Nature's Sunshine Products Inc (NATR) 2023 Q1 法說會逐字稿

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Nature's Sunshine Financial Results for the First Quarter Ended March 31, 2023. Joining us today are Nature's Sunshine's CEO, Terrence Moorehead; CFO, Shane Jones; and General Counsel, Nate Brower. Following the remarks, we'll open the call for analyst questions.

大家下午好，感謝您參加今天的電話會議，討論 Nature's Sunshine 截至 2023 年 3 月 31 日的第一季度財務業績。今天加入我們的有 Nature's Sunshine 的首席執行官 Terrence Moorehead；首席財務官肖恩·瓊斯；和總法律顧問 Nate Brower。在發表評論之後，我們將開始徵集分析師問題。

Before we go further, I'd like to turn the call over to Mr. Brower as he reads the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Nate, please go ahead.

在我們進一步討論之前，我想把電話轉給 Brower 先生，因為他正在閱讀公司 1995 年《私人證券訴訟改革法案》含義內的安全港聲明，該聲明提供了有關前瞻性聲明的重要警告。內特，請繼續。

Thank you. Good afternoon, and thanks for joining our conference call to discuss our first quarter 2023 financial results. I'd like to remind everyone that this call is available for replay via telephonic dial-in through May 23, and via a live webcast that will be posted in the Investor Relations portion of our website at ir.naturesunshine.com.

謝謝。下午好，感謝您參加我們的電話會議，討論我們 2023 年第一季度的財務業績。我想提醒大家，在 5 月 23 日之前，可以通過電話撥入重播此電話會議，也可以通過將在我們網站 ir.naturesunshine.com 的投資者關係部分發布的網絡直播進行重播。

The information on this call contains forward-looking statements. These statements are often characterized by terminologies such as believe, hope, may, anticipate, expect, will and other similar expressions. Forward-looking statements are not guarantees of future performance, and the actual results may be materially different from the results implied by forward-looking statements.

本次電話會議的信息包含前瞻性陳述。這些陳述通常以相信、希望、可能、預期、期望、意願和其他類似表達等術語為特徵。前瞻性陳述並非對未來業績的保證，實際結果可能與前瞻性陳述所暗示的結果存在重大差異。

Factors that could cause results to differ materially from those implied herein include, but are not limited to, those factors disclosed in the company's annual report on Form 10-K under the caption Risk Factors and other reports filed with the Securities and Exchange Commission. The information on this call speaks only as of today's date, and the company disclaims any duty to update the information provided herein.

可能導致結果與此處暗示的結果存在重大差異的因素包括但不限於公司在 10-K 表格年度報告中風險因素標題下披露的那些因素以及向美國證券交易委員會提交的其他報告。本次電話會議的信息僅截至今天，公司不承擔更新此處提供的信息的任何義務。

Now I would like to turn the call over to the CEO of Nature's Sunshine, Terrence Moorehead. Terrence?

現在我想把電話轉給 Nature's Sunshine 的首席執行官 Terrence Moorehead。泰倫斯？

Thank you, Nate, and good afternoon, everyone. I want to thank you for taking time to join today's call to discuss our first quarter results. Today, I'll provide some context for our first quarter performance and offer some insights on how we believe the business is progressing. Shane will then walk you through the specifics of our financials in more detail.

謝謝你，內特，大家下午好。感謝您抽出時間參加今天的電話會議，討論我們的第一季度業績。今天，我將為我們第一季度的業績提供一些背景信息，並就我們認為業務進展情況提供一些見解。然後，Shane 將向您詳細介紹我們的財務細節。

We started the year on a strong note with reported first quarter net sales of $109 million or $113 million when excluding the impact of foreign exchange, which is a 2.4% increase versus prior year. Adjusted EBITDA was up 12%, coming in at $9.1 million. Overall, we're pleased with the momentum we're seeing as markets like Japan and Taiwan continued to deliver strong double-digit growth while most of our other markets delivered solid sequential improvements to the top line with meaningful progress and signs of stabilization in Central and Eastern Europe and digital initiatives starting to take hold in North America.

