GrowGeneration Corp (GRWG) 2023 Q3 法說會逐字稿

Hello, and welcome to GrowGeneration third quarter 2023 earnings conference call. My name is Julie, and I will be coordinating your call today. Following prepared remarks, we will open the call to questions from analysts, with instructions to be given at that time.

您好，歡迎參加 GrowGeneration 2023 年第三季財報電話會議。我叫朱莉，今天我將協調您的電話。在準備好發言後，我們將開始接受分析師提問，屆時將發出指示。

I will now hand the call over to Clay Crumbliss with ICR.

我現在將把電話轉給 ICR 的 Clay Crumbliss。

Good afternoon, and welcome to the GrowGeneration third quarter 2023 earnings results conference call. Today's call is being recorded. With us are Mr. Darren Lampert, Co-Founder and Chief Executive Officer; and Greg Sanders, Chief Financial Officer of GrowGeneration Corp.

下午好，歡迎參加 GrowGeneration 2023 年第三季財報電話會議。今天的通話正在錄音。與我們一起的還有聯合創始人兼首席執行官 Darren Lampert 先生；格雷格桑德斯 (Greg Sanders)，GrowGeneration 公司財務長

You should have access to the company's third quarter earnings press release, issued after the market closed today. This information is available on the investor relations section of the GrowGeneration website at ir.growgeneration.com.

您應該可以訪問該公司今天收盤後發布的第三季收益新聞稿。此資訊可在 GrowGeneration 網站 ir.grow Generation.com 的投資者關係部分取得。

Certain comments made on this call include forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs concerning future events, and are subject to several risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements.

本次電話會議中提出的某些評論包括前瞻性陳述，這些陳述受到1995 年《私人證券訴訟改革法案》安全港條款的約束。這些前瞻性陳述是基於管理層當前對未來事件的預期和信念，並受到可能導致實際結果與這些前瞻性陳述中所述的結果有重大差異的若干風險和不確定性。

Please refer to today's press release and other filings with the SEC, for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today.

請參閱今天的新聞稿和向美國證券交易委員會提交的其他文件，詳細討論可能導致實際結果與今天所做的任何前瞻性聲明中明示或暗示的結果存在重大差異的風險。

During the call, we'll use some non-GAAP financial measures as we describe business performance. The SEC filing as well as the earnings press release, which provide reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures are all available on our website.

在電話會議期間，我們將使用一些非公認會計準則財務指標來描述業務績效。美國證券交易委員會 (SEC) 備案文件以及收益新聞稿提供了非 GAAP 財務指標與最直接可比較的 GAAP 指標的調整表，均可在我們的網站上取得。

Following our prepared remarks, we will take questions from research analysts. We ask that you please limit yourself to one question and one follow-up. If you have additional questions, please re-enter the queue, and we will take them as time allows.

在我們準備好的發言之後，我們將回答研究分析師的問題。我們要求您只提出一個問題和一項後續行動。如果您還有其他問題，請重新進入隊列，我們將在時間允許的情況下回答您的問題。

Now I will turn the call over to our Co-Founder and CEO, Darren Lampert. Darren?

現在我將把電話轉給我們的聯合創始人兼執行長 Darren Lampert。達倫？

Thanks, Clay. Good afternoon, everyone. Thank you for joining us today to discuss our third quarter 2023 financial results and our full year 2023 guidance. As always, I want to thank each one of our employees across our company, for their continued support of GrowGen.

謝謝，克萊。大家下午好。感謝您今天加入我們討論我們的 2023 年第三季財務業績和 2023 年全年指引。一如既往，我要感謝公司的每一位員工，感謝他們對 GrowGen 的持續支持。

I'm grateful to our entire team for their continued hard work, dedication, and for being steadfast, in executing our company strategy. I am pleased with GrowGen's third quarter results, and I'm happy to discuss the progress we have made to drive future growth and profitability, including the launch of our new ERP system in each region distribution center on July 1, and the success of our proprietary brands.

我感謝我們整個團隊在執行我們公司策略時的持續辛勤工作、奉獻精神和堅定不移。我對 GrowGen 第三季的業績感到滿意，並且很高興討論我們在推動未來成長和獲利能力方面所取得的進展，包括 7 月 1 日在每個地區配送中心推出新的 ERP 系統，以及我們的專有品牌。

Despite the ongoing challenges in our industry, which we have discussed extensively in the past, GrowGen remains in a strong financial position with sufficient liquidity, to continue investing for growth, while putting profitability at the forefront of all we do.

儘管我們的行業面臨持續的挑戰（我們過去曾廣泛討論過），但 GrowGen 仍保持強勁的財務狀況和充足的流動性，繼續投資促進增長，同時將盈利能力放在我們一切工作的首位。

In the third quarter of 2023, we generated net revenue of $55.7 million, which represents a 13% decline over the second quarter of 2023, consistent with the expectations we communicated on our second quarter call. Gross margins improved 320 basis points to 29.1% versus the prior year's comparable quarter of 25.9%, and improved 230 basis points from second quarter gross margins of 26.8%.

2023 年第三季度，我們的淨收入為 5,570 萬美元，比 2023 年第二季度下降 13%，與我們在第二季度電話會議上傳達的預期一致。毛利率比去年同期的 25.9% 提高了 320 個基點，達到 29.1%，比第二季度毛利率 26.8% 提高了 230 個基點。

We ended the third quarter with $66.6 million of cash, cash equivalents and marketable securities, no debt, and $76 million of inventory on our balance sheet. Year to date, we have generated approximately $2.8 million of operating cash flow.

截至第三季末，我們的資產負債表上有 6,660 萬美元的現金、現金等價物和有價證券，無債務，庫存為 7,600 萬美元。年初至今，我們已產生約 280 萬美元的營運現金流。

While the federal legislative agenda has not moved definitively in our favor, it does seem to be getting more favorable. There's renewed optimism for federal reform with the SAFER Act, passing the Senate Committee on banking, and potentially heading to the Senate floor for a full vote, and if approved to the house, then the President.

雖然聯邦立法議程尚未明確朝著對我們有利的方向發展，但它似乎確實變得更加有利。 《安全法案》在參議院銀行委員會獲得通過，並有可能在參議院進行全面投票，如果眾議院獲得批准，則由總統投票，人們對聯邦改革重新燃起樂觀情緒。

More importantly, there's excitement building around cannabis rescheduling after the Department of Health and Human Services recommended rescheduling cannabis from Schedule I to III, which would remove the 280E tax penalty on licensed cultivators, bringing hundreds of millions of dollars, back into the cannabis industry. We expect that this would provide a major tailwind for our industry.

更重要的是，在衛生與公眾服務部建議將大麻從附表I 重新安排到附表III 後，人們對大麻重新安排感到興奮，這將取消對許可種植者的280E 稅收處罰，從而使數億美元重新回到大麻產業。我們預計這將為我們的行業提供主要推動力。

With that said, our three main initiatives remain our primary focus. As we discussed last quarter, what that means in practical terms is, number one, we're continuing to bring to market, innovative new products, and growing our proprietary brand portfolio, attracting a larger customer base.

儘管如此，我們的三項主要舉措仍然是我們的首要任務。正如我們在上季度討論的那樣，這實際上意味著，第一，我們將繼續向市場推出創新的新產品，並擴大我們的專有品牌組合，吸引更大的客戶群。

Number two, we're building upon our ERP launch, and transforming our technology and digital platform. And number three, we are putting profitability at the forefront, focusing on margin expansion, and profitable growth.

第二，我們正在推出 ERP 的基礎上，並轉變我們的技術和數位平台。第三，我們將獲利能力放在首位，專注於利潤率擴張和獲利成長。

Briefly on each of these, first, we remain committed to the expansion of our proprietary and distributed brands, and we are very satisfied with the results. Proprietary products accounted for $7.4 million of retail and e-commerce sales in the third quarter of 2023, which is around 16.6% of our overall retail and e-commerce sales, up from 15% in the second quarter of 2023.

