Tupperware Brands Corp (TUP) 2022 Q4 法說會逐字稿

Greetings, and welcome to the Tupperware Brands Corporation Fourth Quarter 2022 Earnings Conference Call. Please note, today's conference is being recorded. (Operator Instructions) At this time, I will turn the conference over to Doug Lane, Vice President, Investor Relations and Strategy. Mr. Lane, you may begin.

您好，歡迎來到特百惠品牌公司 2022 年第四季度收益電話會議。請注意，今天的會議正在錄製中。 （操作員說明）此時，我將把會議轉交給投資者關係和戰略副總裁 Doug Lane。萊恩先生，您可以開始了。

Thank you, operator. Good morning, and welcome to Tupperware Brands Fourth Quarter 2022 Earnings Conference Call. Joining me today are Miguel Fernandez, President and CEO; and Mariela Matute, CFO. We will be available for Q&A following our prepared remarks. Earlier this morning, we issued a press release announcing our preliminary financial results for the fourth quarter of 2022, which can be found on our Investor Relations website. Today's release is preliminary as management completes the year-end procedures and external audit with open items mainly related to tax matters.

謝謝你，運營商。早上好，歡迎來到特百惠品牌 2022 年第四季度收益電話會議。今天加入我的是總裁兼首席執行官 Miguel Fernandez；和首席財務官 Mariela Matute。我們將在準備好的發言後進行問答。今天上午早些時候，我們發布了一份新聞稿，宣布了我們 2022 年第四季度的初步財務業績，可以在我們的投資者關係網站上找到。今天的發布是初步的，因為管理層完成了主要與稅務事項相關的未清項目的年終程序和外部審計。

Before we get started, please note that beginning with the 2023 1st quarter earnings release, we will be changing our reporting schedule. We will continue to hold our conference call on Wednesday morning at 8:30 a.m. Eastern Time, and the 2023 1st quarter is tentatively scheduled for May 10 However, we will issue our earnings release tonight before after the market close. We will simultaneously publish our management commentary on our website. That way, everyone will have plenty of time to digest the news and update models before the call. It would also allow us to jump right into Q&A on the call after brief introductory remarks.

在開始之前，請注意，從 2023 年第一季度財報發布開始，我們將更改報告時間表。我們將繼續在東部時間週三上午 8:30 舉行電話會議，2023 年第一季度暫定於 5 月 10 日舉行，但我們將在今晚收市前發布財報。我們將同時在我們的網站上發布我們的管理評論。這樣一來，每個人在通話前都有充足的時間來消化新聞和更新模型。它還可以讓我們在簡短的介紹性發言後直接進入電話問答環節。

Now, back to this quarter just reported. Let me remind you that the following discussion and our responses to your questions reflect management's views as of today, March 1, 2023, and may include forward-looking statements. Actual results may differ materially from such statements.

現在，回到剛剛報告的這個季度。讓我提醒您，以下討論和我們對您問題的回答反映了管理層截至 2023 年 3 月 1 日的觀點，並且可能包含前瞻性陳述。實際結果可能與此類陳述存在重大差異。

Additional information about factors that could potentially impact our financial results will be included in our Form 10-K for the 2022 fiscal year subsequent filings with the SEC and in our press release filed this morning. Please review the forward-looking statement disclosure on Page 5 of today's press release.

有關可能影響我們財務業績的因素的更多信息將包含在我們隨後向美國證券交易委員會提交的 2022 財年 10-K 表格以及我們今天上午提交的新聞稿中。請查看今天新聞稿第 5 頁的前瞻性聲明披露。

Please note that some references are being made on a constant currency basis which reflects the application of current period foreign exchange rate to any prior period results, enabling comparisons, excluding the impact of foreign currency exchange rate fluctuations. Please also note that all references unless otherwise noted, are being made on a continuing operations basis. During this call, we'll discuss certain non-GAAP measures, including those we refer to as normalized measures.