我們今年開局表現強勁，報告的第一季度淨銷售額為 1.09 億美元或 1.13 億美元（不包括外匯影響），比上年增長 2.4%。調整後的 EBITDA 增長了 12%，達到 910 萬美元。總體而言，我們對日本和台灣等市場繼續實現強勁的兩位數增長而我們看到的勢頭感到滿意，而我們的大多數其他市場在中部取得了有意義的進展和穩定跡象，實現了穩固的收入連續改善和東歐，數字計劃開始在北美站穩腳跟。

We continue to operate in an extremely challenging external environment, but the underlying fundamentals and strength of our business remained firmly intact. And the steps we've taken to create a more consumer-focused business continued to help us build momentum in the quarter.

我們繼續在極具挑戰性的外部環境中運營，但我們業務的基本面和實力仍然完好無損。我們為創建更加以消費者為中心的業務而採取的措施繼續幫助我們在本季度建立勢頭。

In Asia Pacific, we continued to deliver strong results with first quarter sales up 9% on a constant currency basis, driven by 58% growth in Taiwan and 21% growth in Japan on a local currency basis. Our investment in field activation help drive orders, stimulate new customer acquisition and offset lower sales in Korea and China. Remember, both Korea and China are still dealing with the residual effects of COVID restrictions and market closures that prevented them from conducting normal business activities. They've only recently been able to focus on restoring customer growth after the restrictions were lifted in late 2022. We're seeing encouraging signs as sales momentum continue to build each month in China as the country reopens. We're hopeful this trend continues and are focused on restoring growth in 2023.

在亞太地區，我們繼續取得強勁業績，第一季度銷售額按固定匯率計算增長 9%，這主要受台灣增長 58% 和日本增長 21% 的推動（按當地貨幣計算）。我們在現場激活方面的投資有助於推動訂單、刺激新客戶獲取並抵消韓國和中國較低的銷售額。請記住，韓國和中國仍在應對 COVID 限制和市場關閉的殘餘影響，這些影響使它們無法開展正常的商業活動。在 2022 年底取消限制後，他們最近才能夠專注於恢復客戶增長。我們看到了令人鼓舞的跡象，因為隨著中國重新開放，每個月的銷售勢頭都在繼續增強。我們希望這種趨勢能夠持續下去，並專注於在 2023 年恢復增長。

I believe it's worth noting that despite the challenges in Korea and China, Asia Pacific was still able to deliver a strong quarter due to the strength and diversity of our portfolio. And moving forward, we believe a continued focus on targeted new product introductions, next-generation branding and sustained investment in field activation will allow us to continue to drive profitable growth in the region.

我相信值得注意的是，儘管在韓國和中國面臨挑戰，但由於我們產品組合的實力和多樣性，亞太地區仍然能夠實現強勁的季度表現。展望未來，我們相信繼續專注於有針對性的新產品推出、下一代品牌推廣和對現場激活的持續投資將使我們能夠繼續推動該地區的盈利增長。

In Europe, sales were flat, up 0.3% versus prior year on a local currency basis. We continue to see signs of stabilization in Central and Eastern Europe, both in terms of how people are reconfiguring their lives and our ability to adapt to the changing situation on the ground. Our team has done an outstanding job driving orders and attracting new customers despite the challenging environment. As we move through 2023, we believe continued stability in Central and Eastern Europe, combined with strong execution of our field fundamentals will create opportunities for us to deliver modest growth in the region.

在歐洲，銷售額持平，按當地貨幣計算比上年增長 0.3%。我們繼續看到中歐和東歐穩定的跡象，無論是在人們如何重新配置他們的生活方面，還是在我們適應當地不斷變化的局勢的能力方面。儘管環境充滿挑戰，但我們的團隊在推動訂單和吸引新客戶方面做得非常出色。隨著我們邁向 2023 年，我們相信中歐和東歐的持續穩定，加上我們領域基本面的有力執行，將為我們在該地區實現適度增長創造機會。

In North America, fourth quarter sales were relatively flat, down 3% versus prior year, primarily driven by a decline in average order size. Consumers continued to offset inflationary pressures by purchasing smaller quantities, delaying purchases or trading down to cheaper brands. Our digital initiatives helped offset the negative sales impact from average order declines, delivering positive momentum from a 19% increase in new customer acquisition that led to strong growth in digital orders.