簡而言之，首先，我們仍然致力於擴展我們的專有和分銷品牌，我們對結果非常滿意。 2023 年第三季度，自營產品佔零售和電子商務銷售額 740 萬美元，約佔零售和電子商務整體銷售額的 16.6%，高於 2023 年第二季的 15%。

Product launches include the introduction of the much-anticipated new drip hydro, and nutrient line in Q4, delivering a cost efficient nutrient solution, while not compromising on quality. We're expanding power aside, with an advanced granular range of beneficial microbial solutions to bolster plant health, and optimize growth to be released in Q4.

產品發布包括在第四季度推出備受期待的新型滴水和營養液系列，提供具有成本效益的營養液，同時不影響品質。除了擴大力量之外，我們還將在第四季度發布一系列先進的顆粒狀有益微生物解決方案，以促進植物健康並優化生長。

In Q3, we rolled out Char Coir coco coins, and during the propagation market. The Harvest Company, our consumer gardening initiative is finalizing a diverse product portfolio that includes the already launched premium gloves and printers, as well as the garden in the box kit, an all-in-one solution for gardening enthusiasts that includes raised metal beds, soils, fertilizers, and a curated selection of organic seeds.

在第三季度，我們推出了 Char Coir coco 幣，並在傳播市場期間推出。我們的消費者園藝計畫The Harvest Company 正在最終確定多樣化的產品組合，其中包括已經推出的優質手套和印表機，以及盒裝花園套件，這是為園藝愛好者提供的一體化解決方案，其中包括凸起的金屬床、土壤、肥料和精選的有機種子。

Lastly, MMI's introducing a single tier mobile bench and trade systems, for indoor and greenhouse growers in Q4.

最後，MMI 在第四季度為室內和溫室種植者推出了單層行動工作台和交易系統。

Second, our ERP system has been rolled out across all key business verticals. Like many other ERP rollouts, ours has not been without its challenges, and it will take time before benefits fully materialize. So we're confident in our internal team, and their ability to manage through the transition.

其次，我們的ERP系統已經在所有關鍵業務領域全面推廣。與許多其他 ERP 的推出一樣，我們的 ERP 推出也面臨挑戰，並且需要一段時間才能完全實現效益。因此，我們對我們的內部團隊以及他們管理過渡的能力充滿信心。

Encouragingly, most of the issues we've encountered have been relatively minor, and we're pleased with the progress that has been made to date. The further develop our key technology initiatives, we have strengthened our leadership team with the addition of a Senior VP of Technology, who comes to us with impressive credentials, and whose mandate includes gearing our technological advancements and solidifying our digital infrastructure.

令人鼓舞的是，我們遇到的大多數問題都相對較小，而且我們對迄今為止所取得的進展感到滿意。為了進一步發展我們的關鍵技術計劃，我們增加了一名技術高級副總裁，從而加強了我們的領導團隊，他擁有令人印象深刻的資歷，其職責包括推動我們的技術進步和鞏固我們的數位基礎設施。

And third, we are prioritizing profitable growth, which we believe we will obtain through our continued efforts to grow revenue, execute our margin expansion strategies, and consolidate stores. We're constantly analyzing the business for additional optimization and cost savings opportunities, and expect the continued benefit to flow through to our margins through remainder of 2023 and 2024.

第三，我們優先考慮利潤成長，我們相信我們將透過不斷努力增加收入、執行利潤擴張策略和鞏固門市來實現這一目標。我們不斷分析業務，尋找額外的優化和成本節約機會，並預計在 2023 年剩餘時間和 2024 年，持續的效益將轉化為我們的利潤。

As part of these efforts, we continued to analyze the performance of our current stores with respect to redundancies in the footprint and nonperformance. We closed and consolidated six retail locations in the third quarter, and are in the process of consolidating closing six additional locations in the fourth quarter that we expect to be finalized in November.

作為這些努力的一部分，我們繼續分析當前商店的業績，包括佔地面積冗餘和不良業績。我們在第三季關閉並整合了 6 家零售店，並正在第四季整合關閉另外 6 家零售店，預計將於 11 月完成。

That said, we expect a lower operating expense base, and aim to retain the key customers from consolidated locations on a revenue basis. Further, with our recently implemented centralized distribution system, consolidation of shipments and storage, we will reduce our in-store inventory levels, and ensure quicker deliveries.

也就是說，我們預期營運費用基礎會降低，並旨在以收入為基礎留住合併地點的主要客戶。此外，透過我們最近實施的集中配送系統，整合出貨和存儲，我們將減少店內庫存水平，並確保更快的交貨。

The SKU rationalization we executed in Q3, will now allow us to focus on high demand products and phasing out low performing SKUs. All these executables are positioning us to operate more effectively and efficiently.

我們在第三季執行的 SKU 合理化將使我們能夠專注於高需求產品並逐步淘汰表現不佳的 SKU。所有這些可執行文件使我們能夠更有效、更有效率地運作。

Turning to guidance for full year 2023, we are maintaining our guidance of net revenue in the range of $220 million to $225 million, and adjusted EBITDA loss in the range of minus $4 million to minus $6 million.

談到 2023 年全年的指導，我們將淨收入指引維持在 2.2 億至 2.25 億美元之間，調整後的 EBITDA 損失在負 400 萬美元至負 600 萬美元之間。

With that, I will turn the call over to our CFO, Greg Sanders.

接下來，我會將電話轉給我們的財務長 Greg Sanders。

Thank you, Darren, and good afternoon, everyone. First, I will address our third quarter 2023 financial results, and then I will discuss our updated full year 2023 guidance. For the third quarter, GrowGeneration generated revenue of $55.7 million versus $70.9 million in the third quarter of 2022, representing a decline of approximately 21.4%.

謝謝達倫，大家下午好。首先，我將討論我們的 2023 年第三季財務業績，然後我將討論我們更新的 2023 年全年指引。第三季度，GrowGeneration 的營收為 5,570 萬美元，而 2022 年第三季的營收為 7,090 萬美元，下降約 21.4%。

Our same-store sales for the third quarter 2023 were $40.7 million compared to prior year sales of $47.5 million, representing a 14.4% decline against the comparable year ago quarter. Comparable same-store sales in the third quarter represent a modest sequential improvement over the prior quarter on a percentage basis.

2023 年第三季度，我們的同店銷售額為 4,070 萬美元，而去年同期銷售額為 4,750 萬美元，比去年同期下降 14.4%。第三季的可比同店銷售額以百分比計算較上一季略有改善。

Our e-commerce division generated $2.7 million of revenue versus $3.1 million in the year ago period, representing a decline of 10.2% year over year. Our distribution and other revenue was $11.5 million for the quarter compared to $19.8 million in the year ago period, representing a decline of 42%, largely due to a few large one-time transactions in the year ago period.

我們的電子商務部門創造了 270 萬美元的收入，而去年同期為 310 萬美元，年減 10.2%。本季我們的分銷和其他收入為 1,150 萬美元，而去年同期為 1,980 萬美元，下降了 42%，這主要是由於去年同期進行了一些大型一次性交易。

Gross profit margin was 29.1% for the third quarter of 2023, which is an improvement of 320 basis points to the year ago period. The increase in gross margin in the third quarter of 2023 was largely attributed to the improvement of proprietary brand sales as a percent of revenue, which increased to 16.6% of sales in the third quarter versus 13% of sales in the year ago period.

2023年第三季毛利率為29.1%，較去年同期增加320個基點。 2023 年第三季毛利率的成長主要歸因於自有品牌銷售額佔營收百分比的提高，第三季自有品牌銷售額佔銷售額的比例升至 16.6%，而去年同期為 13%。

Additionally, the company is executing on more bulk buys, with the development of our distribution network that has led to favorable gross margin performance in the quarter. Store operating costs and other operational expenses declined from $13.6 million in the third quarter of 2022 to $11.9 million in the third quarter of 2023, representing a 12.2% reduction.