請注意，某些參考是在固定貨幣基礎上進行的，這反映了當前期間外匯匯率對任何前期結果的應用，以便進行比較，排除了外幣匯率波動的影響。另請注意，除非另有說明，否則所有參考資料均以持續運營為基礎。在這次電話會議中，我們將討論某些非 GAAP 指標，包括我們稱為標準化指標的指標。

Additional disclosures regarding these non-GAAP measures, including explanations and reconciliations of these measures to the most comparable GAAP measures can be found in today's press release. Finally, a replay of this call will be available on our Investor Relations website later today. And with that, let me turn the call over to you, Miguel.

有關這些非 GAAP 措施的額外披露，包括這些措施與最具可比性的 GAAP 措施的解釋和對賬，請參閱今天的新聞稿。最後，今天晚些時候將在我們的投資者關係網站上提供此次電話會議的重播。有了這個，讓我把電話轉給你，米格爾。

Thank you Doug. Good morning, everyone, and welcome to our fourth quarter call. 2022 proved to be a much more challenging year than we could ever expected. We started that year bullish on our turnaround efforts in our direct selling business. Exact to spend into new channels of distribution and cautiously optimistic that the search of inflation in 2021 was behind us. That confidence in our early outlook of the year led us to authorize a $75 million stock buyback in February.

謝謝道格。大家早上好，歡迎來到我們的第四季度電話會議。事實證明，2022 年是比我們預期的更具挑戰性的一年。那年開始，我們看好我們在直銷業務中的扭虧為盈。準確地投入到新的分銷渠道中，並對 2021 年的通脹趨勢已經過去持謹慎樂觀態度。對我們今年早期展望的信心促使我們在 2 月份授權進行 7500 萬美元的股票回購。

Well, as we turned out our initial positive outlook for 2022 change quickly. Our excitement in general was dampened by the February contract in Europe in the COVID lockdown in China in March. These events, coupled with ongoing inflationary pressures, strengthening dollar and rising interest rates had a major impact on consumers globally and also in our financial performance throughout 2022. But as in the past, we reacted quickly to accept the challenges. We made meaningful leadership changes midyear. In the second half of the year, we took further rightsizing efforts, implementing further improvements in our direct selling compensation plans and took additional pricing actions, all while staying focused on executing our channel expansion cans.

好吧，事實證明，我們對 2022 年最初的積極展望很快發生了變化。總體而言，我們的興奮情緒因 3 月份中國因 COVID 封鎖而在歐洲簽訂的 2 月份合同而受到抑制。這些事件，加上持續的通脹壓力、美元走強和利率上升，對全球消費者以及我們 2022 年的財務業績產生了重大影響。但與過去一樣，我們迅速做出反應，接受挑戰。我們在年中進行了有意義的領導層變動。下半年，我們進一步調整規模，進一步改進我們的直銷補償計劃，並採取額外的定價措施，同時繼續專注於執行我們的渠道擴張。

2022 as a turnout was a real test of our results to turn around this account company and expanding to new channels and make the company as big as a brand. In a moment, we will summarize 2022 but let me first highlight our recent accomplishments that we'll continue to build the foundation for a more successful future. First, increased financial flexibility. Due to our operating performance last year, our financial leverage is much higher than we would like. Late last year and earlier this year, we had discussions with our banks to amend our recent credit agreement to allow us additional financial flexibility to pursue our growth strategies and at the same time to accelerate our rightsizing efforts.

2022 年的投票率是對我們扭轉這家客戶公司並擴展到新渠道並使公司像品牌一樣大的結果的真正考驗。稍後，我們將總結 2022 年，但讓我首先強調我們最近取得的成就，我們將繼續為更成功的未來奠定基礎。首先，增加財務靈活性。由於我們去年的經營業績，我們的財務槓桿比我們希望的要高得多。去年年底和今年早些時候，我們與我們的銀行進行了討論，以修改我們最近的信貸協議，讓我們有更多的財務靈活性來實施我們的增長戰略，同時加快我們的精簡工作。

The tax recently came to a successful completion, and we appreciate the support our lenders continue to provide us even as market conditions became more difficult. Second, channel expansion. Despite the difficult external environment we faced throughout 2022, we did not allow those unexpected challenges to derail us from our most important growth initiatives. We successfully launched national distribution in 1,900 Target stores in the U.S. in early October. The results exceeded our expectations as we exited the quarter with a 10% category market share.

