目納入春季重置，並且作為第三階段的一部分，甚至突出顯示並展示它們比我們現在做的更好。因此，我對我們的產品線和新產品的數量感到滿意。

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。

I was curious if you could just comment on the Phase 2 of the Project Unicorn, which, I believe, has to do with your brushes. And also, related to that, in examining some of the IRI data, it does look like some of the bigger volume declines were in the area, perhaps, of brushes and accessories and tools, things like that. Are you going to be making any further pricing adjustments, so that you can increase the effectiveness of the overall pricing strategy? Or are you quite satisfied with the way things are now?

我很好奇你能否對獨角獸計劃的第二階段發表評論，我相信這與你的畫筆有關。此外，與此相關的是，在檢查 IRI 的一些數據時，看起來確實出現了一些較大的銷量下降，也許是在刷子、配件和工具等領域。您是否打算進行進一步的定價調整，以便提高整體定價策略的有效性？或者說你對現在的情況還算滿意嗎？

Linda, so I'd say Phase 2 of Unicorn is now complete, which did include all of our brushes. And a big part of that initiative was an insight we have that single brushes were facing greater headwinds since, I would say, where the consumer is migrating to, which is brush kits as well as sponges. And so what Phase 2 of Unicorn allowed us to do is actually fit in a few more of our brush kits where we can have incredible brushes at this extraordinary value every day as well as our total face sponge, which is picking up quite a bit of share in the sponge category, which happens to be quite fast growing. So as I step back and take a look at overall tools, accessories, we look at brushes, we look at some of our other tools, and we look at sponges. And when you mix those in, we're pleased with what we saw from Phase 2.

琳達，所以我想說獨角獸的第二階段現在已經完成，其中確實包括了我們所有的畫筆。該計劃的一個重要部分是我們了解到，單一刷子麵臨著更大的阻力，因為我想說，消費者正在轉向刷子套件和海綿。因此，Unicorn 的第二階段讓我們能夠做的實際上是在我們的刷子套件中安裝更多的刷子套件，我們每天都可以擁有如此超值的令人難以置信的刷子以及我們的全臉海綿，它可以吸收相當多的水分海綿類別的份額恰好增長得相當快。因此，當我退一步看一下整體工具、配件時，我們會看刷子，我們會看一些其他工具，我們會看海綿。當你將這些混合在一起時，我們對第二階段所看到的結果感到滿意。

And then on the pricing question there, Linda. So brushes, as you probably can see through the data, the AUR is higher, and so they were impacted by pricing. But as to my earlier comments on wanting to see the longer-term impact on pricing, that is why we're kind of taking this balanced approach to make sure that we understand how each item is impacted by pricing. But to Tarang's point, we were pleased with what we see thus far.

然後關於定價問題，琳達。所以刷子，你可能可以通過數據看到，AUR 更高，所以它們受到定價的影響。但至於我之前關於希望看到對定價的長期影響的評論，這就是為什麼我們採取這種平衡的方法來確保我們了解每個項目如何受到定價的影響。但就塔朗而言，我們對迄今為止所看到的情況感到滿意。

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 to start, a housekeeping question for Mandy. So just curious if you have an updated gross margin expectation for the full year.

首先，向曼迪提出一個家政問題。所以只是好奇您是否有更新的全年毛利率預期。

So I would say, for the back half of the year, you have what the front half actualized at. So for the back half of the year, I would continue to use the 60% margin that I have quoted all year long. That is kind of the run rate margin, excluding stores that you should continue to use as we go throughout the rest of fiscal 2020.

所以我想說，今年下半年，你已經實現了上半年的目標。所以下半年，我會繼續使用我全年報出的60%的利潤率。這是運行率利潤率，不包括在 2020 財年剩餘時間內您應該繼續使用的商店。

Okay. So it was essentially unchanged from your prior forecast?

好的。那麼它與您之前的預測基本沒有變化嗎？

Correct. Yes.