此外，隨著我們分銷網絡的發展，該公司正在執行更多的大宗採購，這導致本季毛利率表現良好。門市營運成本和其他營運支出從2022年第三季的1,360萬美元下降至2023年第三季的1,190萬美元，下降了12.2%。

The savings year over year were primarily attributed to rationalization efforts of our store count and personnel expense. We believe that the expense reductions to date are sustainable, and we expect to execute upon further reductions through the balance of the year and into the first quarter 2024.

同比節省主要歸因於我們的商店數量和人員費用的合理化努力。我們相信，迄今為止的費用削減是可持續的，我們預計將在今年餘下時間和 2024 年第一季進一步削減開支。

Selling, general and administrative or SG&A costs were $7.6 million in the third quarter. This compares to $8.8 million in the year ago period, representing a 13.8% improvement year over year. SG&A expense reductions are being achieved through various cost controls, most notably through personnel.

第三季的銷售、一般和管理或 SG&A 成本為 760 萬美元。與去年同期的 880 萬美元相比，年增 13.8%。 SG&A 費用的減少是透過各種成本控制來實現的，尤其是透過人員控制。

Depreciation and amortization of intangibles was $4.7 million in the third quarter of 2023 compared to $3.9 million in the year ago period. The increase in depreciation expense is primarily due to the go-live of our new business systems in the third quarter, for which we place the assets into service at July 1.

2023 年第三季無形資產折舊和攤提為 470 萬美元，去年同期為 390 萬美元。折舊費用的增加主要是因為我們的新業務系統在第三季上線，我們的資產在7月1日投入使用。

In the third quarter of 2023, the company did not recognize an income tax benefit or expense. GrowGeneration is using a 0% tax rate as its deferred tax assets are not expected to be realizable. As such, the company has established a full valuation allowance against its deferred tax assets.

2023年第三季度，該公司未確認所得稅福利或費用。 GrowGeneration 採用 0% 稅率，因為其遞延稅務資產預計無法變現。因此，該公司已針對其遞延所得稅資產建立了全額估價備抵。

Net loss for the third quarter was $7.3 million or negative $0.12 per share compared to a net loss of $7.2 million or negative $0.12 per share in the year ago period. Adjusted EBITDA, which excludes interest, taxes, depreciation, amortization, restructuring charges, and share-based compensation, was a loss of $908,000 for the third quarter of 2023 compared to a loss of $2.7 million in the third quarter of 2022, representing a $1.8 million improvement.

第三季淨虧損為 730 萬美元，即每股負 0.12 美元，去年同期淨虧損為 720 萬美元，即每股負 0.12 美元。調整後 EBITDA（不含利息、稅項、折舊、攤提、重組費用和股權激勵）在 2023 年第三季虧損 908,000 美元，而 2022 年第三季虧損 270 萬美元，相當於虧損 1.8 美元。改進。

Related to the balance sheet as of September 30, 2023, the company had total cash, cash equivalents, and marketable securities of $66.6 million which was a decrease of $4 million for the second quarter of 2023. The company increased its prepaids by $4.5 million in the third quarter, primarily to increase our inventory positions in our proprietary branded products, where we are seeing demand increase.

截至2023 年9 月30 日的資產負債表顯示，該公司的現金、現金等價物和有價證券總額為6,660 萬美元，比2023 年第二季減少了400 萬美元。該公司的預付款項增加了450萬美元。第三季度，主要是為了增加我們專有品牌產品的庫存狀況，我們看到需求增加。

Cash used from operations for the third quarter was approximately $4.6 million, primarily related to the aforementioned prepaid investments. Year to date, the company generated positive cash from operations of $2.8 million. That said, the company has sufficient reserves with over $60 million held in money market accounts, in short term low risk investments at September 30, 2023.

第三季營運使用的現金約460萬美元，主要與上述預付投資有關。年初至今，該公司從營運中產生了 280 萬美元的正現金。也就是說，截至 2023 年 9 月 30 日，該公司擁有充足的準備金，在貨幣市場帳戶中持有超過 6,000 萬美元，用於短期低風險投資。

In the third quarter, the company decreased inventory by approximately $700,000 compared to the second quarter. As we look at the fourth quarter, we are aiming to further reduce the inventory position and to improve upon turns, the company has instituted promotional sales events for overstock and slow-moving inventory in the fourth quarter, to help drive additional sell-through of inventory.

第三季度，該公司庫存比第二季度減少了約70萬美元。展望第四季度，我們的目標是進一步減少庫存狀況並提高週轉率，該公司在第四季度針對積壓和滯銷庫存開展了促銷活動，以幫助推動更多的銷售存貨。

During the quarter, we continued to see improvement in our operating expense structure, and were encouraged by the gross margin improvements in the quarter. Operationally, we transitioned our entire retail and corporate business into new ERP point of sale and warehouse management systems. As such, change management and user adoption were a very large focus in the quarter.

在本季度，我們繼續看到營運費用結構的改善，並對該季度毛利率的改善感到鼓舞。在營運方面，我們將整個零售和企業業務轉變為新的 ERP 銷售點和倉庫管理系統。因此，變更管理和用戶採用是本季的一大焦點。

Now moving on to our full year 2023 outlook. We are reaffirming our previously communicated guidance with full year 2023 revenue to be between $220 million and $225 million, and full year adjusted EBITDA loss to be in the range of minus $4 million to minus $6 million. We believe the fourth quarter should benefit from lower inventories and continued rationalization of operating expenses, through our strategic initiatives.

現在我們展望 2023 年全年。我們重申先前傳達的指導，2023 年全年收入在 2.2 億美元至 2.25 億美元之間，全年調整後 EBITDA 損失在負 400 萬美元到負 600 萬美元之間。我們認為，透過我們的策略性舉措，第四季度應該會受益於庫存減少和營運費用持續合理化。

In summary, we remain confident in our ability to navigate the industry, and we'll continue to stay focused on managing the balance sheet and controlling costs, in our efforts to return the business to profitability and driving long-term shareholder value.

總而言之，我們對自己駕馭產業的能力仍然充滿信心，我們將繼續專注於管理資產負債表和控製成本，努力使業務恢復盈利並推動長期股東價值。

Positioning the business for long-term profitability continues to be a top priority today and into 2024. Our approach to capital allocation remains focused on a disciplined approach to return on invested capital, and we see opportunities in long-term planning.

將業務定位為長期獲利能力仍然是當今和 2024 年的首要任務。我們的資本配置方法仍然專注於嚴格的投資資本回報率方法，並且我們在長期規劃中看到了機會。

We are continuing to invest in digital transformation to propel our company through future business cycles. Further, we continue to invest capital into the development of proprietary products, and initiatives that expand our value proposition to a broader base of customers. I'll reiterate that our daily mandate is executing our business strategy, with a sharp focus on long-term profitability and shareholder value.

我們將繼續投資數位轉型，以推動我們的公司度過未來的商業週期。此外，我們繼續投入資金開發專有產品，以及將我們的價值主張擴展到更廣泛的客戶群的舉措。我要重申，我們的日常任務是執行我們的業務策略，並專注於長期獲利能力和股東價值。

With that, I will turn the call back over to Darren for closing remarks.

至此，我將把電話轉回給達倫進行總結發言。

Thank you, Greg. Before we open the line for your questions. I want to reiterate that GrowGen is on solid financial footing, with a strong balance sheet, healthy liquidity, and a solid cash position. We continue to manage our business prudently through the current industry landscape, with an emphasis on sustainable growth, margin expansion, and profitability.