稅收最近成功完成，我們感謝我們的貸方在市場條件變得更加困難的情況下繼續為我們提供的支持。二是渠道拓展。儘管我們在整個 2022 年面臨艱難的外部環境，但我們沒有讓這些意想不到的挑戰使我們偏離最重要的增長計劃。我們於 10 月初在美國的 1,900 家 Target 商店成功啟動了全國分銷。結果超出了我們的預期，因為我們以 10% 的品類市場份額結束了本季度。

So we are carrying good momentum into 2023. While still small, B2B sales grew strongly in the double digits in China last year despite difficult conditions out there, and we look for another strong year in 2023. In fact, the number of our markets reporting B2B activity in 2022 was 22 markets. In total, we added 50 retail chain customers around the world. As you may imagine, selling products into retail chain is a very different proposition from operating a direct selling distribution model.

因此，我們在 2023 年保持著良好的勢頭。雖然仍然很小，但去年中國的 B2B 銷售額儘管困難重重，仍以兩位數的速度強勁增長，我們期待 2023 年再創佳績。事實上，我們報告的市場數量2022 年的 B2B 活動是 22 個市場。我們在全球總共增加了 50 家零售連鎖客戶。正如您所想像的那樣，將產品銷售到零售連鎖店與經營直銷分銷模式截然不同。

As such, we're building a new consumer-facing company within our legacy direct selling consumer push company. Perhaps no better showcase for our growth strategy was the success we had in Korea last year. Korea is among the most advanced markets in the process of building an omnichannel ecosystem. In 2022, Korea surpassed Indonesia, our third largest market in the Asia Pacific region behind China and Malaysia. In total, Korea grew 16% last year in constant currency. As core sales increase in middle single digits and B2B expansion, particularly in TV shopping, added over 10 percentage points to growth.

因此，我們正在我們傳統的直銷消費者推動公司內建立一個面向消費者的新公司。也許沒有比去年在韓國取得的成功更好地展示我們的增長戰略了。在構建全渠道生態系統的過程中，韓國是最先進的市場之一。 2022 年，韓國超過印度尼西亞，成為我們在亞太地區僅次於中國和馬來西亞的第三大市場。按固定匯率計算，韓國去年總計增長了 16%。隨著核心銷售額以中等個位數增長和 B2B 擴張，特別是在電視購物方面，增長超過 10 個百分點。

We're learning from this success and are sharing best practices in many markets around the world. Throughout this 2023. While it's still early days, these initiatives sell validate that our growth strategy to expand the consumer access to our products beyond the direction distribution channel. Third, the new product introductions. We have many successful introductions over the past couple of years that really gained traction last year. It's our goal to continue to move into new product categories where we believe iconic Tupperware brand may resonate with consumers.

我們正在從這一成功中學習，並在全球許多市場分享最佳實踐。在整個 2023 年。雖然現在還處於早期階段，但這些舉措證明了我們的增長戰略是將消費者對我們產品的訪問範圍擴大到直接分銷渠道之外。三是新產品推介。在過去的幾年中，我們推出了許多成功的產品，這些產品在去年真正獲得了關注。我們的目標是繼續進入新的產品類別，我們相信標誌性的特百惠品牌可能會引起消費者的共鳴。

Our entry to small appliances was highlighted with airfryer. We launched airfryer late 2021 in China. Due to its success, we expanded its launch to Philippines, India, Japan, EMEA, showing similar success. Our most successful product reduction last year was a supersonic chopper compound, which uses a full course quickly and conveniently to chop up herbs and vegetables. New products accounted for 14% of sales last year. This year, we're moving into new product categories. First will be the cast iron cookware such as Dutch Ovens. Second, we will introduce a unique reusable silicon bag that are decided to replace the single-use plastic bags.