正確的。是的。

Okay. Okay. And a question for Tarang. So skin care, another quarter of strong growth. I was curious if you can just give some more color in terms of what's contributing to that growth and whether you're seeing more retailer interest in your skin care offering.

好的。好的。還有一個問題要問塔朗。因此護膚品又一個季度強勁增長。我很好奇您能否就推動增長的因素以及您是否看到零售商對您的護膚產品產生更多興趣提供更多信息。

Yes, we're really pleased with skin care. As a reminder, we entered skin care about 3 years ago relative to the almost 16-year history we have in color cosmetics. You have the same model holds in skin care where we can bring the best of skin care and make it accessible to our consumers. So what's driving skin care this year really is a continuation of the innovation we have on skin care. Our Hello Hydration! skin care cream has done extremely well as has the rest of kind of the lineup. And that's what you're seeing in what I quoted, which is the tracked data in Nielsen with skin care for the quarter being up 39%. In addition to the tracked channel data, Target is a huge driver of skin care for us. You also have nontracked skin care. I'm not going to give the numbers, but Ulta did take skin care full chain this year. So it's our second year of Ulta. They expanded color cosmetics in all doors last year. They've now expanded skin care in all doors this year, and we're seeing great traction there as well.

是的，我們對皮膚護理非常滿意。提醒一下，相對於彩妝行業近 16 年的歷史，我們大約 3 年前進入皮膚護理行業。在皮膚護理領域也有同樣的模式，我們可以為消費者提供最好的皮膚護理。因此，今年推動皮膚護理的真正原因是我們在皮膚護理方面的創新的延續。我們的你好補水！護膚霜和該系列的其他產品一樣，表現非常出色。這就是我引用的內容，尼爾森的跟踪數據，該季度護膚品增長了 39%。除了跟踪的渠道數據之外，Target 也是我們護膚品的巨大推動力。您還可以進行非追踪的皮膚護理。我不會透露具體數字，但 Ulta 今年確實實現了護膚全鏈條。這是我們 Ulta 的第二年。去年，他們在所有門店都擴大了彩妝業務。今年他們已經在所有領域擴大了皮膚護理業務，我們也看到了那裡的巨大吸引力。

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

我們的下一個問題來自喬恩·安徒生和威廉·布萊爾的對話。

Tarang, you mentioned international in the prepared comments. I'm wondering if you could talk a little bit more about the overall kind of trends or growth rates you're seeing in your international business and opportunities for additional distribution expansion.

Tarang，您在準備好的評論中提到了國際化。我想知道您是否可以多談談您在國際業務中看到的總體趨勢或增長率以及額外分銷擴張的機會。

Absolutely, Jon. I would say our international business has similar trends to the rest of our business in terms of the breadth of the growth that we're seeing. International is no different. In particular, I would point out the U.K., which has been our biggest focus, last year, as I mentioned, we had done full chain at Superdrug. It's good business at Superdrug. This year, Boots is starting to expand out the brand. In both customers, we're seeing very strong growth, in addition to our e.l.f. cosmetics site in the U.K. So it's a good indication of our strategy on international, which is -- it's not a big bang strategy. You're never going to hear us talk about entering 30 countries at the same time. It's really the same disciplined rollout that we had kind of in the U.S. when we went from 1 customer, really make sure we had a good foundation there and then went to another. I'd say the same thing is true on international. You'll see continued focus in the U.K. We've previously mentioned, we are testing the brand in Germany and some other key markets and are quite keen on our China e-commerce effort as well. So look forward to continue to provide updates, but it will be this disciplined rollout that we'll use internationally. And part of it is we have such a big opportunity remaining in the U.S. with the white space we have here with space and customers.