在北美，第四季度的銷售額相對持平，比去年同期下降 3%，這主要是受平均訂單量下降的推動。消費者繼續通過減少購買量、推遲購買或購買更便宜的品牌來抵消通脹壓力。我們的數字化舉措幫助抵消了平均訂單下降對銷售的負面影響，帶來了 19% 的新客戶獲取增長帶來的積極勢頭，從而導致數字化訂單的強勁增長。

What's more? Our Subscribe and Thrive Autoship program represented about 26% of sales and continued to support repeat purchases. As we move forward, we believe there's an opportunity to stabilize the North American business in the latter half of 2023 by expanding our digital footprint and increasing the number of nutrition health practitioners recommending our products, thus extending our leadership position as the #1 nutritional health practitioner brand.

更重要的是？我們的 Subscribe and Thrive Autoship 計劃約佔銷售額的 26%，並繼續支持重複購買。隨著我們的前進，我們相信有機會在 2023 年下半年通過擴大我們的數字足跡和增加推薦我們產品的營養健康從業者的數量來穩定北美業務，從而擴大我們作為營養健康第一的領導地位從業者品牌。

We also continued to make progress on our margin-enhancing and cost savings initiatives and have moved into the execution phase of the plan. As a reminder, the structural changes we're making to our product line and supply chain will provide significant improvements to gross margin, but many of the initiatives involve redesigning processes and revamping sourcing relationships, and this takes time. In the meantime, we're implementing strategic price increases in Asia Pacific, Europe, LatAm and North America to help offset the impact of inflationary headwinds and improve profitability.

我們還在提高利潤率和節約成本的舉措上繼續取得進展，並已進入計劃的執行階段。提醒一下，我們正在對產品線和供應鏈進行的結構性變革將顯著提高毛利率，但許多舉措涉及重新設計流程和改造採購關係，這需要時間。與此同時，我們正在亞太地區、歐洲、拉美和北美實施戰略性提價，以幫助抵消通脹逆風的影響並提高盈利能力。

Before I close, I'd like to briefly share some thoughts about our ESG program, where we recently released our second annual ESG report, which can be downloaded on the ESG section of our IR website. This year's report shows that the implementation of our ESG strategies, along with the commitment of our employees who are striving for excellence is allowing the sustainability and transparency mindset to permeate every aspect of our business. For example, in 2022, Nature's Sunshine achieved measurable progress on our top 5 sustainability goals, including: first, moving to 100% solar power at our U.S. manufacturing facility, reducing greenhouse gas emissions by about 35%; second, expanding recycling efforts at 3 of our U.S.-based distribution centers, reducing waste to landfill by almost 30%; third, moving to more sustainable packaging by increasing the use of post-consumer recycled plastics to nearly 40%; fourth, conducting our second annual greenhouse gas inventory to better understand emissions impact; and finally, fifth, optimizing and reducing shipments both internationally and domestically to further decrease emissions. As we continue to apply sustainable practices and processes in our sourcing, manufacturing and supply chain, I'm confident we'll have more progress to share.

在結束之前，我想簡要分享一下關於我們 ESG 計劃的一些想法，我們最近發布了第二份年度 ESG 報告，該報告可以在我們 IR 網站的 ESG 部分下載。今年的報告顯示，我們 ESG 戰略的實施，以及我們追求卓越的員工的承諾，使可持續發展和透明的思維方式滲透到我們業務的方方面面。例如，在 2022 年，Nature's Sunshine 在我們的前 5 大可持續發展目標方面取得了可衡量的進展，包括：首先，在我們的美國製造工廠轉向 100% 的太陽能，減少約 35% 的溫室氣體排放；其次，在我們位於美國的 3 個配送中心擴大回收工作，將填埋場的廢物減少近 30%；第三，通過將消費後回收塑料的使用增加到近 40%，轉向更可持續的包裝；第四，進行我們的第二次年度溫室氣體盤點，以更好地了解排放影響；最後，第五，優化和減少國際和國內的運輸，以進一步減少排放。隨著我們繼續在我們的採購、製造和供應鏈中應用可持續實踐和流程，我相信我們將有更多的進步可以分享。