謝謝你，格雷格。在我們開通您的提問專線之前。我想重申，GrowGen 擁有堅實的財務基礎，擁有強大的資產負債表、健康的流動性和堅實的現金狀況。在當前的行業格局下，我們繼續審慎管理我們的業務，並專注於永續成長、利潤率擴張和獲利能力。

We are encouraged by our continued progress and remain laser focused on continuing what we can control to continue to build a stronger, nimbler, and more profitable company. Thank you for your time today, and thank you for your interest in GrowGeneration. We will now take your questions. Operator?

我們對不斷取得的進步感到鼓舞，並將繼續專注於我們所能控制的事情，以繼續建立一家更強大、更靈活、利潤更高的公司。感謝您今天抽出時間，也感謝您對 GrowGeneration 的興趣。我們現在將回答您的問題。操作員？

(Operator Instructions) Aaron Grey, Alliance Global Partners.

（操作員說明）Aaron Grey，Alliance Global Partners。

Good evening, and thank you for the questions. So first question for me. I just want to talk about some of the reform, most notably the potential rescheduling the Schedule III. For you guys, maybe more of an indirect impact in, obviously not being impacted by the 280E tax right now, but a lot of your clients are.

晚上好，謝謝你的提問。所以我的第一個問題。我只想談談一些改革，尤其是可能重新安排附表三。對你們來說，也許更多的是間接影響，顯然現在沒有受到 280E 稅的影響，但你們的許多客戶都受到了影響。

So how do you think about potential indirect impacts of scheduling of Schedule III, could have removal to [any particular some of your] plan on pulling back on CapEx initiatives, and how that could change, and direct benefits for you guys could have come back? Thank you.

那麼，您如何看待 Schedule III 計劃的潛在間接影響，可能會取消 [任何特定的] 撤回資本支出計劃的計劃，以及這種情況會如何改變，以及您的直接利益可能會回來？謝謝。

I find it quite exciting, and I think the industry needs it. Currently, there's hundreds of millions of dollars right now being spent on 280E tax penalties, as you probably know, I mean, we're talking hundreds of millions of dollars. And with this money coming back into the industry of reschedule, the money will go to the MSOs and large single-state operators back onto their balance sheets to strengthen balance sheets.

我覺得這很令人興奮，而且我認為這個行業需要它。目前，有數億美元用於 280E 稅收處罰，您可能知道，我的意思是，我們正在談論數億美元。隨著這些資金重新回到重新安排產業，這些資金將流向 MSO 和大型單一國家營運商，重新回到其資產負債表上，以加強資產負債表。

And with that, we do believe will start coming into expansion of facilities, and also more importantly into refreshing facilities. And we've seen so many buildouts in from 2019 to 2021. And with the life expectancy of LED lighting, and [DUs] and a lot of the durable products that they use, there will becoming a tremendous upfront cycle coming.

有了這個，我們確實相信將開始擴大設施，更重要的是更新設施。從 2019 年到 2021 年，我們看到瞭如此多的擴建。隨著 LED 照明、[DU] 以及他們使用的許多耐用產品的預期壽命的延長，將會出現一個巨大的前期週期。

And they're going to be to do -- there's going to be a lot of durable products going out the next couple of years, to refresh a lot of the facilities out there right now. So we are quite excited. As you know, GrowGen bread and butter is the large commercial operators out there.

他們將要做的事——未來幾年將推出大量耐用產品，以更新目前的大量設施。所以我們非常興奮。如您所知，GrowGen 是一家大型商業營運商。

So we believe that we will get a majority of a lot of the business coming out of 280E, if it goes away with the rescheduling. So we're excited about it. And you know, we got our fingers crossed, and like we all know the next couple of months, we should be hearing something.

因此，我們相信，如果 280E 業務隨著重新安排而消失，我們將從 280E 獲得大部分業務。所以我們對此感到興奮。你知道，我們祈禱，就像我們都知道的那樣，在接下來的幾個月裡，我們應該會聽到一些消息。

Okay, great. Thanks for that color. And then second one for me, it kind of bring down the store fleets, 50 now sounds like you'll be at about 44, another 6 in the upcoming quarter. Number one, how do you feel with the store fleet at that level? I'd like kind of hold there, may be some smaller growth opportunities, open up some new stores?

好的，太好了。謝謝那個顏色。然後對我來說第二個，它有點減少商店的數量，現在 50 家聽起來你會變成 44 家左右，下個季度還會有 6 家。第一，您對這個級別的商店隊伍感覺如何？我想保留在那裡，可能會有一些較小的成長機會，開一些新店？

And then number two, on the 14% same store sales decline. Could you maybe provide what that might be on a pro forma basis on what the new 44 being including the 6, you plan to consolidate in 4Q?

其次是同店銷售額下降 14%。您能否提供您計劃在第四季度整合的新 44 台（包括 6 台）的預計數據？

Yeah, I'll start and then send it over to Greg. With the 6 stores there, and that brings us down at 50. So you're double counting the six. So we were at 56 with 6 stores we're talking about closing this month, that would bring us down to 50.

是的，我會開始然後將其發送給格雷格。那裡有 6 家商店，這樣我們就減少到 50 家。所以你重複計算了這 6 家商店。所以我們的數量是 56 家，其中有 6 家商店我們正在討論本月關閉，這將使我們的數量減少到 50 家。

We've already shut those stores in the midst of consolidating. And so that brings us down to 50. We still do have a small amount of work to do on the portfolio. And the way we're looking at it right now, with the build-out of our distribution center in Ohio, the success of our private-label brands, and the launch of our ERP system, POS, and also warehouse, we're becoming much more efficient.

我們已經在整合過程中關閉了這些商店。這樣一來，我們的數量就減少到了 50 個。我們在投資組合方面仍有少量工作要做。我們現在看待這個問題的方式是，隨著俄亥俄州配送中心的擴張、自有品牌的成功以及 ERP 系統、POS 和倉庫的推出，我們正在變得更有效率。

And we're starting to see right now. The stores don't need as much product in it. Our customers are much more reliable. They're planning much better. And with that, we just don't need redundancies within the footprint.

我們現在就開始看到。商店不需要那麼多產品。我們的客戶更加可靠。他們的計劃要好得多。這樣，我們就不需要在佔地面積內進行冗餘。

And when you take a look what we've closed in the last in the last four months, it was 12 stores, I think 15 during the last seven or eight months, but most are more than 30 miles of another store. There were smaller stores that were majority were bought through acquisitions, and those weren't the main stores within the acquisitions.

當你看到我們在過去四個月關閉的商店時，你會發現有12 家商店，我想過去七八個月有15 家商店，但大多數都位於距離另一家商店超過30 英里的地方。有一些規模較小的商店，大部分是透過收購購買的，而且這些商店並不是收購中的主要商店。

So we feel pretty comfortable right now. We believe that there will be tremendous savings, not only through the store closures, but also through consolidation of back office staff and accounting. So it's moving us two-fold opposed to one. And when you look at the stores that we've closed, the 12 stores that we closed accounted for about $22 million of business in 2022. Greg, anything to add to that?

所以我們現在感覺很舒服。我們相信，不僅透過關閉商店，而且透過合併後台人員和會計，都將節省大量資金。因此，它對我們的推動是雙重的。當你看看我們關閉的商店時，你會發現我們關閉的 12 家商店在 2022 年的營業額約為 2200 萬美元。Greg，還有什麼要補充的嗎？

Yeah, no, I think that's spot on, Darren. And I think for the comp question in isolation, what we'll see on a quarterly basis is a reduction of approximately $3 million to $4 million depending on the quarter at this point. We did see some down performances in some of those locations that we've consolidated throughout the course of the year and into the fourth quarter as well.

是的，不，我認為這是正確的，達倫。我認為，就薪酬問題而言，我們將按季度看到大約減少 300 萬至 400 萬美元，具體取決於此時的季度。我們確實看到一些地區的業績有所下降，我們在全年和第四季度都對這些地區進行了整合。

And the number around 50, Aaron, just to mention, is inclusive of the Q4 activity where we've ceased operations within November, and expect to conclude the operational procedures around closing by the end of the month. So that's an all-in number for us at this point.