當然，喬恩。我想說，就我們所看到的增長廣度而言，我們的國際業務與我們的其他業務具有相似的趨勢。國際也不例外。我特別要指出的是英國，這是我們最大的關注點，去年，正如我提到的，我們在 Superdrug 完成了全鏈條銷售。Superdrug 的生意很好。今年，Boots 開始擴大品牌規模。除了我們的 e.l.f. 之外，我們在這兩個客戶中都看到了非常強勁的增長。英國的化妝品網站因此，這很好地表明了我們的國際戰略，即——這不是一個大爆炸戰略。您永遠不會聽到我們談論同時進入 30 個國家/地區。這實際上與我們在美國進行的嚴格的部署是一樣的，當時我們從一個客戶開始，真正確保我們在那裡有一個良好的基礎，然後再轉向另一個客戶。我想說國際上也是如此。您會看到英國的持續關注。我們之前提到過，我們正在德國和其他一些主要市場測試該品牌，並且也非常熱衷於我們在中國的電子商務工作。因此，期待繼續提供更新，但我們將在國際範圍內使用這種嚴格的推出。部分原因是我們在美國擁有如此大的機會，因為我們在這裡擁有空間和客戶。

That's helpful. Just pivoting back to skin care for a minute. Could you describe your kind of ACV or distribution in skin care relative to your distribution domestically in color cosmetics and -- just to kind of get a sense of the opportunity there. And then, are you happy with how your skin care products are being merchandised at retail? Are they co-located with your color cosmetics? Are they in different aisles? And is there opportunity for enhancement there?

這很有幫助。暫時回到皮膚護理上來。您能否描述一下您在皮膚護理領域的 ACV 類型或分銷情況，以及相對於您在國內彩妝領域的分銷情況——只是為了了解那裡的機會。然後，您對您的護膚品在零售店的銷售方式感到滿意嗎？它們與您的彩妝位於同一地點嗎？他們在不同的過道嗎？那裡有增強的機會嗎？

Yes. We have major white space when it comes to skin care from a distribution standpoint. We're not distributed nearly as broadly as we are with color cosmetics nor with the same type of footprint. I'd say the 2 primary customers we have from a national retailer standpoint, in addition to elfcosmetics.com, which you can find our entire skin care range on, are really Target, which really led skin care with us and Ulta Beauty. And at Target, where we do have larger shelf sets, skin care is co-located with our overall cosmetics session. We prefer that type of location where a consumer who's looking for e.l.f. can go across the entire regimen, really tying into the inside if you need good skin, to have good makeup coverage, and Target really does lead our skin care business given that co-location. Ulta Beauty decided to put skin care in a separate area, actually, in their skin care set. We originally -- I don't think we're crazy about the idea. But they tested it. It did so well that we decided to take it full chain. So we have examples of both areas. Our preference, I think, would be to locate it, if we have enough space within our main set. And you'll see us continue to expand the distribution on skin care, given how well it's done at both Target and Ulta.

是的。從分銷的角度來看，我們在皮膚護理方面有很大的空白。我們的分佈不像彩妝那麼廣泛，也沒有相同類型的足跡。我想說的是，從全國零售商的角度來看，除了elfcosmetics.com（您可以在其上找到我們整個護膚系列）之外，我們擁有的2 個主要客戶實際上是Target，它確實引領了我們和Ulta Beauty 的護膚業務。在塔吉特，我們確實有更大的貨架組，皮膚護理與我們的整體化妝品會議位於同一地點。我們更喜歡那種地方，讓那些正在尋找 e.l.f. 的消費者能夠找到自己想要的地方。可以涵蓋整個護理方案，如果您需要良好的皮膚，並具有良好的化妝覆蓋率，那麼真正將其融入內部，並且考慮到同一地點，塔吉特確實引領了我們的皮膚護理業務。Ulta Beauty 決定將護膚品放在一個單獨的區域，實際上是在他們的護膚套裝中。我們最初——我不認為我們對這個想法感到瘋狂。但他們測試了它。它的表現非常好，我們決定全面採用它。所以我們有這兩個領域的例子。我認為，如果我們的主場景中有足夠的空間，我們的首選是找到它。鑑於 Target 和 Ulta 的出色表現，您會看到我們繼續擴大護膚品的分銷範圍。

Excellent. I'm going to squeeze 1 more in quickly. Could you give us an update on the in-house production effort timing there and if there are anything to consider in terms of that changing kind of your margin -- the margin profile of the business over time?