In closing, the strategies that transformed our business have created a strong foundation for growth and continue to support our progress during the first quarter. Our brand power initiatives are delivering more powerful new products, more relevant messaging and fueling more meaningful customer growth. Our field energy initiatives are attracting a new younger generation of digitally enabled distributors, retailers and nutrition health practitioners. And our Digital First initiatives are building new customer acquisition and retention capabilities that will serve us for years to come.

最後，改變我們業務的戰略為增長奠定了堅實的基礎，並繼續支持我們在第一季度取得進展。我們的品牌力計劃正在提供更強大的新產品、更相關的信息並推動更有意義的客戶增長。我們的現場能源計劃正在吸引新一代的數字化分銷商、零售商和營養健康從業者。我們的數字優先計劃正在建立新的客戶獲取和保留能力，這將在未來幾年為我們服務。

In short, we continue to focus on improving consumer appeal, leveraging core capabilities, building competitive advantage and improving productivity to drive revenue and profitability. We're pleased with the progress we're making and the opportunities that lie ahead. Our growth strategies continue to gain traction, and I want to reiterate our passion, dedication and unwavering commitment to successfully navigating this unique period of market uncertainty. We remain focused on restoring growth and delivering low to mid-single-digit revenue growth for the year.

簡而言之，我們繼續專注於提高消費者吸引力、利用核心能力、建立競爭優勢和提高生產力以推動收入和盈利能力。我們對我們正在取得的進展和未來的機遇感到高興。我們的增長戰略繼續獲得牽引力，我想重申我們的熱情、奉獻精神和堅定不移的承諾，以成功度過這個獨特的市場不確定時期。我們仍然專注於恢復增長並實現今年中低個位數的收入增長。

With that, I'd like to turn the call over to our Chief Financial Officer, Shane Jones. Shane?

有了這個，我想把電話轉給我們的首席財務官 Shane Jones。謝恩？

Thank you, Terrence. It's great to be here. Let's jump right into results. Net sales in the first quarter were $108.6 million compared to $110.5 million in the year ago quarter. This 1.7% decline was largely driven by reduced sales in China and North America. As Terrence mentioned, excluding the $4.6 million unfavorable impact from foreign exchange rates, consolidated net sales increased 2.4% in the first quarter versus last year.

謝謝你，泰倫斯。很高興來到這裡。讓我們直接進入結果。第一季度的淨銷售額為 1.086 億美元，而去年同期為 1.105 億美元。這一 1.7% 的下降主要是由於中國和北美的銷售額下降所致。正如 Terrence 提到的那樣，排除 460 萬美元的匯率不利影響，第一季度的綜合淨銷售額比去年同期增長了 2.4%。

Gross margin in the first quarter was 70.8% compared to 68.8% a year ago. The increase was driven by prior year inventory valuation reserves taken as a result of the conflict between Russia and Ukraine, offset by cost increases related to inflation and unfavorable FX. We estimate the combination of FX and inflation decreased gross margin by nearly 100 basis points year-over-year in the quarter. Volume incentives as a percentage of net sales were 30.5% compared to 30.9% in the year ago quarter. The decrease is primarily due to changes in market mix.

