1-800-Flowers.Com Inc (FLWS) 2024 Q2 法說會逐字稿

Good morning, everyone, and welcome to the 1-800-FLOWERS.COM fiscal 2024 second-quarter and year-end earning call. (Operator Instructions) Please also note today's event is being recorded.

大家早安，歡迎參加 1-800-FLOWERS.COM 2024 財年第二季和年終財報電話會議。（操作員說明）也請注意今天的活動正在錄製中。

I would now like to turn the conference over to Andy Milevoj, Senior Vice President, Investor Relations. Please go ahead.

我現在想將會議交給投資者關係高級副總裁安迪·米萊沃伊 (Andy Milevoj)。請繼續。

Good morning, and welcome to our fiscal 2024 second-quarter earnings call. Joining us today are Jim McCann, Chairman and CEO; Tom Hartnett, President; and Bill Shea, our CFO.

早安，歡迎參加我們的 2024 財年第二季財報電話會議。今天加入我們的是董事長兼執行長 Jim McCann；湯姆·哈內特，總裁；和我們的財務長比爾·謝伊（Bill Shea）。

Before we begin, I'd like to remind you that some of the statements we'll make on today's call are covered by the Safe Harbor disclaimer contained in our press release and public documents. During this call, we will make forward-looking statements with predictions, projections, and other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, including those contained in our press release and public filings with the Securities and Exchange Commission. The company disclaims any obligation to update any of the forward-looking statements that may be made or discussed during this call.

在我們開始之前，我想提醒您，我們將在今天的電話會議上發表的一些聲明包含在我們的新聞稿和公開文件中包含的安全港免責聲明中。在本次電話會議中，我們將做出前瞻性聲明，包括對未來事件的預測、預測和其他聲明。這些陳述基於當前的預期和假設，這些預期和假設存在風險和不確定性，包括我們的新聞稿和向美國證券交易委員會提交的公開文件中包含的風險和不確定性。本公司不承擔更新本次電話會議期間可能做出或討論的任何前瞻性陳述的義務。

Additionally, we will discuss certain supplemental financial measures that were not prepared in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures can be found in the tables of our earnings release.

此外，我們還將討論某些未依照公認會計準則制定的補充財務措施。這些非公認會計原則財務指標與最直接可比較的公認會計原則指標的對帳可以在我們的收益發布表中找到。

And now I'll turn the call over to Jim.

現在我將把電話轉給吉姆。

Thanks, Andy, and good morning, everyone. Thank you for joining us. This morning, I'll begin with a brief overview of our second-quarter performance and then turn it over to Tom who will provide a business update. We will conclude with financial review from Bill, and then we'll open the call for your questions.

謝謝安迪，大家早安。感謝您加入我們。今天早上，我將首先簡要概述我們第二季度的業績，然後將其交給湯姆，他將提供業務最新情況。我們將以比爾的財務審查作為結束，然後我們將開始電話詢問您的問題。

Heading into the second quarter, we expected our sales trends to improve, our gross profit margin recovery to continue, and our operating expenses to decline. Our performance was essentially in line with our expectations as our gross profit margin recovery and expense optimization efforts helped to offset what turned out to be a softer than anticipated consumer environment. Most notably, our gross profit margins expanded nicely. And as Bill will highlight further, our pace of margin recovery is happening at a good rate.

進入第二季度，我們預計銷售趨勢將改善，毛利率將繼續回升，營運費用將下降。我們的業績基本上符合我們的預期，因為我們的毛利率恢復和費用優化努力有助於抵消比預期更疲軟的消費者環境。最值得注意的是，我們的毛利率大幅增加。正如比爾將進一步強調的那樣，我們的利潤率恢復速度很快。

This was our fifth consecutive quarter of year-over-year margin expansion. And we are well on our path to returning to our historical mean annual gross margin rate in the low 40s percentage range. Our gross profit margin is benefiting from a combination of a reversion to the mean of certain commodity costs and our Work Smarter initiatives that are centered on operating more efficiently.

這是我們利潤率連續第五個季度年增。我們正在順利恢復到歷史平均年毛利率 40% 左右的水平。我們的毛利率受益於某些商品成本均值回歸和我們以更有效率運作為中心的「智慧工作」計畫的結合。

As Tom will highlight further, we are regularly evaluating opportunities to improve our top line through our relationship innovation initiatives. And this performance will only further be buoyed by the improvements we are seeing in our gross and operating margins.

正如湯姆將進一步強調的那樣，我們定期評估透過關係創新計畫提高收入的機會。我們看到毛利率和營業利潤率的改善只會進一步提振這種績效。

Before I ask Tom to provide the business update, I did want to take this opportunity to highlight a new organization that we are very proud to partner with this holiday season. As many of you know, Smile Farms is our signature philanthropic partner whose mission is to create meaningful work opportunities for people with disabilities. Their work generates purpose and pride and enhances life skills and fosters socialization.

在我請湯姆提供業務更新之前，我確實想藉此機會強調一個新組織，我們非常自豪能夠在這個假期期間與該組織合作。眾所周知，微笑農場是我們標誌性的慈善合作夥伴，其使命是為殘疾人創造有意義的工作機會。他們的工作產生了目標和自豪感，提高了生活技能並促進了社交。

This holiday season, we are proud to partner with another organization whose mission closely aligns with that of Smile Farms. During this past holiday season, we partnered with a nonprofit called the First Step Staffing to employ approximately 350 individuals in our Atlanta distribution facility. First Step Staffing is an organization that provides employment opportunities and resources to homeless individuals who want to re-enter the workforce and improve their lives. They not only provide employment opportunities, but they also provide additional support services such as providing transportation to and from work to position these individuals for success. They are a terrific organization that does a great work, and we are glad to be able to partner with them.

這個假期，我們很榮幸能與另一個組織合作，其使命與微笑農場的使命密切相關。在剛剛過去的假期期間，我們與一個名為 First Step Staffing 的非營利組織合作，在我們的亞特蘭大分銷設施中僱用了大約 350 名員工。First Step Staffing 是一個為想要重新進入勞動力市場並改善生活的無家可歸者提供就業機會和資源的組織。他們不僅提供就業機會，還提供額外的支援服務，例如提供往返工作的交通，幫助這些人取得成功。他們是一個出色的組織，做了出色的工作，我們很高興能夠與他們合作。

Now I'll turn the call over to Tom for the business update.

現在我將把電話轉給湯姆，以了解業務最新情況。

Thanks, Jim, and good morning, everyone. Today, I'll provide an update on our business performance as well as an update on our relationship innovation developments, which encompasses new or enhanced product offerings, our merchandising efforts, as well as user interface enhancements. During the second quarter, we generated $130.1 million in adjusted EBITDA as our Work Smarter efficiency initiatives, combined with improving macroeconomic factors contributed to a 230-basis-point improvement in our gross profit margin.