出色的。我要快速再擠1個。您能否向我們提供有關內部生產工作時間安排的最新信息，以及在您的利潤變化（隨著時間的推移，業務的利潤狀況）方面是否有任何需要考慮的事情？

Sure. So we have 2 main initiatives when it comes to our operations in the U.S. The first was automation, both automating our e-commerce line in Columbus, Ohio as well as one of our main lines in Ontario, California. Those automation efforts are now mainly complete, and we're reaping the benefits of that from a cost saving standpoint as well as efficiency and our ability to reach consumers faster.

當然。因此，我們在美國的運營有兩項主要舉措。第一個是自動化，既實現了俄亥俄州哥倫布市電子商務線的自動化，也實現了加利福尼亞州安大略省的一條主要線的自動化。這些自動化工作現已基本完成，從節省成本的角度以及效率和更快接觸消費者的能力的角度來看，我們正在從中受益。

The second major initiative is building a plant in Southern California, not that far from our distribution center. That plant should be operational by the end of our fiscal year. And importantly, we meet plans for that plant well before tariffs. It really was, if we're going to automate certain aspects of our operation, think of liquid fill in a bottle, it made sense to put that automation here in the United States near our distribution center, both from a speed advantage as well as cost. Certainly, that plant is looking even better in a tariff environment where there are additional savings associated, depending on what happens with tariffs. So I'd say, well on track on both those initiatives.

第二個主要舉措是在南加州建立一家工廠，距離我們的配送中心不遠。該工廠應在我們財政年度結束前投入運營。重要的是，我們在關稅之前就滿足了該工廠的計劃。事實上，如果我們要實現運營的某些方面的自動化，例如將液體灌裝到瓶子中，那麼將自動化部署在美國靠近我們的配送中心是有意義的，無論是從速度優勢還是成本。當然，該工廠在關稅環境中看起來甚至更好，根據關稅的情況，可以節省額外的費用。所以我想說，這兩項舉措都進展順利。

The last thing I will tell you is the majority of our manufacturing will continue to be in China where we have a major advantage on the combination of cost, quality and speed. And so we take a global view when it comes to overall supply chain and like the progress we're making on the initiatives, including the progress we're making with lean in China.

我要告訴你的最後一件事是，我們的大部分製造業務將繼續在中國進行，我們在成本、質量和速度方面擁有重大優勢。因此，當談到整體供應鏈時，我們會放眼全球，並且喜歡我們在這些舉措上取得的進展，包括我們在中國的精益方面取得的進展。

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

我們的最後一個問題來自 Mark Astrachan 和 Stifel 的對話。

I guess, one, just a follow-up on the last line of questioning. Given the strength of the business at this point, maybe some sort of thoughts on cash use beyond the facility you're talking about. CapEx doesn't seem to be that elevated. So you're in a fairly good position at this point leverage-wise, so maybe talk a bit about what you can do there. And then more broadly, just innovation, you touched on it before. It's been a huge driver of growth in the business. I guess I'm curious, given how successful it's been, has it surprised you, and to the extent that it's driven growth? If so, kind of what were the takeaways from it? And how do you think about the ability to lap that? Meaning without giving us details of what's coming, what do you think about in terms of opportunities on a go-forward basis?

我想，第一，只是最後一行提問的後續。考慮到目前業務的實力，也許對您所談論的設施之外的現金使用有某種想法。資本支出似乎並沒有那麼高。因此，您目前在槓桿方面處於相當有利的位置，因此也許可以談談您可以在那裡做什麼。更廣泛地說，就是創新，您之前談到過。這是業務增長的巨大推動力。我想我很好奇，考慮到它的成功，它是否讓你感到驚訝，以及它在多大程度上推動了增長？如果是這樣，從中得到了什麼啟示？您如何看待這一能力？意思是，在沒有向我們提供即將發生的事情的詳細信息的情況下，您對未來的機會有何看法？

Yes. So I'll take the first one, Mark, on the cash use. So we really feel great about our cash position right now. We are able to fund our strategic imperatives, and we've talked about potentially pursuing strategic extensions over time. So I think when you are thinking about our cash use, those would be the areas that we would focus on. You've also seen us do modest repurchases, which you've seen in the last 2 quarters, and we'll continue to blend that in as it makes sense in the context of those strategic objectives.