第一季度的毛利率為 70.8%，而一年前為 68.8%。這一增長是由前一年因俄羅斯和烏克蘭之間的衝突而提取的庫存估值準備金推動的，但被與通貨膨脹和不利的外匯相關的成本增加所抵消。我們估計本季度外彙和通貨膨脹的組合使毛利率同比下降近 100 個基點。數量激勵占淨銷售額的百分比為 30.5%，而去年同期為 30.9%。下降的主要原因是市場結構的變化。

Selling, general and administrative expenses during the first quarter were $43.6 million, including onetime charges of $4.8 million related to a criminal social engineering scheme directed at one of our wholly-owned subsidiaries, and $1 million in professional fees related to the external investigation of that scheme, offset by a $0.7 million reduction related to a China VAT refund.

第一季度的銷售、一般和行政費用為 4360 萬美元，其中包括與針對我們全資子公司的犯罪社會工程計劃相關的一次性費用 480 萬美元，以及與該子公司的外部調查相關的專業費用 100 萬美元計劃，被與中國增值稅退稅相關的 70 萬美元減免所抵消。

Excluding these onetime charges, SG&A expenses during Q1 were $38.5 million compared to $40.6 million in the year ago quarter. This decrease was driven by lower service fees as a result of the decline in China's net sales and the timing of events and expenses of approximately $1.3 million that were delayed to the second quarter.

不包括這些一次性費用，第一季度的 SG&A 費用為 3850 萬美元，而去年同期為 4060 萬美元。這一下降是由於中國淨銷售額下降導致服務費減少，以及約 130 萬美元的活動和費用推遲到第二季度。

As a percentage of net sales, SG&A, excluding the onetime charges was 35.5% for the first quarter of 2023 compared to 36.8% in the year-ago quarter. Reflective of the impact of the onetime charges, operating income was $0.2 million or 0.2% of net sales compared to $1.3 million or 1.2% of net sales in prior year.

2023 年第一季度，不包括一次性費用的 SG&A 占淨銷售額的百分比為 35.5%，而去年同期為 36.8%。考慮到一次性費用的影響，營業收入為 20 萬美元或淨銷售額的 0.2%，而上一年為 130 萬美元或淨銷售額的 1.2%。

GAAP net income attributable to common shareholders for the first quarter was $0.9 million, or $0.04 per diluted share as compared to a loss of $3 million or $0.15 per diluted share in the year ago quarter. The higher GAAP net income is mostly driven by a valuation adjustment of certain deferred tax assets that occurred in our first quarter last year.

第一季度歸屬於普通股股東的 GAAP 淨收入為 90 萬美元，或稀釋後每股收益 0.04 美元，而去年同期虧損 300 萬美元或稀釋後每股收益 0.15 美元。較高的 GAAP 淨收入主要是由我們去年第一季度發生的某些遞延稅資產的估值調整推動的。

Adjusted EBITDA, as defined in our earnings release, was $9.1 million compared to $8.2 million in the first quarter of 2022. The increase was driven by $1.3 million of timing related to SG&A expenses.

根據我們的收益發布中的定義，調整後的 EBITDA 為 910 萬美元，而 2022 年第一季度為 820 萬美元。這一增長是由與 SG&A 費用相關的 130 萬美元時間推動的。

Our balance sheet remains clean with cash and cash equivalents increasing to $66 million and only $1 million of debt. Inventory declined slightly in Q1 compared to where we ended Q4.

我們的資產負債表保持乾淨，現金和現金等價物增加到 6600 萬美元，債務僅為 100 萬美元。與第四季度結束時相比，第一季度的庫存略有下降。

As part of our capital allocation plan, we continue to utilize our share repurchase authorization, buying 90,000 shares in the first quarter for $0.8 million or an average of $9.16 per share. As of March 31, 2023, $23.2 million remains of our $30 million share repurchase program. Looking beyond share repurchases. Our healthy capital allocation structure positions us well to continue our digital transformation and other strategic investments.