謝謝吉姆，大家早安。今天，我將提供有關我們業務績效的最新資訊以及我們關係創新發展的最新信息，其中包括新的或增強的產品供應、我們的銷售工作以及用戶界面的增強。第二季度，由於我們的「智慧工作」效率舉措，我們產生了 1.301 億美元的調整後 EBITDA，加上宏觀經濟因素的改善，使我們的毛利率提高了 230 個基點。

Our quarter-over-quarter revenue trends continue to improve. We encountered a softer consumer environment, especially amongst our lower income-tier customers. As lower income customers continue to be most impacted by the macroeconomic pressures, we continue to see this customer cohort reduced purchases the most. Conversely, AOV increased approximately 3% as our upper income customers continued to represent a greater portion of our overall population, and they continue to gravitate towards our higher priced bundle products that provide a great gift and value.

我們的季度環比收入趨勢持續改善。我們遇到了疲軟的消費環境，尤其是低收入層客戶。由於低收入客戶繼續受到宏觀經濟壓力的影響最大，我們繼續看到該客戶群的購買量減少最多。相反，AOV 增加了約 3%，因為我們的高收入客戶繼續占我們總人口的更大比例，並且他們繼續傾向於我們提供優質禮物和價值的更高價格的捆綁產品。

During the first half of our fiscal year, we have been prudent with our marketing spend in a challenging consumer environment in which we didn't see an adequate return on investment. As Jim mentioned, under our relationship innovation efforts, we are regularly evaluating our offerings, pricing, and bundling opportunities to ensure we have appropriate price points for each of our customer segments, and we are actively managing the pricing elasticity of our product portfolio.

在我們的上半財年，在充滿挑戰的消費者環境中，我們一直對行銷支出持謹慎態度，在這種環境中我們沒有看到足夠的投資回報。正如吉姆所提到的，在我們的關係創新努力下，我們定期評估我們的產品、定價和捆綁機會，以確保我們為每個客戶群提供適當的價格點，並且我們正在積極管理我們產品組合的定價彈性。

Our focus on the customer journey, providing thoughtful gifting options, and having the appropriate pricing at all ends of the spectrum from value to luxury has never been greater. During the second quarter, we introduced lower price points and emphasize gifts that are in our lower price ranges to attract customers who may be more price-sensitive. This includes providing new value offerings such as our Flowers & Feels collection at 1-800-Flowers that features custom-crafted bouquets that match an array of sentiments and provide great value beginning at $39.99.

我們對客戶旅程的關注從未如此強烈，提供貼心的禮品選擇，並在從價值到奢華的各個方面提供適當的定價。在第二季度，我們引入了較低的價格點，並強調較低價格範圍內的禮品，以吸引對價格更敏感的客戶。這包括提供新的超值產品，例如 1-800-Flowers 的 Flowers & Feels 系列，其特色是定制花束，可滿足各種情感需求，並提供超值的起價 39.99 美元。

And we continue to lean into new products and bundling offerings for customers who are looking to wow their recipients. Bundles allow us to feature products from our different brands and conveniently ship them to the recipient in the same package. This is also a great way to introduce our customers to our family of brands and give us a competitive advantage by marketing these bundles across multiple brand websites. These gift bundles provide great value to our customers, and we continue to see customers trade up in price points for these wonderful gifts.

我們繼續致力於為那些希望讓收件人驚嘆不已的客戶提供新產品和捆綁產品。捆綁包使我們能夠展示不同品牌的產品，並透過同一包裹方便地將它們運送給收件人。這也是向我們的客戶介紹我們的品牌系列的好方法，並透過在多個品牌網站上行銷這些捆綁包來為我們提供競爭優勢。這些禮品套裝為我們的客戶提供了巨大的價值，我們不斷看到客戶為這些精美的禮品提高價格。

As an example, we leveraged Personalization Mall to launch a set of food gifts with a personalized item such as our Harry & David Charcuterie gift bundled with a personalized maple cutting board. This program was launched as a test, and it has exceeded our expectations. We believe there's a lot of opportunity here, and it once again demonstrates how our brands can complement one another and give our customers an elevated experience compared to others in the market.

例如，我們利用個人化商城推出了一套帶有個人化物品的食品禮品，例如與個性化楓木切板捆綁在一起的 Harry & David Charcuterie 禮品。這個程式是作為測試而推出的，它超出了我們的預期。我們相信這裡有很多機會，它再次證明了我們的品牌如何能夠相互補充，並為我們的客戶提供比市場上其他品牌更高的體驗。

As we look ahead to Valentine's Day, this year we have a slightly better day placement than we had a year ago as it's midweek and a few days past the Super Bowl, which should be favorable to us. We are excited about our new trio bundle that features our one 1-800-Flowers roses, Harry & David wine, and Shari's Berries to create a magnificent gift. This trio bundle combines gifts from three of our brands and ships them in a single box that can be delivered overnight. They sure will provide an extraordinary experience for the recipient and is a great last-minute gift idea.

當我們展望情人節時，今年我們的日子安排比一年前稍好一些，因為它是在周中，距離超級碗比賽還有幾天，這對我們來說應該是有利的。我們對新的三件套裝感到非常興奮，其中包含一朵 1-800 朵玫瑰、Harry & David 葡萄酒和 Shari's 漿果，打造出精美的禮物。這個三件套裝組合包結合了我們三個品牌的禮物，並將它們裝在一個盒子裡，可以隔夜送達。它們肯定會為收件人提供非凡的體驗，並且是最後一刻的絕佳禮物創意。

Through our Gift and More marketplace which features curated items from local sellers, we can offer customers a broader assortment of gifts across a number of categories including jewelry, spa, gardening, and home decor to name a few. Finding customers with a variety of gifting options is a core strength of ours, and we have an amazing family of brands and products that we can leverage to help our customers express every sentiment.

透過我們的 Gift and More 市場，其中包含來自當地賣家的精選商品，我們可以為客戶提供更廣泛的禮品種類，涉及多個類別，包括珠寶、水療、園藝和家居裝飾等。尋找具有多種禮品選擇的客戶是我們的核心優勢，我們擁有一系列令人驚嘆的品牌和產品，我們可以利用它們來幫助客戶表達每種情感。

Now I'll turn it over to Bill to provide the financial review.

現在我將把它交給比爾提供財務審查。

Thanks, Tom, and good morning, everyone. As Jim and Tom highlighted, we continue to see significant improvements in our gross profit margin, staying steadfast in our Work Smarter initiatives with a focus on operating more efficiently through the use of technology and automation that also includes our logistics, labor, and inventory optimization efforts. This enabled us to offset what turned out to be a softer than expected second quarter topline performance.

謝謝，湯姆，大家早安。正如吉姆和湯姆所強調的那樣，我們繼續看到毛利率顯著提高，堅定不移地實施「智慧工作」計劃，重點是透過使用技術和自動化（其中還包括我們的物流、勞動力和庫存優化）來提高營運效率努力。這使我們能夠抵消第二季營收表現低於預期的影響。

Going into the second quarter, we expected the consumer environment for discretionary spending to remain pressured but to improve as compared to the past few quarters. Quarter-over-quarter sales trends did improve with our total revenue declining 8.4% and our e-commerce revenue declining 6.6%. But we had anticipated the pace of improvement to occur at a faster rate. Our gross margin improvement helped offset the softer top line. The pace of improvement is better than we anticipated.