airfryer 突出了我們對小家電的進入。我們於 2021 年底在中國推出了空氣炸鍋。由於它的成功，我們將其發布擴展到菲律賓、印度、日本、歐洲、中東和非洲，並取得了類似的成功。我們去年最成功的產品還原是一種超音速切碎機化合物，它使用完整的過程快速方便地切碎香草和蔬菜。新產品佔去年銷售額的14%。今年，我們將進入新的產品類別。首先是鑄鐵炊具，例如 Dutch Ovens。其次，我們將介紹一種獨特的可重複使用的矽膠袋，它決定取代一次性塑料袋。

Our system has an innovative seal system that we have filed patents for. Every year, over 500 billion single-use plastic bags are used worldwide, which is over 1 million bags every unit. At Tupperware, we're looking to reduce single-use plastic anywhere we can. Fourth, rightsizing. As we said in our last call, we look to spend an additional $100 million in rendering cost over the next 3 years. In fact, we're running slightly ahead of scale. By the end of the program, we expect to realize more than $60 million in annual cost savings.

我們的系統有一個創新的密封系統，我們已經申請了專利。每年全球使用的一次性塑料袋超過5000億個，即每個袋子超過100萬個。在特百惠，我們力求盡可能減少一次性塑料製品的使用。第四，精簡。正如我們在上次電話會議中所說，我們希望在未來 3 年內額外花費 1 億美元用於渲染成本。事實上，我們的規模略有超前。到該計劃結束時，我們預計每年可節省超過 6000 萬美元的成本。

We remain committed to rightsizing the business in further manufacturing and supply chain optimization. And fifth, new leadership. Last spring, we hired a new CFO to help us better navigate our turnaround plans. In the summer, we hired a new Executive Vice President of Supply Chain to help us optimize our supply chain network and improve service levels. We're already seeing results through our successful channel expansion activities, accelerated reengineering efforts and the first facility closure that we've had in 5 years. And finally, last quarter, we established a new position of Chief Commercial Officer, who provides holistics oversight of our commercial growth of lands while delayering and simplifying our go-to-market infrastructure.

我們仍然致力於在進一步製造和供應鏈優化方面對業務進行合理調整。第五，新的領導層。去年春天，我們聘請了一位新的首席財務官來幫助我們更好地制定周轉計劃。今年夏天，我們聘請了新的供應鏈執行副總裁，幫助我們優化供應鍊網絡並提高服務水平。我們已經通過成功的渠道擴張活動、加速的再設計工作以及 5 年來的首次設施關閉看到了成果。最後，上個季度，我們設立了首席商務官的新職位，負責全面監督我們的土地商業增長，同時延遲和簡化我們的上市基礎設施。

Now let's turn to where we plan to focus our 2023 efforts as we pivot towards the next post pandemic phase of our plan. First, in our direct selling business, we're facing out the virtual storage kit that we introduced in the early stages of a pandemic. At that time, it was a way to keep the recurring engine running during the time of limited in-person activities. However, given this relative inexpensive price point, we found that we were attracting more discount buyers with lower retention to the brand.

現在讓我們轉向我們計劃在 2023 年重點關注的地方，因為我們將轉向我們計劃的下一個大流行後階段。首先，在我們的直銷業務中，我們面臨著我們在大流行初期推出的虛擬存儲套件。當時，這是一種在有限的面對面活動期間保持循環引擎運行的方法。然而，鑑於這個相對便宜的價格點，我們發現我們吸引了更多對品牌保留率較低的折扣買家。

With the elimination of the virtual kit, we expect the pendulum to readily send back to business builders, who should also benefit from the recent return in-person events since that's where recognition and training is most effective. Well, it is early days. We have already seen some favorable movement in those selling markets where we eliminated the virtual kits. We also expect the post-pandemic phase to benefit from increased consumer mobility. Many markets in Asia, particularly China, operated studio models where -- are reliant on consumer foot traffic.