順便提一下，亞倫這個數字大約是 50 人，其中包括我們在 11 月停止營運的第四季活動，並預計在本月底完成關閉前後的營運程序。這就是我們目前的全部數字。

Yeah, I'm going to get a little more color with seven stores in California, three stores in Colorado, one store in Michigan, and the one store in Washington.

是的，我將在加州開設七家商店，在科羅拉多州開設三家商店，在密西根州開設一家商店，在華盛頓開設一家商店，從而獲得更多色彩。

That's helpful color. Appreciate that. Thanks for the color and the clarification. I'll jump back in queue.

這是有用的顏色。感謝。感謝您的顏色和澄清。我會插回隊列。

Thank you, Aaron.

謝謝你，亞倫。

Andrew Carter, Stifel.

安德魯卡特，斯蒂菲爾。

Hey, thanks. I just want to build on that just a little bit with the same stores. Obviously, you're closing the more redundant locations and therefore, there should be some kind of lift within the cannibalization. So I think we can back in, and it seems like that might be the absolute declines moderating quite a bit in 4Q, given the absence of stores. But when do you think cannibalization category, you could see actually a return to same-store sales growth of the current base.

嘿，謝謝。我只是想在同樣的商店基礎上再做一點點。顯然，您正在關閉更多冗餘位置，因此，在蠶食中應該有某種提升。因此，我認為我們可以回來，考慮到商店的缺失，第四季度的絕對下降可能會大幅放緩。但您何時考慮蠶食品類，您實際上可以看到同店銷售成長恢復到目前的水平。

Now I believe we will see it next year. We've been bouncing along the bottom this year. Our same-store sales for the last six months have been in that 14% down range. We are seeing a lot more commercial bidding coming in to GrowGen right now, and with the uptake of our private label products, and distribution, and being able to get products to our customers quicker than any other store in the country.

現在我相信我們明年就會看到它。今年我們一直在底部反彈。過去六個月我們的同店銷售額一直在下降 14% 的範圍內。我們現在看到 GrowGen 收到了更多的商業招標，並且隨著我們自有品牌產品的採用和分銷，並且能夠比國內任何其他商店更快地將產品交付給我們的客戶。

We do believe all that business is going to restart, GrowGen will be a better company for it. Can I tell you it's going to happen here in the first quarter and fourth quarter this year. I can't tell you that. But with what's going on in legislation right now, I think of 280 E, I think if we reschedule, you'll see money coming back into this industry.

我們確實相信所有業務都會重新啟動，GrowGen 將因此成為一家更好的公司。我可以告訴你，這將在今年第一季和第四季發生。我不能告訴你這一點。但隨著目前立法的進展，我想到了 280 E，我認為如果我們重新安排時間，你會看到資金重新回到這個行業。

So we're very optimistic where we've brought the cost levels of this company. We brought costs down almost $25 million over the last couple of years, we brought inventory down over $30 million over the last couple of years. So, you know, we are working hard to getting this company back profitable, and getting same-store sales the other way.

因此，我們對這家公司的成本水準非常樂觀。在過去幾年中，我們降低了近 2500 萬美元的成本，在過去幾年中，我們降低了超過 3000 萬美元的庫存。所以，你知道，我們正在努力讓這家公司恢復獲利，並以其他方式獲得同店銷售。

We close a lot of -- a lot of stores that we close will be redundant, but a portion of more are also non-performing to, and with our private label penetration up about 17% right now, and we believe that goes into the 20s next year. We think that will fuel same-store sales growth at our stores.

我們關閉了很多——我們關閉的許多商店都是多餘的，但還有一部分商店也表現不佳，而且我們的自有品牌滲透率目前約為 17%，我們相信這會影響到明年20多歲。我們認為這將推動我們商店的同店銷售成長。

Second question, I wanted to ask and just kind of stepping back, like you're closing the stores, I guess, during the super cycle, it could have kind of given you some false reads in the category of kind of the necessity of that last mile.

第二個問題，我想問，只是後退一步，就像你要關閉商店一樣，我想，在超級週期期間，它可能會給你一些錯誤的解讀，在這種必要性的類別中最後一英里。

Do you believe like the step back in the footprint, you'll be just as well positioned with the category accelerates, or is this or -- are there some trade-offs or is this a category where last mile isn't as necessary when I mean is that GrowGen doesn't have to have it 24 hours, it can live with 48, therefore, shift from Ohio. Just kind of those puts and takes as you're thinking about being prepared for the eventual return to growth in this category.

您是否相信，就像足跡中的後退一步一樣，您將在類別加速中處於有利位置，或者是這樣還是——是否需要進行一些權衡，或者這是一個類別，在這種情況下，最後一英里並不那麼必要我的意思是，GrowGen 不需要 24 小時，它可以忍受 48 小時，因此，從俄亥俄州轉移。當您考慮為該類別的最終恢復成長做好準備時，這些就是這些看跌期權和看跌期權。

When I look at GrowGen right now in our store accounts, where we are, and with boots on the ground with our commercial team, I think we're better positioned than we've ever been, with the launch of our new ERP system, distribution, and private label.

當我現在在我們的商店帳戶中查看 GrowGen 時，我們所處的位置，以及我們商業團隊的實際行動，我認為隨著我們新 ERP 系統的推出，我們比以往任何時候都處於更好的位置，分銷和自有品牌。

And the one thing that we're starting to see, is forecasting coming from our customers. And like we've always said, we don't represent that much of the illegal markets. So, you know, our bread and butter is the legal markets.

我們開始看到的一件事是來自客戶的預測。就像我們一直說的那樣，我們並不代表那麼多非法市場。所以，你知道，我們的麵包和奶油是合法市場。

So with more money going back onto the balance sheets, if you see a reschedule. We do believe that business is going to come to GrowGen, will make us a better company for it. So it's what keeps us optimistic is, you know, again, we will continue to cut where needed, and continue to get this company, Andrew, where it needs to be, and you've seen it through the year.

因此，如果你看到重新安排的話，就會有更多的錢回到資產負債表上。我們確實相信，業務將會來到 GrowGen，並使我們成為一家更好的公司。所以讓我們保持樂觀的是，你知道，我們將繼續在需要的地方進行削減，並繼續讓這家公司，安德魯，達到它需要的水平，你已經看到這一年了。

You've seen us through our numbers right now. But the most exciting part of GrowGen right now is the uptake of our private label products and the brands that we're bringing to market. We're launching drip powders on this quarter, the follow up on our drip nutrient lines that's had a tremendous 1st year for us.

您現在已經透過我們的數字看到了我們。但目前 GrowGen 最令人興奮的部分是我們的自有品牌產品和我們推向市場的品牌的採用。我們將在本季推出滴灌粉，這是我們第一年取得巨大成功的滴灌營養產品線的後續產品。

We're adding products onto our CharCoir brands. We're launching single -- we're branching of benching from MMI company single-tier benching. So there's a lot of excitement at our company right now, but getting costs in line with really -- it's the new norm in the business, if you ask me.

我們正在將產品添加到我們的 CharCoir 品牌中。我們正在推出單層——我們是 MMI 公司單層長凳的分支。因此，我們公司現在有很多令人興奮的事情，但如果你問我的話，讓成本真正符合——這是行業的新規範。

There are people waking up in the morning and deciding to go out start growing. That's kind of -- that's run its course. So you're seeing many more legal growers out there, and also single license in states that are allowing, as you saw in Ohio yesterday. They have very favorable homegrown rules in Ohio, you probably will see a store from GrowGen in Ohio this year. It's probably first quarter next year.