進入第二季度，我們預計可自由支配支出的消費環境仍將面臨壓力，但與過去幾季相比將有所改善。環比銷售趨勢確實有所改善，我們的總收入下降了 8.4%，電子商務收入下降了 6.6%。但我們預計改進的速度會更快。我們的毛利率改善有助於抵銷營收疲軟的影響。改進的速度比我們預期的還要好。

Second-quarter gross margin improved 230 basis points to 43.3%, and this was on top of the 90 basis points improvement a year ago. This represents our fifth consecutive quarter of year-over-year improvement. As you said, we are well on our path to returning to our historical gross profit margin rate, and by the end of this fiscal year, we now expect to be at approximately 40%.

第二季毛利率提高了 230 個基點，達到 43.3%，而一年前則提高了 90 個基點。這代表我們連續第五個季度實現年比改善。正如您所說，我們正在努力恢復歷史毛利率，到本財年末，我們預計毛利率將達到 40% 左右。

Our gross margin benefited from lower inbound freight costs, a decline in certain commodity costs, lower labor costs, and our Work Smarter initiatives for driving operational efficiencies. A great example of these efficiencies is in the labor savings we've been able to produce through our automation efforts. Our main distribution facilities in Medford (inaudible) and Atlanta are all in their second or third year of automation, and we continue to achieve further productivity gains, reduced the labor cost per package at these facilities by approximately 4% for the month of December and the first half of the current fiscal year as compared to a year ago.

我們的毛利率得益於入境貨運成本的降低、某些商品成本的下降、勞動力成本的降低以及我們旨在提高營運效率的「智慧工作」計畫。這些效率的一個很好的例子是我們透過自動化工作節省了勞動力。我們在梅德福（聽不清楚）和亞特蘭大的主要配送設施均已進入自動化的第二年或第三年，我們繼續進一步提高生產力，將這些設施的每個包裹的勞動力成本在12 月份降低了約4%，本財年上半年與上年同期相比。

Additionally, due to our inventory optimization efforts, our inventory levels were in good shape heading into and out of the holiday season leading to fewer inventory write-offs. We also had a helping hand from Mother Nature who provided us with good weather this holiday season, leading to fewer shipping delays and related customer credits. These factors helped to offset a more promotional environment as well as a new fuel shipping surcharge that was introduced later in the holiday period.

此外，由於我們的庫存優化工作，我們的庫存水準在假期前後都保持良好狀態，從而減少了庫存沖銷。我們也得到了大自然的幫助，她在這個假期為我們提供了好天氣，從而減少了運輸延誤和相關的客戶信用。這些因素有助於抵消更多的促銷環境以及假期後期推出的新燃油運輸附加費。

We also continued to optimize expenses. And excluding the impairment charge and the accounting impact of the nonqualified compensation plan on our P&L, we reduced our operating expenses by $10.8 million as compared to a year ago. As a result of these factors, our second quarter adjusted EBITDA was $130.1 million as compared to $131.4 million in the prior year.

我們也繼續優化費用。排除減損費用以及不合格薪酬計畫對我們損益表的會計影響，我們的營運費用比一年前減少了 1,080 萬美元。由於這些因素，我們第二季調整後的 EBITDA 為 1.301 億美元，而上一年為 1.314 億美元。

Before we review net income for the quarter, I want to address the noncash impairment charge we took in the consumer flow and gifts group segment related to the Personalization Mall trademark. As many of you know, we periodically review the value of our intangible assets. Our revenue forecast for Personalization Mall combined with a higher discount rate resulting from the high interest rate environment required us to reevaluate the value of the intangibles on our balance sheet. Consequently, we recorded a $19.8 million noncash impairment charge for our Personalization Mall business during the quarter.

在我們審查本季的淨利潤之前，我想先討論一下我們在與個人化購物中心商標相關的消費者流量和禮品組部分中承擔的非現金減損費用。眾所周知，我們會定期檢視無形資產的價值。我們對個人化購物中心的收入預測加上高利率環境導致的較高折扣率，要求我們重新評估資產負債表上無形資產的價值。因此，本季我們的個人化購物中心業務記錄了 1,980 萬美元的非現金減損費用。

Net income for the quarter was $62.9 million or $0.97 per share including the noncash impairment charge of $19.8 million or $0.30 per share. Adjusted net income was $82.7 million or $1.27 per share compared with adjusted net income at $82.7 million or $1.28 per share in the prior-year period.

本季淨利潤為 6,290 萬美元，即每股 0.97 美元，其中包括 1,980 萬美元，即每股 0.30 美元的非現金減損費用。調整後淨利為 8,270 萬美元，即每股 1.27 美元，而去年同期調整後淨利為 8,270 萬美元，即每股 1.28 美元。

Let's review segment results. Our gourmet food and gift basket segment revenues declined 8.2% to $540 million compared with $588.4 million in the prior-year period. Contributed to this decline was our wholesale business which declined $18.7 million as several retailers had reduced their orders last spring for the holiday season in light of the consumer environment. This segment's gross profit margin expanded 220 basis points to 43.2% compared with 41% in the prior-year period, benefiting from lower freight costs, a decline in certain commodity costs, lower labor costs, and low inventory write-offs. Segment contribution margin declined $5.4 million to $118.2 million with segment contribution margin of $123.5 million in the prior-year period, primarily due to the revenue decline.

讓我們回顧一下分段結果。我們的美食和禮品籃部門收入下降 8.2%，至 5.4 億美元，而去年同期為 5.884 億美元。導致這一下降的原因是我們的批發業務下降了 1,870 萬美元，因為考慮到消費環境，去年春天多家零售商減少了假期季節的訂單。該部門的毛利率從去年同期的41%擴大220個基點至43.2%，受益於貨運成本下降、某些商品成本下降、勞動成本下降以及庫存沖銷較低。部門邊際貢獻率下降了 540 萬美元，至 1.182 億美元，去年同期部門邊際貢獻率為 1.235 億美元，主要是因為收入下降。

In our consumer flow and gift segment, revenues decreased 8% to $254.8 million compared with $277 million a year ago. Profit margin expanded 230 basis points to 42.8% compared with 40.5% in the prior-year period, improving on lower freight and labor costs. Segment contribution margin, excluding the impairment charge, was $30.4 million compared with segment contribution margin of $27.9 million in the prior-year period.

在我們的消費流量和禮品領域，營收下降 8% 至 2.548 億美元，去年同期為 2.77 億美元。由於運費和勞動成本下降，利潤率從去年同期的 40.5% 擴大了 230 個基點，達到 42.8%。不包括減損費用的部門邊際貢獻為 3,040 萬美元，而去年同期的部門邊際貢獻為 2,790 萬美元。

In our BloomNet segment. Revenues for the quarter decreased 17.1% to $27.2 million. Revenues were impacted by the lower order volume processed by BloomNet which included the expected decline in orders by one of our business partners following their merger with a competitor.