隨著虛擬工具包的取消，我們希望鐘擺能夠很容易地返回給業務建設者，他們也應該從最近的回歸現場活動中受益，因為這是認可和培訓最有效的地方。好吧，現在還為時過早。我們已經在那些我們取消了虛擬套件的銷售市場中看到了一些有利的變化。我們還預計大流行後階段將受益於消費者流動性的增加。亞洲的許多市場，尤其是中國，經營工作室模型的地方——依賴於消費者的客流量。

In these locations, consumer into our location is run by a member of our sales force to purchase our products. China had a very difficult 2022. Sales were down 27% on the year as Zero COVID policy impacted consumer access to our products. Now that the government has reversed course, we expect the business in China to improve as the year progresses, but market conditions there remain uncertain. One bright spot has been the adoption of our digital tools eTup, during the lockdowns, making China among the most advanced markets with regards to the utilization. Our initiatives for 2023 in China include accelerating the digitilization trend to improve retention and productivity, new products launches such as casserole and cookware coder on-the-move drinking bottles and small appliances.

在這些地點，消費者進入我們的地點是由我們的銷售人員經營的，以購買我們的產品。中國在 2022 年非常艱難。銷售額同比下降 27%，因為零 COVID 政策影響了消費者對我們產品的訪問。既然政府改變了方向，我們預計中國的業務會隨著時間的推移而改善，但市場狀況仍不確定。一個亮點是在封鎖期間採用了我們的數字工具 eTup，這使得中國在使用方面成為最先進的市場之一。我們 2023 年在中國的舉措包括加速數字化趨勢以提高保留率和生產力，推出新產品，例如砂鍋和炊具編碼器移動飲料瓶和小家電。

B2B channel expansion, including e-commerce, and optimizing our cost structure and working capital to improve cash flow. Elsewhere among our big 4, the U.S. and Mexico were impacted by nonrecurring and overall sales force productivity as well as lower volumes due to price increases. The U.S. was further impacted by a longer than anticipated adoption of our compensation plan chains. Sales in the U.S. were down 19% in 2022 and Mexico was down 7%.

B2B 渠道擴張，包括電子商務，並優化我們的成本結構和營運資金以改善現金流。在我們四大公司的其他地方，美國和墨西哥受到非經常性和整體銷售人員生產力以及價格上漲導致的銷量下降的影響。美國受到我們薪酬計劃鏈採用時間比預期更長的進一步影響。 2022 年美國的銷售額下降了 19%，墨西哥下降了 7%。

Our focus for 2023 in the U.S. will be twofold. First, improved service, both in product delivery and systems reliability. While we're entering the year with a smaller sales force, we have created a space for new members to make money from day 1. So we think retention and productivity will improve. Additionally, we believe that a greater number of in-person events, coupled with the promotional activity that increases the income to the lower level sales force members should help drive top line growth this year.

我們 2023 年在美國的重點將是雙重的。首先，改進服務，包括產品交付和系統可靠性。雖然我們以較小的銷售隊伍進入新的一年，但我們為新成員從第一天起就創造了一個賺錢的空間。因此我們認為保留率和生產力將會提高。此外，我們認為，更多的現場活動，加上增加低級別銷售人員收入的促銷活動，應該有助於推動今年的收入增長。

Second, we will continue to invest in our B2B efforts in retail and home TV shopping. In Mexico, we will introduce new products in our core food storage categories, such as packable freezer mates and cold savers as well as one touch fresh food storage containers with easy to close and open it, which is one of our newest global products.

其次，我們將繼續投資於零售和家庭電視購物方面的 B2B 業務。在墨西哥，我們將在我們的核心食品儲存類別中推出新產品，例如可包裝的冷凍伴侶和冷藏箱，以及易於關閉和打開的一觸式新鮮食品儲存容器，這是我們最新的全球產品之一。

This, along with an improved service should drive growth towards the second half of the year. Brazil ended a year with a good momentum, as sales were up 15% in the fourth quarter, which we're currently expecting to carry into 2023 for the direct selling business. Added to that, Brazil is pursuing opportunities in e-commerce loyalty programs, Tupperware stores, premium brand partnerships and retail B2B. Finally, it's worth noting that Brazil and Mexico together account for over eight quarter of sales and even more of our operating cash flow and they remain very healthy and profitable direct selling business. Now over to you, Mariela.