有些人早上醒來，決定出去開始成長。這就是──一切都順其自然了。因此，您將看到更多的合法種植者，並且在允許的州也有單一許可證，正如您昨天在俄亥俄州看到的那樣。他們在俄亥俄州有非常有利的本土規則，今年您可能會在俄亥俄州看到 GrowGen 的一家商店。應該是明年第一季吧

I mean, we will still be expanding, but you're probably talking one or two stores in states, not what we used to have. The industry right now is more predictable on forecasting is better, so less is more right now for us.

我的意思是，我們仍將擴張，但你可能談論的是各州的一兩家商店，而不是我們過去擁有的商店。目前產業的可預測性更高，預測效果更好，因此對我們來說，現在少即是多。

Thanks. I'll pass it on.

謝謝。我會把它傳遞下去。

Eric Des Lauriers, Craig-Hallum Capital Group.

艾瑞克‧德斯‧勞裡爾斯 (Eric Des Lauriers)，克雷格-哈勒姆資本集團。

Great. Thank you for taking my questions. I guess first one, just kind of following up on the store outlook here. It sounds like you're mostly consolidating stores in these more legacy unlimited license markets here. You mentioned Ohio is a place that you might look to add a store, within the next couple of months here.

偉大的。感謝您回答我的問題。我想第一個，只是對這裡的商店前景進行跟進。聽起來您主要是在這些更傳統的無限許可市場中整合商店。您提到俄亥俄州是您可能希望在接下來的幾個月內增加商店的地方。

Beyond this newly legalized Ohio state here, are there other states that you are looking to sort of continue expanding in, I guess just how should we think of the overall expansion plans, kind of going forward here? Is it kind of following states as they legalize? Or do you have sort of a more extensive road map for, call it the next year or so?

除了這個新合法化的俄亥俄州之外，您是否還希望在其他州繼續擴張，我想我們應該如何考慮這裡的整體擴張計劃？它是在追隨各州的合法化嗎？或者你有更廣泛的路線圖，稱之為明年左右嗎？

The states that are legalizing dependent upon rules. And again, the Ohio rules were favorable, but we have a 100,000 square foot warehouse in Ohio. So we'll probably only need to store in Ohio, and ship out of our warehouses on within 24 hours.

合法化的州取決於規則。再說一次，俄亥俄州的規定是有利的，但我們在俄亥俄州有一個 100,000 平方英尺的倉庫。因此，我們可能只需要在俄亥俄州儲存，並在 24 小時內從我們的倉庫發貨。

We're still looking at New York. We're looking at Pennsylvania, Maryland, and a couple of other states. We've looked at another store in Missouri and New Jersey. But right now, you know, we're taking a wait-and-see attitude, the states that we're already in.

我們仍在關注紐約。我們正在關注賓夕法尼亞州、馬裡蘭州和其他幾個州。我們考察了密蘇裡州和新澤西州的另一家商店。但現在，你知道，我們正在採取觀望態度，我們已經處於這種狀態。

We believe that we're pretty well served in those states, and are looking to add footprints. But if something comes up, that's beneficial to our shareholders, we will do it. What we're really looking for right now is stores that are closing.

我們相信我們在這些州的服務相當好，並且正在尋求增加足跡。但如果出現對我們股東有利的事情，我們就會這麼做。我們現在真正要尋找的是即將關門的商店。

We're bringing them into the GrowGen umbrella, applying some inventory from them, from taking customer lists, and sometimes some employees. We did that in St. Louis this year, and are worked out tremendously for us. So it's just that wait and see and see where the market goes for. But the one thing that we will continue to do, is keep our balance sheet extremely strong, until we see a real turn in the industry.

我們將他們納入 GrowGen 的保護傘中，從他們、客戶名單中應用一些庫存，有時還包括一些員工。今年我們在聖路易斯做到了這一點，我們的訓練效果非常好。因此，只需拭目以待，看看市場走向如何。但我們將繼續做的一件事是保持我們的資產負債表極其強勁，直到我們看到行業真正的轉變。

It's helpful. I appreciate that color. Next one from me I think I caught in some of the Q&A here that you think private label as a percentage of overall sales or maybe a percent of retail sales, I'm not sure, but that could go up into the 20s next year. I think that's an increase from sort of previous commentary.

這很有幫助。我很欣賞那種顏色。在我的下一篇文章中，我想我在這裡聽到了一些問答，您認為自有品牌佔總銷售額的百分比，或者可能佔零售額的百分比，我不確定，但明年可能會上升到20 多歲。我認為這比之前的評論有所增加。

Could you just kind of expand on that a bit of do you need to get additional new products in line here. I know you have a handful that. You've just recently introduced here is this sort of portfolio of proprietary brands now sufficient to get you to that -- to the 20% plus level?

您能否稍微擴展一下您是否需要在此處獲得更多新產品？我知道你有一些。您最近剛在這裡介紹的這種專有品牌組合現在是否足以讓您達到 20% 以上的水平？

And if you can kind of -- if you're willing to share any kind of longer-term goals of where you think private label can be as a percentage of sales, that would be helpful. Thanks.

如果您願意分享任何您認為自有品牌在銷售額中所佔百分比的長期目標，那將會有所幫助。謝謝。

You know, I believe that what we have in house right now, with the launch of drip hydro powders, will bring us into that 20% mark next year. We're also doing a lot of work to the Harvest Company, and we will be launching products into IGC next year, you know, pruners and garden in a box that we've just started to roll out. Certain mushroom kits that we're rolling out.

你知道，我相信，隨著滴水粉的推出，我們現在擁有的產品將使我們明年達到 20% 的目標。我們也為 Harvest Company 做了很多工作，明年我們將向 IGC 推出產品，你知道，我們剛開始推出的盒子裡的修枝剪和花園產品。我們正在推出的某些蘑菇套件。

Well CharCoir has had a wonderful year -- has had a wonderful 2023, and we continue to launch new CharCoir products from CharCoir, we just entered the propagation space with coco coins. So there's a lot going on right now in our private label division. And it's really what's fueling GrowGen right now, starting to fuel new customers coming to our stores, and also on the distribution side of it.

CharCoir 度過了美好的一年——度過了美好的 2023 年，我們繼續推出 CharCoir 的新 CharCoir 產品，我們剛剛進入了可可幣的傳播領域。因此，我們的自有品牌部門目前正在發生很多事情。這確實是目前 GrowGen 的動力，開始吸引新客戶來到我們的商店，也在分銷方面。

And so we're excited, and we do believe you will see that number in the 20s next year, further out to 2025, we do believe will continue to grow. We believe we did a lot of wonderful products from other vendors out there right now. So we believe somewhere between that 30% to 35% number when we fully grow up, and that'll probably be 2026, '27, we do believe we reach that number.

所以我們很興奮，我們相信明年你會看到這個數字 20 多歲，更遠到 2025 年，我們相信會繼續成長。我們相信我們現在從其他供應商那裡做了很多精彩的產品。所以我們相信，當我們完全長大後，這個數字會在 30% 到 35% 之間，而且可能會在 2026 年、27 年，我們確實相信我們會達到這個數字。

Thank you. Appreciate it.

謝謝。欣賞它。

Brian Nagel, Oppenheimer.

布萊恩·內格爾，奧本海默。

So I apologize if this is repetitive. I just want to jump on the call late, but just with regard to the store closings, are you -- is it -- is this just repositioning within markets, or are you at -- are you with these closings exiting some markets?

因此，如果這是重複的，我深表歉意。我只是想稍後再接電話，但就商店關閉而言，您是——是——這只是市場內的重新定位，還是——您是否正在關閉商店以退出某些市場？

And then a second question again. I apologize if you may have already laid this out, but how should we think about kind of the near-term financial implications of closing these stores on your from a sales loss perspective as well as a expense reduction perspective.