作為我們資本配置計劃的一部分，我們繼續利用我們的股票回購授權，在第一季度以 80 萬美元或平均每股 9.16 美元的價格購買了 90,000 股股票。截至 2023 年 3 月 31 日，我們 3000 萬美元的股票回購計劃中還有 2320 萬美元。超越股票回購。我們健康的資本配置結構使我們能夠繼續進行數字化轉型和其他戰略投資。

Now turning to our outlook. During Q1, we experienced sequential improvements across most of our markets, and continue to expect to report sales growth for the full year in the low to mid-single-digit range. As it relates to our second quarter, please note that we expect to ramp up expenses associated with our digital growth and other strategic initiatives. In addition, as previously mentioned, the timing of some events in Asia and North America have moved from Q1 into Q2. Therefore, we expect our SG&A in Q2 to be elevated versus Q1 and prior year. While these investments will result in a sequential decline in our adjusted EBITDA in Q2, we believe they are necessary to fuel our high-value growth initiatives and accelerate sales into the second half of this year and beyond.

現在轉向我們的前景。在第一季度，我們在大多數市場經歷了連續改善，並繼續期望報告全年的銷售增長在中低個位數範圍內。關於我們的第二季度，請注意我們預計會增加與我們的數字增長和其他戰略計劃相關的費用。此外，如前所述，亞洲和北美的一些活動時間已從第一季度移至第二季度。因此，我們預計第二季度的 SG&A 將高於第一季度和上一年。雖然這些投資將導致我們第二季度調整後的 EBITDA 連續下降，但我們認為它們對於推動我們的高價值增長計劃和加速今年下半年及以後的銷售是必要的。

With respect to gross margins, in the near term, we expect our supply chain initiatives and targeted price increases to be offset by continued inflation in foreign exchange headwinds. Therefore, Q2 gross margins are likely to be close to what we saw in Q1 with modest improvement in the second half of the year and meaningful improvements in 2024.

關於毛利率，在短期內，我們預計我們的供應鏈舉措和目標價格上漲將被外匯逆風的持續通脹所抵消。因此，第二季度的毛利率可能會接近我們在第一季度看到的水平，下半年會有小幅改善，2024 年會有顯著改善。

Overall, we're very excited about the long-term growth opportunities for the business. We remain committed to driving improved efficiency and profitability and are working to pursue opportunities to maximize shareholder value.

總的來說，我們對業務的長期增長機會感到非常興奮。我們仍然致力於提高效率和盈利能力，並努力尋找機會最大化股東價值。

Now I will turn the time back to the operator.

現在我將把時間還給接線員。

(Operator Instructions) Your first question comes from Linda Bolton-Weiser from Davidson.

（操作員說明）您的第一個問題來自 Davidson 的 Linda Bolton-Weiser。

Congratulations on a quarter that exceeded our expectations. I guess I had a question on just your SG&A. Thanks for all that detail regarding that. So you kind of said that your investment spending was kind of coming to an end. Can you just be a little more specific about that? Like can you clarify like what quarter you think that will kind of taper off? Just can you give a little bit more specifics around that?

祝賀這個季度超出了我們的預期。我想我只是對您的 SG&A 有疑問。感謝您提供的所有詳細信息。所以你有點說你的投資支出有點結束了。你能更具體一點嗎？你能澄清一下你認為哪個季度會逐漸減少嗎？你能提供更多細節嗎？

I'll start. Yes, I think, as our investment is not coming to an end, we're actually ramping it up. And so we pushed some things out of the first quarter and into Q1. So we'll be accelerating our investment in our digital initiatives and then some other kind of field activation initiatives. Shane can give you some more color commentary around that and we turn it over to Shane.

我會開始。是的，我認為，由於我們的投資還沒有結束，我們實際上正在加大投入。因此，我們將一些事情從第一季度推到了第一季度。因此，我們將加快對數字計劃的投資，然後是其他一些現場激活計劃。 Shane 可以就此為您提供更多色彩評論，我們將其轉交給 Shane。

Yes. So I think we mentioned there was some timing of some -- about $1.3 million of meetings and other expenses that were pushed from Q1 to Q2. So that's $1.3 million. And then in addition to that, there will be some additional expenses primarily for our digital initiatives, but also for some other field activation. And that amount will be in the range of $1 million to $1.5 million for the quarter.