在我們的 BloomNet 部分。該季度營收下降 17.1% 至 2,720 萬美元。BloomNet 處理的訂單量減少影響了收入，其中包括我們的一位業務合作夥伴與競爭對手合併後預計訂單量下降。

Gross profit margin was 47.6% compared with 42.2% in the prior-year period, primarily reflecting lower freight cost as well as product mix. Segment contribution margin was $9.1 million compared with $9.3 million in the prior-year period.

毛利率為 47.6%，而去年同期為 42.2%，主要反映了貨運成本和產品組合的下降。部門邊際貢獻 910 萬美元，上年同期為 930 萬美元。

Turning to our balance sheet. Our cash and investment position was $312 million at the end of the second quarter. Inventory declined to $161.3 million from an inventory of $201.1 million at the end of last year's second quarter.

轉向我們的資產負債表。截至第二季末，我們的現金和投資部位為 3.12 億美元。庫存從去年第二季末的 2.011 億美元下降至 1.613 億美元。

In terms of debt, we had $195 million in term debt, and no borrowings under our revolving credit facility. As a result, our net cash was $117 million compared with $34.7 million at the end of last year's second quarter. During the quarter, we entered into a 10b5-1 stock repurchase plan and repurchased $5.4 million of our stock under this plan as of last Friday. This amounts to approximately 550,000 shares that we repurchased at an average cost of $9.73 per share.

在債務方面，我們有 1.95 億美元的定期債務，並且我們的循環信貸安排下沒有借款。結果，我們的淨現金為 1.17 億美元，而去年第二季末為 3,470 萬美元。本季度，我們制定了 10b5-1 股票回購計劃，截至上週五根據該計劃回購了 540 萬美元的股票。我們以每股 9.73 美元的平均成本回購了約 550,000 股股票。

Let's turn to our guidance. We are lowering our fiscal 2024 revenue guidance while maintaining our adjusted EBITDA guidance as we expect our gross margin improvement combined with our expense optimization efforts to offset the softer revenue outlook. Fiscal 2024, we now expect total revenues on a percentage basis to decline in the 7% to 9% range as compared with the prior year. We are affirming our adjusted EBITDA guidance to be in the range of $95 million to $100 million, and our free cash flow to be in the range of $60 million to $65 million.

讓我們轉向我們的指引。我們正在降低 2024 財年收入指引，同時維持調整後的 EBITDA 指引，因為我們預期毛利率的改善加上我們的費用優化工作將抵消收入前景疲軟的影響。到 2024 財年，我們現在預計總收入將比前一年下降 7% 至 9%。我們確認調整後的 EBITDA 指引範圍為 9,500 萬美元至 1 億美元，自由現金流範圍為 6,000 萬美元至 6,500 萬美元。

Now I'll turn the call back to Jim for his closing comments before we open it up for Q&A.

現在，在我們開始問答之前，我將把電話轉回給吉姆，聽取他的結束語。

Thanks, Bill. As we look back on the first half of the year and forward to the second half, our quarter-over-quarter sales trends continue to move in the right direction, albeit at a slower pace. We expect this to be offset by the gross profit margin recovery which is now occurring at a faster pace than we expected. Combined with our Relationship Innovation and Work Smarter initiatives, we are having a clear and direct impact on our business. We expect these factors to further fuel outperformance in a broader consumer discretionary environment improves. While it's difficult to predict when the consumer environment and in particular for the lower-income consumer is going to become more favorable, we believe our results will only be further buoyed by our relationship innovation and work smarter initiatives that are evergreen and well underway.

謝謝，比爾。當我們回顧上半年並展望下半年時，我們的季度環比銷售趨勢繼續朝著正確的方向發展，儘管速度有所放緩。我們預計這將被毛利率的恢復所抵消，毛利率的恢復速度目前快於我們的預期。結合我們的關係創新和智慧工作計劃，我們正在對我們的業務產生明顯而直接的影響。我們預計這些因素將在更廣泛的非必需消費品環境中進一步推動績效的改善。雖然很難預測消費環境，特別是對低收入消費者的環境何時會變得更加有利，但我們相信，我們的關係創新和智慧工作計劃將只會因長期有效且正在進行中的關係創新和更明智的工作計劃而進一步提振。

Now before I open the call to your questions, a public service announcement. The Valentine holiday is only a couple of weeks away, and we suggest you place your orders for all those special people in your life today.

現在，在我開始回答大家的問題之前，先發布一則公共服務公告。距離情人節假期只有幾週了，我們建議您今天為您生活中所有特別的人下訂單。

Now with your questions.

現在回答你的問題。

Thank you. We will now begin the question-and-answer session. (Operator Instructions)

謝謝。我們現在開始問答環節。（操作員說明）

Anthony Lebiedzinski, Sidoti & Co.

萊別津斯基 (Anthony Lebiedzinski)，Sidoti & Co.

This is Alex on for Anthony. My first question is regarding the Celebrations Passport members. Could you share a little bit more about the spending of those members during the holiday season versus non-members and give a little bit of color around Passport membership and order frequency and whether that changed much from the prior year?

這是亞歷克斯替補安東尼。我的第一個問題是關於慶典護照會員的。您能否多分享一下這些會員在節日期間與非會員相比的支出情況，並就 Passport 會員資格和訂單頻率以及與前一年相比是否有很大變化提供一些說明？

Good morning, Alex. This is Jim. Too bad Anthony isn't here. That was the best pronunciation of his name we've heard so far, and he missed it. But to your question, Alex, Tom will give you the details on your question. But I would say overall, the Passport customers are behaving as it has and as it continues now for quite a number of years.

早安，亞歷克斯。這是吉姆。可惜安東尼不在。這是迄今為止我們聽過的他名字的最佳發音，但他錯過了。但對於你的問題，亞歷克斯，湯姆會向你提供有關你的問題的詳細資訊。但我想說的是，總體而言，Passport 客戶的行為一直是如此，而且多年來一直如此。

I think you'll hear later on that we have a lot of programmatic plans to enhance the Passport program. It's gradually moving from just a free shipping capability to now a loyalty program special offers. So this is a special group of people, and we're trying to treat them in a special way that we should. So we have a stream of programs that you'll see introduced throughout the course of this year.

我想您稍後會聽說我們有很多計劃來增強護照計劃。它逐漸從免費送貨功能轉變為現在的忠誠度計劃特別優惠。所以這是一群特殊的人，我們正在努力以我們應該的特殊方式對待他們。因此，我們將在今年推出一系列計劃。

But Tom, as to the specifics of Alex's question, spending patterns of --

但湯姆，關於亞歷克斯問題的具體細節，消費模式--

So trend lines year over year are the same as a year ago. We continue to see the Passport customer purchasing two to three times more than our average customer, so all those signs continue to move in the same direction.

因此，逐年趨勢線與一年前相同。我們繼續看到 Passport 客戶的購買量是普通客戶的兩到三倍，因此所有這些跡象繼續朝同一方向發展。

And the Passport customer represents about 20% of our revenues.

Passport 客戶約占我們收入的 20%。

Right.

正確的。

Appreciate the color. And then I think you commented that commodity costs are normalizing to the mean, curious about one other cost regarding ocean freight given some of the Houthi attacks in the Red Sea. Are you seeing any significant freight cost increases?