這與改進的服務一起將推動今年下半年的增長。巴西以良好勢頭結束了一年，第四季度銷售額增長了 15%，我們目前預計直銷業務將延續到 2023 年。除此之外，巴西還在電子商務忠誠度計劃、特百惠商店、優質品牌合作夥伴關係和零售 B2B 領域尋求機會。最後，值得注意的是，巴西和墨西哥合計佔銷售額的四分之一以上，占我們經營現金流的更多，它們仍然是非常健康且盈利的直銷業務。現在輪到你了，瑪麗埃拉。

Thank you, Miguel. And good morning, everybody. Before I get started, please note that our results announced today are preliminary as we complete our year-end procedures and external audit with open items related to tax. We plan to file our 10-K before the deadline of March 16. For the full year 2022, dollar reported sales declined 18%, to $1.3 billion.

謝謝你，米格爾。大家早上好。在我開始之前，請注意我們今天公佈的結果是初步的，因為我們完成了年終程序和與稅收相關的未清項目的外部審計。我們計劃在 3 月 16 日截止日期之前提交我們的 10-K。對於 2022 年全年，美元報告的銷售額下降了 18%，至 13 億美元。

Excluding unfavorable currency exchange, sales declined 14%. Pricing accounted for an 8% benefit which was more than offset by a decline in unit volume of approximately 22%. 2022 also had an extra week, which provided for about 1% of growth. By region, Asia Pacific declined 19% in local currency, mainly related to lower recruiting and overall sales force activity. COVID lockdowns in China, logistics delays that impact our product availability, higher prices and lower consumer spending in Malaysia caused in part by removal of government subsidy in Food essentials.

排除不利的貨幣兌換，銷售額下降了 14%。定價帶來了 8% 的收益，但被約 22% 的單位銷量下降所抵消。 2022 年也多了一周，提供了大約 1% 的增長。按地區劃分，亞太地區以當地貨幣計算下降了 19%，這主要與招聘和整體銷售人員活動減少有關。中國的 COVID 封鎖、物流延誤影響了我們的產品供應、馬來西亞價格上漲和消費者支出減少，部分原因是政府取消了對食品必需品的補貼。

These were partially offset by strong performance in Korea, as Miguel highlighted earlier. Sales in Europe decreased 23% in local currency, driven by lower sales force activity and lower consumer spending. Because of the continued deterioration of consumer sentiment, higher inflation, higher gas prices and price increases. In addition, the segment was negatively impacted by timing of our B2B business transactions, mainly in Germany.

正如 Miguel 早些時候強調的那樣，這些被韓國的強勁表現部分抵消了。受銷售人員活動減少和消費者支出減少的推動，歐洲銷售額以當地貨幣計算下降了 23%。由於消費者情緒持續惡化，通貨膨脹率上升，天然氣價格和價格上漲。此外，該部門受到我們 B2B 業務交易時間的負面影響，主要是在德國。

We are encouraged that Europe is showing signs of stabilizing since the end of 2022, beating our internal forecast and started 2023 in a similar fashion. North America sales decreased 16%, primarily mid to lower recruiting and overall sales for productivity. Longer-than-anticipated adoption of compensation plan changes in the United States and Canada and negative impact from price increases. We expect that the improving economic profile we began to see in Q4 will sustain in 2023.

我們感到鼓舞的是，歐洲自 2022 年底以來顯示出企穩跡象，超過了我們的內部預測，並以類似的方式開始了 2023 年。北美銷售額下降 16%，主要是中低端招聘和整體銷售額的生產力。美國和加拿大採用薪酬計劃變化的時間比預期的要長，價格上漲帶來負面影響。我們預計我們在第四季度開始看到的經濟狀況改善將在 2023 年持續。

Thus America self increased 10% in local currency driven primarily by Argentina, from a larger total and active sales force. Including from higher retention, higher productivity as well as higher prices due to inflation. With the plant in Argentina and the momentum in Brazil coming out of the fourth quarter, we are optimistic about this region in 2023. Company-wide, we closed 2022 with a max 18% lower active sales force than we did in 2021, which will continue to pressure the top line for our direct selling business.