是的。所以我認為我們提到了一些時間 - 大約 130 萬美元的會議和其他費用從第一季度推到了第二季度。所以這是 130 萬美元。除此之外，還將有一些額外費用主要用於我們的數字計劃，但也用於其他一些現場激活。本季度該金額將在 100 萬至 150 萬美元之間。

So we're really, again, just trying to invest in making certain that we have strong momentum going into the back half of the year and then into 2024, really driving some new customer growth initiatives that should help us on an ongoing basis. Does that help clear things up?

因此，我們真的再次嘗試投資以確保我們在今年下半年和 2024 年都有強勁的勢頭，真正推動一些新的客戶增長計劃，這些計劃應該會持續幫助我們。這有助於澄清問題嗎？

Yes. Sorry, if I misunderstood. So does it mean you said it was up sequentially in year-over-year. Is that in dollars and as a percentage of revenue, do you think?

是的。對不起，如果我誤解了。那麼這是否意味著你說它是按年順序上升的。你認為這是以美元和占收入的百分比為單位嗎？

Yes.

是的。

Okay. Got you. And then in terms of all these things that you're doing, the structural changes to your product line and supply chain and all that work. What does this mean for your innovation process? Because I know in the past, you've had a pretty good flow of new products and things that you're bringing to market. Does this change that? Or do you still keep up with innovation while you're making these other changes?

好的。明白了然後就你正在做的所有這些事情而言，你的產品線和供應鏈的結構變化以及所有這些工作。這對您的創新過程意味著什麼？因為我知道在過去，你有大量的新產品和你正在推向市場的東西。這會改變嗎？或者您在進行這些其他更改時是否仍然跟上創新？

Yes. Our innovation, we've changed -- if you'll remember a couple of quarters ago, I started talking about our master branding strategy and putting more firepower behind some kind of a fewer number of kind of large and robust brands. So that's some of what you're going to see in the back half of the year, an investment in kind of some really foundational products for us coming online. And then our investment in those brands to really support them. And so we don't want to have a kind of a launch and abandoned strategy or just start dropping other products into what is already a large product line. We really want to focus on having some very meaningful and impactful products going into the line in 2023 and then again in 2024. So the pipeline should continue to be solid. But again, focusing on what I would consider to be maybe larger, more impactful products that we'll continue to invest on as a foundational principle going forward.

是的。我們的創新，我們已經改變——如果你還記得幾個季度前，我開始談論我們的主品牌戰略，並在一些數量較少的大型和強大品牌背後投入更多的火力。所以這就是你將在今年下半年看到的一些東西，投資於一些真正基礎的產品，讓我們上線。然後我們對這些品牌的投資以真正支持他們。因此，我們不希望有一種發布和放棄的策略，或者只是開始將其他產品放入已經很龐大的產品線中。我們真的想專注於讓一些非常有意義和有影響力的產品在 2023 年進入生產線，然後在 2024 年再次進入生產線。因此管道應該繼續穩固。但同樣，關注我認為可能更大、更有影響力的產品，我們將繼續投資這些產品，作為未來的基本原則。

Okay. And then I was just curious about North America and your commentary was very similar to what it has been in terms of lower average order values and things like that. Is there any changes that you can comment though? I mean, are things really the same? Or do you think things are getting a little better or a little worse. Is there any more color you can kind of give on that market?

好的。然後我只是對北美感到好奇，你的評論與它在較低的平均訂單價值等方面的評論非常相似。不過，您是否可以評論任何更改？我的意思是，事情真的一樣嗎？還是您認為事情正在變得更好或更糟。你能在那個市場上提供更多顏色嗎？

Yes. I think things are definitely getting better. We see our legacy business is -- I think it continues to age. But we are bringing in new younger customers to a much larger extent, largely through our digital initiatives and through our affiliate initiatives that are really just starting to build momentum. So I think you're just -- you're seeing a lot more kind of activation on that digital side of the business and on the affiliate side of the business. And we're quite -- I think, quite optimistic about the road that lies ahead there.