欣賞顏色。然後我認為您評論說商品成本正在正常化，考慮到紅海胡塞武裝的一些襲擊，您對海運方面的另一項成本感到好奇。您是否發現貨運成本顯著增加？

Alex, Bill will give you the color on that but who would have thought a year ago that we'd be talking about Houthis? But we are, and we're anticipating some impact, but we haven't yet. Bill, specifically what's going on with the ocean freight costs?

亞歷克斯，比爾會給你顏色，但一年前誰會想到我們會談論胡塞武裝？但我們確實如此，我們預計會產生一些影響，但目前還沒有。比爾，具體來說，海運費是怎麼回事？

Yeah. Due to the attacks in the Red Sea, certainly the spot markets have jumped up pretty dramatically on ocean freight. We have contracted rates that basically carry us through the end of the fiscal year. And so far, that carries on those rates. The bigger unknown is how long the issues in the Red Sea persist and whether that affects future negotiations and next year's holiday season. We begin negotiations for those rates in a few months and a lot will depend on what happens.

是的。由於紅海的攻擊，現貨市場的海運價格肯定大幅上漲。我們的合約利率基本上可以支撐我們度過本財年結束。到目前為止，這些利率仍在繼續。更大的未知數是紅海問題會持續多久，以及這是否會影響未來的談判和明年的假期。我們將在幾個月後開始就這些費率進行談判，這很大程度上取決於發生的情況。

So Alex, overall color on that, too, is like so many companies that are US based, we're taking the steps we can longer range to lessen our dependency for those commodity items that we do import so that we can source them domestically. I think pretty much every company in the US has started a program like that, and we'll continue to pursue that. But if the tensions in the Red Sea area continue into the summertime, we would anticipate that they would have an impact on our holiday imports that primarily arrive in the summertime. But as Bill said, through the end of the fiscal year to June fiscal year end, we don't anticipate a hit.

因此，亞歷克斯，總體而言，就像許多總部位於美國的公司一樣，我們正在採取更長期的措施，以減少我們對進口商品的依賴，以便我們可以在國內採購它們。我認為幾乎所有美國公司都啟動了類似的計劃，我們將繼續推行這項計劃。但如果紅海地區的緊張局勢持續到夏季，我們預計它們將對我們主要在夏季抵達的假日進口產生影響。但正如比爾所說，從本財年結束到六月財年結束，我們預計不會受到打擊。

Appreciate the color there. And last question for me, curious how you guys are thinking about acquisition opportunities for '24, '25?

欣賞那裡的顏色。我的最後一個問題是，好奇你們如何考慮 '24、'25 的收購機會？

Well, I'd say we're always in the market looking to see if there's a way that we can flesh out the offerings we have for our customers or find a service that would be beneficial to our service offerings, suite of service offerings we have for our customers. And the third area that we look for acquisitions to help us is with talent acquisitions. I would say there's a lot available right now because I think the cost of capital, which has changed so dramatically in the last 12 months, 24 months, has really put the hurt on so many companies.

好吧，我想說，我們總是在市場上尋找是否有一種方法可以充實我們為客戶提供的產品或找到對我們的服務產品、我們的服務產品套件有利的服務。為我們的客戶提供。我們尋求收購來幫助我們的第三個領域是人才收購。我想說現在有很多可用的資源，因為我認為過去 12 個月、24 個月資本成本發生瞭如此巨大的變化，確實給很多公司帶來了傷害。

So there's lots available, but we're being very judicious about what we look at and really being disciplined about does it genuinely help us? Does it genuinely make us a better company? Does it improve our service offering for our customers? So we're active. There's a lot available, but I wouldn't expect that we're going to be doing anything too dramatic.

所以有很多可用的東西，但我們對我們所關注的內容非常明智，並且真正嚴格遵守它是否真的對我們有幫助？它真的能讓我們成為更好的公司嗎？它是否改善了我們為客戶提供的服務？所以我們很活躍。有很多可用的東西，但我不認為我們會做任何太戲劇性的事情。

Appreciate all the context there. Thanks for taking questions.

欣賞那裡的所有背景。感謝您提出問題。

Michael Kupinski, Noble Capital Markets.

邁克爾·庫平斯基（Michael Kupinski），諾布爾資本市場。

Thank you for taking my questions, a couple of them. Can you talk about -- maybe I'm going to parse the commodity price opportunity there, can you talk about how commodity prices and where they are relative to the mean in terms of maybe a percent, so kind of give us a sense of what are the opportunities left yet from where we are right now in terms of commodity prices relative to the means?

感謝您提出我的問題，其中有幾個。你能談談——也許我要解析那裡的商品價格機會，你能談談商品價格如何以及它們相對於平均值的百分比，這樣可以讓我們了解一下什麼嗎？就商品價格相對於手段而言，我們現在的處境是否還剩下機會？

Well, I would say -- This is Jim. Michael, I would say, two years ago, it was a peak in terms of how we got hit with commodity prices. It started, of course, with fuel when it went to well over $100 a barrel surcharges. Bill already mentioned that we did have a surcharge hit that came at the very beginning of December this year that cost us a few million dollars this year.

好吧，我會說——這是吉姆。邁克爾，我想說，兩年前，這是我們受到大宗商品價格打擊的高峰。當然，首先是燃油附加費遠高於每桶 100 美元。Bill 已經提到，我們確實在今年 12 月初遭遇了附加費打擊，導致我們今年損失了幾百萬美元。

The other commodities that are important to us, we bake a lot. We prepare a lot of food. So butter, flour, eggs are all commodities that we use a lot of. Bill, where would you say we are in that? I know we're not back to the 2019 kind of levels where -- labor, by the way, is one. It's not a a commodity, but it's a cost ingredient, and that's not going to come back. Whatever we did in terms of increases are going to stay. But the pressure there is alleviating. Where are we on actual commodities now, Bill?

對於我們來說很重要的其他商品，我們烘烤了很多。我們準備了很多食物。所以奶油、麵粉、雞蛋都是我們大量使用的商品。比爾，你覺得我們處於什麼位置？我知道我們還沒有回到 2019 年的水平，順便說一句，勞動力就是其中之一。它不是一種商品，但它是一種成本成分，而且不會再回來。無論我們在成長方面做了什麼，都將繼續下去。但那裡的壓力正在減輕。比爾，我們現在對實際商品的了解如何？

Yeah, it's split. There's certain commodities, you mentioned butter and eggs, those are certainly back to more of their historical means. But there are others like sugar and cocoa that is still very. I think you can take a step back, from a gross margin standpoint, we're actually exceeding where our expectations were. We're up 230 basis points for the quarter, up 280 basis points year to date, first two quarters of the year.