是的。馬克，我將討論第一個關於現金使用的問題。因此，我們現在對我們的現金狀況感覺非常好。我們有能力為我們的戰略需求提供資金，並且我們已經討論過隨著時間的推移可能會尋求戰略擴展。因此，我認為當您考慮我們的現金使用時，這些將是我們關注的領域。您還看到我們進行了適度的回購，您在過去兩個季度中已經看到了這一點，我們將繼續將其融入其中，因為這在這些戰略目標的背景下有意義。

And then on your question on innovation, that has been a critical driver of our business for a very long time. I think one of our realizations last year when the business slowed was we had great innovation, but it was getting lost in all the other noise of the marketplace. So 1 of our key imperatives in stepping up our marketing activation spend in digital was really making sure we're putting enough emphasis on those items that most matter. So I think the biggest pivot we had is we still innovate with the products that consumers want at e.l.f. speed. The biggest pivot, though, was really making sure we're shining a light on those innovations that the consumer is particularly interested in. That was very much the case with Poreless Putty Primer and Camo Concealer. And I would say they still have a lot of life left in them. If you think about the very beginning of this year, we were supply-constrained on both those items. As we continue to activate, as customers get behind them, we continue to see them do quite well. Some of the more recent innovations I discussed on the call today also have quite a bit of room. And I'm really excited about the pipeline we have coming forward. So probably, the biggest opportunity, I would say, on innovation is beyond our proven capability of bringing the best of beauty and making it accessible for every eye, lip and face, is continuing to amplify those innovations and goes hand in hand with our shelf initiative with Project Unicorn where we can better highlight what are those innovations that we believe will be most important to consumers.

關於你關於創新的問題，長期以來，創新一直是我們業務的關鍵驅動力。我認為去年業務放緩時我們的認識之一是我們有偉大的創新，但它在市場的所有其他噪音中迷失了。因此，我們在增加數字營銷激活支出方面的關鍵任務之一是確保我們對那些最重要的項目給予足夠的重視。所以我認為我們最大的支點是我們仍然在 e.l.f. 消費者想要的產品上進行創新。速度。不過，最大的重點是確保我們重點關註消費者特別感興趣的那些創新。Poreless Putty Primer 和 Camo Concealer 的情況就是如此。我想說他們還有很多生命。如果你想想今年年初，我們在這兩個項目上的供應都受到限制。隨著我們繼續激活，隨著客戶的支持，我們繼續看到他們做得很好。我今天在電話會議上討論的一些最新創新也有相當大的空間。我對我們即將推出的管道感到非常興奮。因此，我想說，創新的最大機會可能超出了我們已證實的能力，即帶來最好的美麗並使每個眼睛、嘴唇和臉都能接觸到它，我們正在繼續擴大這些創新，並與我們的貨架齊頭並進。與獨角獸計劃合作，我們可以更好地強調我們認為對消費者最重要的創新。

We have reached the end of our question-and-answer session. I'd like to turn the call back over to Mr. Amin for any closing remarks.

我們的問答環節已經結束。我想將電話轉回給阿明先生，讓他作結束語。

Great. Well, thank you, everyone, for joining us. Over the next month or so, a number of members of our team are going to be investing -- attending investor events in San Francisco, New York and London. We hope to see you there. Thanks, everyone.

偉大的。好的，謝謝大家加入我們。在接下來的一個月左右的時間裡，我們團隊的一些成員將進行投資——參加在舊金山、紐約和倫敦舉行的投資者活動。我們希望看到你在那裡。感謝大家。

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

謝謝。今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與，祝您度過美好的一天。