是的。我認為情況肯定會好轉。我們看到我們的傳統業務——我認為它會繼續老化。但我們正在更大程度上吸引新的年輕客戶，主要是通過我們的數字計劃和我們剛剛開始建立勢頭的附屬計劃。所以我認為你只是 - 你在業務的數字方面和業務的附屬方面看到了更多的激活。我們非常——我認為，對前面的道路非常樂觀。

Okay. And then just in terms of Asia. Again, you've had a couple of markets that are really growing quite well. Is the issue in Korea, I mean, is it similar to just the COVID situation and lockdowns and things just kind of becoming more normalized? Or are there other things still that you think need to be done to kind of get the Korean market back to growth phase?

好的。然後就亞洲而言。同樣，你有幾個市場確實增長得很好。我的意思是，韓國的問題是否與 COVID 情況和封鎖以及事情變得更加正常化類似？或者您認為還有其他事情需要做才能讓韓國市場回到增長階段嗎？

I think right now, the issue there is they were closed down for 2 years essentially. And their installed base of customers and their ability to attract new customers over that period. Just diluted some of their effectiveness. So what you saw in the back end of 2022 was us selling probably more product to the same people as opposed to really driving significant levels of new customer growth. And so going forward, I think the challenge for them is going to be getting back to that new customer acquisition and customer growth that they were so good at for so long. They really are just coming out of seclusion and starting to get their legs underneath them. So the team has a pretty significant field activation investments that they're putting in place. They've historically had very good field fundamentals. Again, during the closures, I think those fundamentals were stunted. But they've built some new digital capabilities. They're using a new digital toolkit. We're going to be launching some new -- a new website for them that's going to actually represent our new global digital platforms. They'll be testing it out first, actually in Korea. So I think the runway for the market is still good. It's just going to take them some time to get their legs back underneath them.

我認為現在的問題是他們基本上關閉了 2 年。以及他們在此期間的客戶群和吸引新客戶的能力。只是稀釋了它們的一些功效。因此，您在 2022 年底看到的是，我們可能會向同一群人銷售更多產品，而不是真正推動顯著水平的新客戶增長。因此，展望未來，我認為他們面臨的挑戰將是回到他們長期以來一直擅長的新客戶獲取和客戶增長上。他們真的剛剛走出隱居，開始把腿放在身下。因此，該團隊正在進行相當重要的現場激活投資。他們在歷史上擁有非常好的領域基礎。同樣，在關閉期間，我認為這些基本面受到了阻礙。但他們已經建立了一些新的數字功能。他們正在使用新的數字工具包。我們將為他們推出一些新網站——一個新網站，該網站將真正代表我們新的全球數字平台。他們將首先進行測試，實際上是在韓國。所以我認為市場的跑道還是不錯的。他們只是需要一些時間才能讓他們的腿回到身下。

Okay. And then let's see -- I think I heard you said you did do some share repurchase in the quarter. Does that signal that you are expecting positive free cash flow in the year?

好的。然後讓我們看看——我想我聽說你說你在本季度確實進行了一些股票回購。這是否表明您預計今年的自由現金流為正？

Yes.

是的。

Absolutely. Yes.

絕對地。是的。

Okay. That's good. And then just one last thing. Can you just clarify your guidance for low to mid-single digit revenue growth, that's excluding currency effects, right?

好的。那挺好的。然後是最後一件事。您能否澄清一下您對中低個位數收入增長的指導，這不包括貨幣影響，對嗎？

That's correct.

這是正確的。

(Operator Instructions) There are no further questions at this time. Please proceed.

（操作員說明）目前沒有其他問題。請繼續。

Okay. Well, thank you, and we'd like to thank everybody for listening to today's call, and we look forward to speaking with you when we report our second quarter 2023 results in August of this year. Thanks again for joining us. And again, we look forward to hearing from you soon. Take care.

好的。嗯，謝謝，我們要感謝大家聽今天的電話會議，我們期待在今年 8 月報告 2023 年第二季度業績時與您交談。再次感謝您加入我們。再一次，我們期待很快收到您的來信。小心。

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

女士們，先生們，今天的電話會議到此結束。我們感謝您的參與，並請您斷開線路。