是的，已經分開了。有一些商品，你提到的黃油和雞蛋，這些肯定會更多地回歸到它們的歷史意義。但還有其他一些東西，例如糖和可可，仍然很重要。我認為你可以退一步，從毛利率的角度來看，我們實際上超出了我們的預期。本季我們上漲了 230 個基點，今年前兩個季度迄今，我們上漲了 280 個基點。

You kind of split those gains into almost two buckets, the kind of -- some of the macro items, ocean freight some of those commodity costs that you mentioned. Labor availability and having labor availability just gives us a lot of flexibility, so allows automation efforts, operational efficiencies, our logistics initiatives. Our inventory planning, inventory both in and out of the quarter was that the profitable levels that we needed to be at, which led to less inventory (inaudible)

您將這些收益分成幾乎兩個部分，即一些宏觀項目、海運以及您提到的一些商品成本。勞動力的可用性和擁有勞動力的可用性為我們帶來了巨大的靈活性，因此可以實現自動化工作、營運效率和我們的物流計劃。我們的庫存計劃、季度內和季度外的庫存都是我們需要達到的盈利水平，這導致庫存減少（聽不清楚）

But last year, on the inventory side, like so many companies, we inventoried up because of the logistic challenges. So we were sure we had the product. This year, we didn't have to buy so much so early.

但去年，在庫存方面，像許多公司一樣，由於物流方面的挑戰，我們增加了庫存。所以我們確信我們擁有該產品。今年，我們不用這麼早就買那麼多了。

That's right. So again, as a result of maybe some of the macro trends and the global supply chain being more secure time, us being able to manage inventory at the appropriate level which led to less inventory write-offs. We had to improve the margin. So really a combination of both macro and our internal Work Smarter initiatives that we have.

這是正確的。同樣，由於某些宏觀趨勢和全球供應鏈變得更加安全，我們能夠將庫存管理在適當的水平，從而減少庫存沖銷。我們必須提高利潤率。所以這其實是宏觀和我們內在的「智慧工作」計畫的結合。

So overall, commodity costs are still higher than the mean we talked about but have been improving.

因此總體而言，商品成本仍然高於我們討論的平均值，但一直在改善。

That's correct. Certain certain components of commodity costs have come back to the mean, but others are still at very high levels.

這是正確的。大宗商品成本的某些組成部分已回到平均水平，但其他組成部分仍處於非常高的水平。

Okay. And when do we begin to comp against the substantial portion of the Work Smarter initiatives you implemented.

好的。我們什麼時候開始與您實施的「智慧工作」計畫的大部分進行比較。

First of all, it is an ongoing effort. So we continue to add to that. But certainly -- an example is our automation efforts where in many of our distribution facilities, we're now in the second year and in one facility we're in the third year of those automation efforts, yet our labor efficiencies are down and our labor cost per package are down like 4% this year over last year.

首先，這是一個持續的努力。所以我們繼續補充這一點。但當然- 一個例子是我們的自動化工作，在我們的許多配電設施中，我們現在處於第二年，在一個設施中，我們處於這些自動化工作的第三年，但我們的勞動效率下降了，我們的今年每個包裹的勞動成本比去年下降了約 4%。

Our efficiencies are up, labor efficiencies are up. But our labor cost average are down because of the automation.

我們的效率提高了，勞動效率也提高了。但由於自動化，我們的平均勞動成本下降了。

Exactly right.

非常正確。

And we'll continue, Michael, with those automation efforts. So as Bill mentioned, we're in the third and/or second depending on the facility, and we're implementing new programs on top of that now.

邁克爾，我們將繼續進行這些自動化工作。正如比爾所提到的，我們處於第三和/或第二，取決於設施，我們現在正在此基礎上實施新計劃。

So this is an ongoing effort, Michael, and we think we're going to continue to get savings into the future.

所以這是一項持續的努力，邁克爾，我們認為我們將繼續為未來節省開支。

Got you. And then can you talk a little bit about Personalization Mall in terms of its performance and how you are looking at Personalization Mall for the balance of this year and what expectations you might have there?

明白你了。然後您能談談個性化商城的表現嗎？您如何看待個性化商城今年的剩餘時間以及您對個性化商城的期望是什麼？

There are combination of things that have happened with Personalization Mall. Tom will give you the full color on that.

個性化商城發生了很多事。湯姆會給你完整的資訊。

Yeah, Michael. The Personalization Mall business was roughly in line with the segment, maybe a little bit better performance than than the segment for the quarter. And we're expecting, just like our other segments, that the rate of -- the sales trending for the second half of the year will be in a better direction than they were in the first half of the year.

是的，邁克爾。個人化商城業務與該細分市場大致持平，本季的業績可能比該細分市場稍好。就像我們的其他部門一樣，我們預計下半年的銷售趨勢將比上半年更好。

The pilot program being introduced there in Personalization Mall is we launched the other day rechristened IP around Things Remembered. So that's a new brand with a new product line and a different range of product -- that brand is a well-known brand, and it gives us the opportunity to be in a broader range of products. So we have a higher price points, really fancy items, like the vase we have, the -- Please tell Michael about that.

個人化商城推出的試點計畫是我們前幾天推出的圍繞「記住的事情」重新命名的 IP。所以這是一個擁有新產品線和不同產品範圍的新品牌——該品牌是一個知名品牌，它讓我們有機會涉足更廣泛的產品範圍。所以我們有更高的價位，非常精美的物品，像是我們的花瓶——請告訴麥可這一點。

Yeah. So that's one of our better sellers every day. The vase, I think, retails for over $150. Obviously, it's personalized, and it's a wonderful beautiful item. So our AOVs, and again we're just kind of getting started there because when we acquired the IP, it's taking us some time to build up the inventory and their best sellers. So we got to a portion of that this holiday season.

是的。所以這是我們每天最暢銷的產品之一。我認為這個花瓶的零售價超過 150 美元。顯然，它是個人化的，而且是一件非常漂亮的物品。所以我們的 AOV，我們才剛開始，因為當我們獲得 IP 時，我們需要一些時間來建立庫存和暢銷產品。所以我們在這個假期得到了其中的一部分。

But the average ticket is 175 basis points higher or 175 times in the Personalization Mall AOV. So good price point, great gifts in dealing and addressing a different cohort of customers than what would be weddings or retirements or special moments in people's lives.

但平均票價高出 175 個基點，即個人化商城 AOV 的 175 倍。如此優惠的價格，是與不同客戶群打交道和致辭的絕佳禮物，而不是婚禮、退休或人們生活中的特殊時刻。

But all leveraging off the same fixed cost, same fixed facility that we have there in Personalization Mall, Michael.

但所有這些都利用了我們在個性化購物中心擁有的相同的固定成本和固定設施，邁克爾。

One last question, if you don't mind. In terms of your revenue guidance for the year, what expectations are baked into your guidance in terms of like the general economy? Can you give us some sense of what those expectations are?

最後一個問題，如果你不介意的話。就您今年的收入指導而言，您對總體經濟等方面的預期有何期望？您能否讓我們了解一下這些期望是什麼？

Michael, we revised our revenue guidance. It could be down 7% to 9%. With the first half of the year, you'll be down around 9%, so implying a slightly better trend into the second half of the year. I think we've modified our guidance. I think at the beginning of the year, we were hopeful that the improvements that we're seeing would be even more accelerated, both to the second quarter and into the second half of the year. So it is improving at a slower pace than what we originally anticipated, and that is tied to the macro environment not being as robust as we hoped it would be.