因此，美國自身增長了 10%（以當地貨幣計算），這主要是由阿根廷推動的，主要來自更大的總銷售隊伍和活躍的銷售隊伍。包括更高的保留率、更高的生產率以及通貨膨脹導致的更高價格。隨著阿根廷工廠和巴西第四季度的發展勢頭，我們對該地區 2023 年持樂觀態度。在全公司範圍內，我們在 2022 年結束時的活躍銷售人員最多比 2021 年減少 18%，這將繼續給我們的直銷業務帶來壓力。

While this should be somewhat offset by expansion elsewhere those B2B channels are still relatively small as a percent of our overall business. Gross margin in 2022 was 54%. A decrease of 200 basis points from 2021. The decrease is primarily due to higher manufacturing variances and inefficiencies due to the lower sales volume, higher rising costs and other inflationary pressures as well as adverse product mix, partially offset by the benefit from price increases.

雖然這應該被其他地方的擴張所抵消，但這些 B2B 渠道在我們整體業務中所佔的比例仍然相對較小。 2022 年的毛利率為 54%。比 2021 年減少 200 個基點。減少的主要原因是由於銷量下降、成本上升和其他通脹壓力增加以及產品組合不利導致製造差異和效率低下，部分被價格上漲帶來的好處所抵消。

Gross margins were up year-on-year in the fourth quarter for the first time in 6 quarters as the benefits from our pricing actions throughout the year began to be realized. Selling, general and administrative expenses, SG&A, as a percentage of sales was 57% in 2022 compared with 52% in 2021. And contributing about 500 basis points increase at incremental investments in our growth initiatives, such as B2B expansion in the U.S. on the assumption of fixed cost on the lower sales and higher selling costs with a return to in personal events and meetings for the sales force.

毛利率在第四季度實現了 6 個季度以來的首次同比增長，因為我們全年定價行動的好處開始顯現。銷售、一般和行政費用、SG&A 佔銷售額的百分比在 2022 年為 57%，而 2021 年為 52%。我們增長計劃的增量投資增加了約 500 個基點，例如美國的 B2B 擴張假設銷售額下降和銷售成本上升導致銷售人員參加個人活動和會議時的固定成本。

Interest expense decreased by $3.5 million in 2022 to $31.7 million. The change in interest expense is related to a slight decrease in the company borrowing as well as a decrease of 6 percentage points in the interest rate of the term loans as a result of the debt refinancing in late 2021. We note that the interest rates have risen in the second half of 2022. And the basis point spread on the debt has also increased as a result of the pricing from our recently amended credit agreement.

2022 年利息支出減少 350 萬美元至 3170 萬美元。利息支出的變化與公司借款略有減少以及 2021 年底債務再融資導致定期貸款利率下降 6 個百分點有關。我們注意到利率已經2022 年下半年上升。由於我們最近修訂的信貸協議的定價，債務的基點利差也有所增加。

Therefore, we will expect meaningfully higher interest expenses in 2023 than what we reported in 2022. The effective tax rate was unusually high in 2022, primarily due to the write-down of deferred tax assets that represented over 70% of our pretax income as well as jurisdictional mix of -- mix of earnings. We expect the tax rate to remain elevated for the near future.

因此，我們預計 2023 年的利息支出將明顯高於 2022 年報告的水平。2022 年的有效稅率異常高，這主要是由於減記了占我們稅前收入 70% 以上的遞延所得稅資產作為管轄權組合——收入組合。我們預計在不久的將來稅率將保持高位。

In our 10-K to be published by March 16 or earlier, we will also include disclosures of material weakness in the income tax process. As the company did not design and maintain effective internal controls related to the accounting for the completeness, occurrence, accuracy and presentation of the income tax provision and related income tax assets and liabilities.