然後又問第二個問題。如果您可能已經列出了這一點，我很抱歉，但是從銷售損失和減少費用的角度來看，我們應該如何考慮關閉這些商店對您的短期財務影響。

It's the 12 stores that we've closed, Brian, in the last four months, we weren't losing markets. There were redundancies, most -- I think probably 10 or 11 of the stores with it were within 30 miles to another store that we had.

布萊恩，我們在過去四個月關閉了 12 家商店，但我們並沒有失去市場。大多數裁員——我想可能有 10 或 11 家擁有裁員的商店距離我們擁有的另一家商店不到 30 英里。

There were smaller stores within regions and not performing, as well as we would have liked. And we've done a decent job getting out of most of the leases right now, and cutting the costs. When you look from a financial side of it, those 12 stores accounted for about $22 million of business in 2022, and that was tailing off into 2023.

區域內有一些較小的商店，但表現不佳，正如我們所希望的那樣。我們現在已經完成了不錯的工作，解除了大部分租約並削減了成本。從財務角度來看，這 12 家商店在 2022 年的營業額約為 2,200 萬美元，而這一數字到 2023 年會逐漸減少。

From a revenue standpoint, what we believe we're going to keep, somewhere in that 50% mark, we usually will keep a majority of the commercial customers, and dependent upon which store it is, and how close there's another store to it, that's where the homegrown markets will fall.

從收入的角度來看，我們相信我們將保留的東西，在50% 的某個地方，我們通常會保留大多數商業客戶，並取決於它是哪家商店，以及另一家商店距離它有多遠，這就是本土市場將會下跌的地方。

We believe that, you know, again, GrowGen still is best on -- we have the best stock in our stores. We have the best solutions, and again people still want to shop with us. So we are incentivizing our staff to keep these customers to go getting the customers. We're doing work before closing stores with contacting customers and giving them benefits, to come to the next nearest store of GrowGen.

我們相信，您知道，GrowGen 仍然是最好的——我們商店裡有最好的庫存。我們擁有最好的解決方案，人們仍然想在我們這裡購物。因此，我們正在激勵我們的員工，讓這些客戶繼續吸引客戶。我們正在做關店前的工作，聯繫顧客並給他們福利，讓他們來到下一家最近的 GrowGen 商店。

Also will have a little more color for that, probably in six months or when we really get an understanding of what percentage we cap. But we do track it. Right now for guidance, we aren't changing guidance for 2023. So with that, you're probably dropped $3 million to $4 million off of the fourth quarter. But we still we're very comfortable with guidance right now for the year.

可能會在六個月內或當我們真正了解我們的上限百分比時，還會有更多的顏色。但我們確實追蹤它。目前，我們不會更改 2023 年的指引。因此，您可能會比第四季減少 300 萬至 400 萬美元。但我們仍然對今年的指導感到非常滿意。

Yes, that's very helpful, Darren. Then I have a follow-up question. Sorry saying caveat, if you addressed this, I apologize, but gross margin looked a bit better here. So I just wondered confirm that. But then also, what are the -- how should we think about the drivers here of the better gross margins in Q3?

是的，這非常有幫助，達倫。然後我有一個後續問題。抱歉，請注意，如果您解決了這個問題，我很抱歉，但這裡的毛利率看起來要好一些。所以我只是想確認一下。但接下來，我們該如何思考第三季毛利率提高的驅動因素是什麼？

Greg, you can take that.

格雷格，你可以接受。

Yeah. So I think when you look at the third quarter gross margin, the primary driver within the period itself was private label more than any other independent factor. A quarter-over-quarter basis, we drove private label from 15% to 17%. Year over year was 13% to 17%.

是的。因此，我認為，當您查看第三季的毛利率時，該期間的主要驅動力本身就是自有品牌，而不是任何其他獨立因素。按季度計算，我們將自有品牌從 15% 提高到 17%。年增幅為 13% 至 17%。

75% of our Q3 sales were from the retail business, which in itself improved a point-and-a-half on margin, primarily from some of the private label benefits, also some improvements in mix, as well as price increases, within some of our products, as we're focused on profitability of the business.

我們第三季銷售額的 75% 來自零售業務，零售業務本身的利潤率提高了一個半，主要來自一些自有品牌的優勢，還有一些產品組合的改進以及價格上漲，我們的產品，因為我們專注於業務的獲利能力。

Separate from that, I think you're starting to see early signs of some of the margin improvements from the distribution development, and investments that we've made, as we're going out and negotiating larger bulk buys, negotiating points off those SKUs that we're bringing into our portfolio, and then recognizing a slightly larger margin on the sale itself.

除此之外，我認為您已經開始看到分銷開發和我們所做的投資帶來的一些利潤率改善的早期跡象，因為我們正在出去談判更大規模的採購，談判這些 SKU 的要點我們正在將其納入我們的投資組合，然後認識到銷售本身的利潤率略高。

So there's a lot of factors that go into it. But we were very, very pleased with how the quarter reported, and we're optimistic that we'll continue to build out of this into future periods.

所以這裡面有很多因素。但我們對本季的報告非常非常滿意，我們樂觀地認為我們將繼續在未來的時期繼續發展。

I appreciate the color. Thanks a lot.

我很欣賞它的顏色。多謝。

Thanks, Brian.

謝謝，布萊恩。

Scott Fortune, ROTH MKM.

斯科特·福瓊，羅斯·MKM。

Yeah, good afternoon. Thanks for the questions. Just kind of follow up on that. Can you can you break down a little bit, or provide a little more color on the sustainable model that you're looking to build with the consumables, what percent came from consumables versus equipment mix?

是的，下午好。感謝您的提問。只是跟進一下。您能否詳細說明一下，或者為您希望使用消耗品構建的可持續模型提供更多信息，來自消耗品與設備組合的百分比是多少？

I know if we see rescheduling, which we think is like that we can increase the equipment side of it, but just kind of give us a sense of that mix, in how you see, kind of going forward in '24, or moving forward with the margin improvement there?

我知道如果我們看到重新安排，我們認為這就像我們可以增加設備方面，但只是讓我們對這種混合有一種感覺，就像你所看到的那樣，在 24 年繼續前進，或者繼續前進利潤率有改善嗎？

Greg, do you have any specifics with that or you want me to take it?

格雷格，你有任何具體情況嗎？或者你希望我接受它？

Maybe I'll just start there, and pass it over to you. I mean what we've seen on a consumables versus durables basis, over the last several quarters, is certainly more stabilization in the consumables end of our business, primarily in the Char Coir and drip lines, which are private label brands.

也許我就從這裡開始，然後把它交給你。我的意思是，在過去幾個季度中，我們在消耗品與耐用品的基礎上看到，我們業務的消耗品端肯定更加穩定，主要是炭纖維和滴灌線，這些都是自有品牌。

I think Char Coir, at this point in time is maybe our best-selling brand in our entire portfolio. So you're seeing about a 75%, 25% mix, which has been generally consistent over the last three or four quarters, as we've looked at the business, and certainly down from some of the higher end years or quarters 2020 and 2021, we're seeing a lot of build activity.

我認為 Char Coir，目前可能是我們整個產品組合中最暢銷的品牌。因此，您會看到大約 75%、25% 的混合比例，正如我們對業務的研究，這在過去三到四個季度中基本保持一致，而且肯定低於 2020 年的一些高端年份或季度， 2021年，我們將看到大量的建設活動。

So we do have a fair amount of comfort at this point with where consumables are, and how they're supporting kind of the baseline of the business. And Darren, I'll pass it over to you.

因此，目前我們確實對消耗品的位置以及它們如何支援業務基準感到相當滿意。達倫，我會把它交給你。

Yeah Scott, on the other side of that, with rescheduling does come, there is no question that buildouts will resume, money will come into the industry, and we still believe that there's a tremendous refresh cycle coming.