邁克爾，我們修改了收入指引。可能會下降 7% 至 9%。今年上半年，您將下降約 9%，這意味著下半年的趨勢會稍微好一點。我認為我們已經修改了指導方針。我認為在今年年初，我們希望我們所看到的改善能更加加速，無論是到第二季還是下半年。因此，它的改善速度比我們最初預期的要慢，這與宏觀環境不如我們希望的那樣強勁有關。

So baked into that as the trend continues to improve, just not at the pace we were hoping.

隨著趨勢的持續改善，我們已經融入了這一點，只是沒有達到我們希望的速度。

Got you. Okay, that's all I have.

明白你了。好吧，我只有這麼多了。

Linda Bolton Weiser, D.A. Davidson.

琳達·博爾頓·韋瑟，D.A.戴維森。

So I was wondering just your comments about the consumer environment. I mean, consumer sentiment, Michigan Consumer Sentiment has been below 70 now for like two years. So it just seems like we're stuck in this low consumer sentiment thing which is not good for your business obviously. But if it does persist, let's say for another year, what would you do different in your business?

所以我想知道您對消費環境的評論。我的意思是，消費者信心，密西根消費者信心已經兩年低於 70 了。因此，我們似乎陷入了消費者信心低迷的困境，這顯然對您的業務不利。但如果這種情況確實持續存在，假設再持續一年，您的業務會採取哪些不同的做法？

Is there anything additional you could do in terms of cost structure, or like how would you think about things if this just continued on like this with revenue declines like this for another year? How would you think about -- what would you think about doing differently?

在成本結構方面您還有什麼可以做的嗎？或者如果這種情況繼續下去，收入又像這樣下降一年，您會如何考慮？您會如何考慮—您會如何考慮採取不同的做法？

Well, thanks for your question, Linda. We missed you the last quarter, really good question, and one we've talked a lot about over the last month or two. And the answer is a couple of things. One is, we're still recovering from the the COVID bounce that so many of our e-commerce kinds of companies like us experienced. So we're still in that back end of the wave of that.

好吧，謝謝你的問題，琳達。上個季度我們很想念您，這是一個非常好的問題，在過去一兩個月我們已經談論了很多。答案有幾件事。一是，我們仍在從新冠疫情的反彈中恢復過來，像我們這樣的許多電子商務類型的公司都經歷過這種情況。所以我們仍然處於這股浪潮的後端。

The second thing is that I think the consumer sentiment generally is pretty good, but it's bifurcated, and categories like ours are saying, we look very hard at the competitive data that we have that we buy, and good news, bad news. Bad news is everyone in our categories has gotten hit with the back end of this COVID wave. The good news is that we're holding share or gaining share, so good and bad.

第二件事是，我認為消費者情緒總體上相當不錯，但它是兩極分化的，像我們這樣的類別正在說，我們非常仔細地審視我們所購買的競爭數據，有好消息，也有壞消息。壞消息是，我們類別中的每個人都受到了新冠疫情浪潮的影響。好消息是我們正在持有或獲得份額，無論好壞。

And what we think would -- if this trend didn't continue on the pace that it is for recovery, and it went the other way, we have several levers that we could pull to make sure that we continued on the profitability trends that we're on, which is quite healthy. But we think could be -- if the consumer trend continues on this pace and maybe improves a little bit, then it's really good.

我們認為，如果這種趨勢沒有按照復甦的速度繼續下去，而是走向相反的方向，我們可以利用幾個槓桿來確保我們繼續保持我們所預測的獲利趨勢。都在，這是相當健康的。但我們認為，如果消費趨勢繼續以這種速度發展，並且可能有所改善，那就真的很好了。

If it declines from the trend we're on and gets worse, then we have quite a bit of leverage in our operating model to make up for that and to make sure our bottom line continues to be strong.

如果它從我們所處的趨勢下降並且變得更糟，那麼我們的營運模式中有相當多的槓桿來彌補這一點，並確保我們的利潤繼續保持強勁。

Bill, what else would you add to that?

比爾，你還有什麼要補充的嗎？

Yes, just from a topline perspective, we continuously evaluate all our offerings, our pricing, our bundling opportunities to ensure we have the appropriate price points for each of our consumer segments, and we have some pricing elasticity in that. So we are very consumer focused, trying to improve the consumer experience on it. So ultimately to buck against some of those macro trends.

是的，僅從營收角度來看，我們不斷評估我們所有的產品、我們的定價、我們的捆綁機會，以確保我們為每個消費者細分市場提供適當的價格點，並且我們在這方面有一定的定價彈性。所以我們非常以消費者為中心，努力改善消費者的體驗。因此最終要對抗其中一些宏觀趨勢。

So when you talk about elasticity, you mean price points both at the higher end and lower end.

因此，當您談論彈性時，您指的是高端和低端的價格點。

From a quarterly perspective, our trend lines on our gross margin will be as an accelerated pace back towards the mean of the kind of the low 40s. So we continue to expect that gross margins will improve. And our expense optimization, you've seen that for the last year and a half, and we're going to continue those efforts to watch any softness in the top line.

從季度來看，我們的毛利率趨勢線將加速回到 40 多歲的平均值。因此，我們繼續預期毛利率將會改善。我們的費用優化，您在過去的一年半中已經看到了這一點，我們將繼續這些努力，以觀察營收的疲軟情況。

So in summary, we hope it doesn't happen, but we do have the capability and plans that if the trend would have turned negative that we've been a -- we have the ability to respond to it appropriately.

總而言之，我們希望這種情況不會發生，但我們確實有能力和計劃，如果趨勢轉向我們一直以來的負面趨勢，我們有能力做出適當的反應。

Can I ask one more about the Google -- I think they've made some additional changes with regard to their blast email marketing that some of my consumer companies have mentioned. They're trying to figure out what that means for them. Have you analyzed what those changes mean for your marketing processes?

我可以再問一個關於谷歌的問題嗎——我認為他們已經對我的一些消費者公司提到的群發電子郵件行銷做出了一些額外的改變。他們試圖弄清楚這對他們意味著什麼。您是否分析過這些變化對您的行銷流程意味著什麼？

We have, Linda. There's a lots of changes. And there is both. The changes that Google is implementing or talking about implementing, what they have implemented, and there's also big macro trends that are happening in the marketplace that we feel we're in an awfully good position to weather and respond to. And frankly, some of the things we experienced during the last quarter give us hope that we're going to be less dependent on the big search engines in the future than we were.

我們有，琳達。有很多變化。兩者都有。谷歌正在實施或正在談論實施的變化，他們已經實施了什麼，以及市場上正在發生的宏觀趨勢，我們認為我們處於非常有利的位置來應對和應對。坦白說，我們在上個季度經歷的一些事情給了我們希望，我們未來將比以前更少地依賴大型搜尋引擎。

One of the big assets we've accumulated through the COVID burst was a huge increase in our database, and that gives us some flexibility and less dependency on search engine activity. But Tom, you know really well the specifics of Linda's question.