是的，斯科特，另一方面，隨著重新安排確實到來，毫無疑問，擴建將恢復，資金將進入該行業，我們仍然相信一個巨大的更新周期即將到來。

So with that, consumables will stay the same, if not, start ticking up a notch with people, hopefully start opening up certain rooms that they close. But we do believe you'll see a tremendous blip, on the durable side of it, on the lighting side of it, on the DU side of it.

因此，消耗品將保持不變，如果不是，則開始與人們打交道，希望開始打開他們關閉的某些房間。但我們確實相信您會看到一個巨大的光點，在它的耐用側、照明側、DU 側。

And we are seeing much, much more bidding -- we're seeing a tremendous amount of bidding right now on commercial products around the country, in anticipation of rescheduling. So I think our commercial team has been extremely busy, the busiest that they've been in the last couple of years.

我們看到了越來越多的競標——我們現在看到全國各地對商業產品進行了大量的競標，預計會重新安排。所以我認為我們的商業團隊非常忙碌，是過去幾年最忙碌的。

I'll be it, it takes time to get to get these projects done. But the amount of is the amount of quoting we're doing right now, it's certainly much different than we've seen -- it's much better than we've seen in the last couple of years.

我會的，完成這些項目需要時間。但我們現在正在做的引用數量，它肯定與我們所看到的數量有很大不同——它比我們過去幾年所看到的要好得多。

Great. I appreciate that color. And then just drilled one other. Where are you with the inventory levels kind of, obviously, with the discounting of inventory from competitors, that kind of playing out here, are we still seeing some pressure there, and then with consolidating your store base, what kind of a normalized inventory level that you're looking at? I know you have like $76 million or something like that this quarter where the terms that you are kind of focused on targeting towards getting on inventory levels pricing?

偉大的。我很欣賞那種顏色。然後就又鑽了另一個。你的庫存水平在哪裡，顯然，隨著競爭對手的庫存摺扣，我們仍然看到那裡有一些壓力，然後通過鞏固你的商店基礎，什麼樣的標準化庫存水平你正在看什麼？我知道本季你們有大約 7600 萬美元或類似的資金，你們的重點是針對庫存水準定價的條款？

Greg, I'm going to send that one question over to you.

格雷格，我要把這個問題轉給你。

Yeah, so inventory, we're highly focused on this quarter. As we moved into our new European warehouse management systems. We loaded on inventory a little bit, heading into that kind of massive change management piece in our business, which we think went pretty well.

是的，所以庫存，我們高度關注本季。當我們進入新的歐洲倉庫管理系統。我們增加了一些庫存，進入了我們業務中的大規模變革管理部分，我們認為進展相當順利。

So now we're looking at eliminating redundancies in our inventory, and driving progress in the fourth quarter. We think there is opportunity to improve upon our turns, where we're adding inventory more than anywhere else right now is on our private label side of things, as there's longer lead times and demand is increasing.

因此，現在我們正在考慮消除庫存冗餘，並推動第四季度的進展。我們認為我們有機會改善我們的輪流，我們目前在自有品牌方面增加的庫存比其他任何地方都多，因為交貨時間更長，需求也在增加。

We still have a lot of very, very good vendors domestically that we have great partnerships with as well, that will continue to carry their products and sell through. But we think there's opportunity to reduce inventory in $5million or so in the fourth quarter. And then we'll probably have more color on the next call in terms of what that might look like for '24.

我們在國內仍然有很多非常非常好的供應商，我們也與他們建立了良好的合作夥伴關係，他們將繼續攜帶他們的產品並進行銷售。但我們認為第四季有機會減少約 500 萬美元的庫存。然後，我們可能會在下一次電話會議中就 24 年的情況提供更多資訊。

Appreciate it. Thanks, guys.

欣賞它。多謝你們。

(Operator Instructions) Mark Smith, Lake Street Capital Markets.

（操作員說明）Mark Smith，Lake Street Capital Markets。

Hi, guys. Just a follow up from that last one. Darren, within your private label, what does your mix look like there of kind of consumables versus durables.

嗨，大家好。只是最後一個的後續。達倫，在您的自有品牌中，您的消耗品與耐用品的組合是什麼樣的。

I would say consumables probably is about 80% of it right now on the 17%. We have a lighting brand ION Life that have been quite successful, is our leading lighting brand right now at GrowGen. But the leading part of our portfolio right now on our private label side, is certainly Char Coir and drip had a tremendous loss this year, and is growing very quickly.

我想說，目前消耗品可能佔 80%，而現在佔 17%。我們有一個非常成功的照明品牌 ION Life，是我們目前在 GrowGen 的領先照明品牌。但目前我們的自有品牌產品組合中的主導部分無疑是 Char Coir 和 Drop，今年遭受了巨大損失，但成長速度非常快。

So we believe that will stay somewhere like that 80%, 20%, maybe 90%, 10%, but much more on the consumable side than the durable side. The only thing on the durable side you'll see from GrowGen is a leading brand ION.

因此，我們認為，這一比例將保持在 80%、20%，甚至 90%、10% 左右，但消耗品方面的比例比耐用品方面的比例要高得多。您從 GrowGen 看到的唯一耐用的東西是領先品牌 ION。

And again, some people include fans in durables or in consumables. We do have a decent life -- we have decent fan business [GrowGen] has been selling for many years, and that's really the nine yards of what you're seeing. The only difference next year, we are bringing to market a single-tier bench from MMI. and we believe will make some inroads into the industry.

再次，有些人將風扇納入耐用品或消耗品中。我們確實過著體面的生活——我們有體面的粉絲業務[GrowGen]已經銷售了很多年，這確實是你所看到的九碼。明年唯一的區別是，我們將向市場推出 MMI 的單層長凳。我們相信將會在這個行業取得一些進展。

Okay. And then as we look at potential growth down the road, what are you seeing in kind of M&A market for stores? I know you said you're looking at that some of that are kind of closures right now. And what's kind of your strategy as far as mix that you see is in buying versus building right now?

好的。然後，當我們展望未來的潛在成長時，您對商店併購市場有何看法？我知道你說過你正在考慮其中一些現在是關閉的。就您目前看到的購買與建設的混合策略而言，您的策略是什麼？

Right now, we haven't been 100% concentrating on it, Mark. We've been getting our own house in order, especially with the launch of our ERP system. So we've had a quiet six months on the M&A side. But we do believe next year you will see us back on certainly nothing like you've seen in the past.

現在，我們還沒有 100% 集中精力，馬克。我們一直在把自己的房子收拾得井井有條，特別是隨著我們的 ERP 系統的啟動。因此，我們在併購方面度過了平靜的六個月。但我們確實相信，明年您會看到我們以前所未有的方式回歸。

We will do it slowly and deliberately, and depends what markets we're going into and what is there. We still do believe with our distribution centers working -- our commercial team out there. There's a lot of large commercial growers that don't come to the stores anymore, and we can ship out of our warehouses to them.

我們將緩慢而謹慎地進行這件事，這取決於我們要進入哪些市場以及那裡有什麼。我們仍然相信我們的配送中心正在運作——我們的商業團隊在那裡。有很多大型商業種植者不再來商店，我們可以從我們的倉庫發貨給他們。

So we're just balancing it right now. If you ask me, we'll probably add five stores to the portfolio next year, but you will see some conduct consolidations from GrowGen next year, dependent upon leases, but certainly nowhere in the realm of what you've seen this year.

所以我們現在只是在平衡它。如果你問我，明年我們可能會在投資組合中增加五家商店，但明年你會看到 GrowGen 進行一些整合，具體取決於租賃，但肯定不會像你今年看到的那樣。

Thank you.

謝謝。

And there are no further questions at this time. Ladies and gentlemen, this concludes your conference call for today. We thank you for joining, and you may now disconnect your lines. Thank you.

目前沒有其他問題。女士們、先生們，今天的電話會議到此結束。我們感謝您的加入，您現在可以斷開線路了。謝謝。