我們在新冠疫情爆發期間累積的重要資產之一是資料庫的大幅成長，這為我們提供了一定的靈活性，並減少了對搜尋引擎活動的依賴。但是湯姆，你非常清楚琳達問題的具體內容。

Yeah. I mean, I think we're talking up, Linda, is just another change for Google which is a very dynamic business and always has changes going on. Certainly, we also saw some significant changes in just the -- and how the landing pages for Google showed up this year, which we're always reacting to. And overall, this was a competitive environment. Their CPMs and CPAs were up, et cetera, and we kind of expected that to occur.

是的。我的意思是，琳達，我認為我們正在談論的只是谷歌的另一個變化，谷歌是一個非常充滿活力的企業，並且總是在變化。當然，我們也看到了一些重大變化，以及今年Google登陸頁面的顯示方式，我們一直對此做出反應。總的來說，這是一個競爭環境。他們的每千次曝光費用 (CPM) 和每次轉換費用 (CPA) 都上升了，等等，我們有點預料到這種情況會發生。

And if all of your marketing budget or a substantial part of your marketing budget is at that bottom of the funnel kind of activity there, it's going to have big ramifications. Fortunately, for us, that's not the case.

如果您的所有行銷預算或行銷預算的很大一部分都位於漏斗類型活動的底部，那麼它將產生巨大的影響。幸運的是，對我們來說，情況並非如此。

(Operator Instructions) Alex Fuhrman, Craig-Hallum.

（操作員說明）Alex Fuhrman，Craig-Hallum。

Congratulations on the strong bottomline results in the quarter. Bill, I was wondering if you could unpack the lower revenue guidance a little bit more. It seems like the Q2 results were not very far off from what we were all expecting, but the change to the full year revenue guidance is not insignificant. So is it something maybe you're seeing in the lull period between Christmas and Valentine's Day that was maybe a little bit disappointing or just curious if you're seeing any kind of early trend lines into Valentine's Day now, or if that's maybe too early?

恭喜本季強勁的獲利結果。比爾，我想知道您是否可以進一步解釋一下較低的收入指導。看起來第二季的業績與我們的預期相差不遠，但全年營收指引的變化並非微不足道。那麼，您在聖誕節和情人節之間的平靜時期是否會看到一些可能有點令人失望或只是好奇的事情，如果您現在看到情人節的任何早期趨勢線，或者這可能還為時過早早？

Well, it's, I would say, definitely too early. Valentine's Day is a real pain in the neck because it's very, very busy for several days. Mother's Day is a two-week ramp-up. The holiday quarter is from Thanksgiving on, maybe a week or two before Thanksgiving. But Valentine's Day is a big burst of business.

嗯，我想說，這絕對為時過早。情人節真是令人頭疼，因為連續幾天都非常非常忙碌。母親節是一個為期兩週的預熱活動。假期從感恩節開始，可能是感恩節前一兩週。但情人節卻是生意大爆發。

Customer dynamic changes, it goes from majority women to majority men which are wonderful customers, but they don't come back as regularly and frequently as our female customers do. So it's something we -- it's expensive to prepare for. Our cost of goods jumps way up, and we have this big burst of business. So yes, it's a little difficult for us to project exactly what will happen at Valentine's Day.

客戶動態發生變化，從大多數女性轉向大多數男性，這些都是很棒的客戶，但他們不像我們的女性客戶那樣定期和頻繁地回來。所以我們要做的準備成本很高。我們的商品成本大幅上升，我們的業務也迎來了爆發性成長。所以，是的，我們很難準確預測情人節會發生什麼事。

But as Tom mentioned, day placement is critical for Valentine's Day. And last year for the first time, the Super Bowl was right before Valentine's Day. So Valentine's Day was Tuesday last year, and the Super Bowl was at Sunday, and it moved back a week, and it's from its normal schedule to allow more time for the extra regular season game and still have two weeks from the traditional playoffs until the Super Bowl.

但正如湯姆所提到的，日間安排對於情人節至關重要。去年，超級盃比賽首次在情人節之前舉行。所以去年的情人節是星期二，超級盃是周日，它推遲了一周，這是從正常賽程中為額外的常規賽留出更多時間，距離傳統季後賽還有兩週的時間。超級碗。

So we think that we're still going to have that this year. So it's still close to Valentine's Day, but now you have three selling days, Monday, Tuesday, and Wednesday with people in their normal work routines and not having the distraction of the Super Bowl just 48 hours before. So we're expecting all of those things will endure to our benefit.

所以我們認為今年我們仍然會這樣做。現在距離情人節還很近，但現在有三個銷售日，週一、週二和週三，人們都在正常工作，不會被 48 小時前的超級盃比賽分散注意力。因此，我們預計所有這些事情都會持續下去，對我們有利。

Also, we have to watch the weather carefully because that's a big variable. So nothing -- we're excited that Valentine's Day is coming. It's a pain in the neck, as I've mentioned. I've been through a few of these, but we don't see anything trend wise that would give us any concern or frankly any reason to get up and kick our heels.

另外，我們必須仔細觀察天氣，因為這是一個很大的變數。所以沒什麼——我們很高興情人節即將到來。正如我所提到的，這是頸部疼痛。我經歷過其中的一些，但我們沒有看到任何趨勢明智的東西會讓我們感到擔憂，或者坦率地說，沒有任何理由站起來並採取行動。

But Alex, I mean, while our sales trend did improve in the second quarter, it didn't move at the pace of recovery that we had anticipated, still a little softer than we wanted it to be. So as a result, our second half of the year, which we had originally thought to be at a faster improvement than (inaudible) That's where we change our guidance.

但是亞歷克斯，我的意思是，雖然我們的銷售趨勢在第二季度確實有所改善，但它並沒有按照我們預期的復甦速度發展，仍然比我們希望的要軟一些。因此，我們最初認為下半年的改善速度比（聽不清楚）要快，這就是我們改變指導的地方。

Okay. That's very helpful.

好的。這非常有幫助。

And ladies and gentlemen, this concludes your question-and-answer session. I would like to turn the conference back over to Jim McCann for any closing remarks.

女士們、先生們，問答環節到此結束。我想將會議轉回吉姆·麥肯 (Jim McCann) 發表閉幕詞。

Well, thanks so much for your time and interest today. Please let us know if you have any other questions. We're available to answer them for you. Please reach out and do remember, as Alex just mentioned, Valentine's Day is fast approaching. Today is February 1. Valentine's Day is the 14th. Valentines weekend begins around the 8th or 9th. So make sure the people in your life that you care about know how much you care for them. Thanks for your time today.

好的，非常感謝您今天的時間和興趣。如果您有任何其他問題，請告訴我們。我們可以為您解答。請伸出援手並記住，正如亞歷克斯剛才提到的，情人節即將來臨。今天是 2 月 1 日。14號是情人節。情人節週末大約從八號或九號開始。因此，請確保您生活中您關心的人知道您有多關心他們。感謝您今天抽出時間。

Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

謝謝。今天的電話會議到此結束。我們感謝大家參加今天的演講。您現在可以斷開線路並度過美好的一天。