在我們將於 3 月 16 日或更早發布的 10-K 中，我們還將披露所得稅流程中的重大缺陷。由於公司沒有設計和保持有效的與所得稅準備和相關所得稅資產和負債的完整性、發生、準確性和列報相關的內部控制。

Adjusted EPS was lower due to lower sales volumes and margins mentioned above, coupled with a higher adjusted tax rate than in 2021. Additional foreign currency was at $0.81 per share hit to EPS for the year. Our trailing 12-month bank covenant leverage ratio was 4.9, within our recently amended maximum leverage ratio for the fourth quarter of 5.25. In our new amendment credit agreement announced this week, our maximum leverage ratios increased. They are now 6.25 for the first second and third quarters of 2023, a stepping down to 5.75 in the fourth quarter, and first quarter and second quarters of 2024, then stepping down to 450 for the third quarter and beyond of 2024.

由於上述銷量和利潤率下降，加上調整後的稅率高於 2021 年，調整後的每股收益較低。額外的外幣對本年度每股收益的影響為 0.81 美元。我們過去 12 個月的銀行契約槓桿率為 4.9，在我們最近修訂的第四季度最高槓桿率 5.25 之內。在我們本周宣布的新修訂信貸協議中，我們的最大槓桿比率有所提高。現在，2023 年第一季度和第三季度為 6.25，第四季度、2024 年第一季度和第二季度降至 5.75，然後在 2024 年第三季度及以後降至 450。

There is also change in the [numerator] since we will no longer offset our debt balance as with net cash. For example, our 4.9% leverage ratio in the 2022 4th quarter will have been 5.6% under the new formula.

[分子] 也發生了變化，因為我們將不再像使用淨現金那樣抵消我們的債務餘額。例如，我們在 2022 年第四季度的 4.9% 槓桿率在新公式下將變為 5.6%。

As we close the book on 2022, our financial goals for 2023 are simple. Shore up our financial foundation and continue to invest in our growth initiatives. We will protect gross margins with additional price increases as necessary. We will have a laser focus on reducing our inventory levels and resizing our fixed cost base and optimizing our manufacturing and supply chain footprint. Meanwhile, we are investing in new products, new categories and most importantly, new ways to reach consumers.

當我們在 2022 年結束時，我們 2023 年的財務目標很簡單。鞏固我們的財務基礎並繼續投資於我們的增長計劃。我們將在必要時通過額外提價來保護毛利率。我們將集中精力降低庫存水平，調整固定成本基礎，優化製造和供應鏈足跡。與此同時，我們正在投資於新產品、新品類，最重要的是，投資於接觸消費者的新方式。

As our successful entry to target stores in the U.S. and our creation of a healthy omnichannel ecosystem in Korea have shown us. When consumers have access to Tupperware products, they choose them. With that, we will open the line for questions.

正如我們成功進入美國的目標商店以及我們在韓國創建健康的全渠道生態系統所向我們展示的那樣。當消費者可以使用特百惠產品時，他們就會選擇它們。有了這個，我們將打開問題熱線。

(Operator Instructions) Your first question comes from the line of Anthony Lebiedzinski with Sidoti.

（操作員說明）您的第一個問題來自 Anthony Lebiedzinski 與 Sidoti 的對話。

So first, wanted to see if you guys can talk about China. What have you seen since they stopped the zero COVID policies? Have you seen any incremental improvement? How should we think about that?

所以首先，想看看你們是否可以談談中國。自從他們停止零 COVID 政策以來，您看到了什麼？你有看到任何漸進的改進嗎？我們應該如何考慮？

So Anthony, this is Miguel. So actually, it was last week in China. The way we saw it is that when it opened up, obviously, a lot of people got sick, right? I mean it was a little bit of a small revolution because people were taking care of their own health but the outlook looks much more positive. Obviously, people are coming back to a new normality. And as I said in my previous remarks, we see that China is only going to get better. But obviously, we need to wait for the consumer reaction in this next 3, 4 months.

安東尼，這是米格爾。所以實際上，這是上週在中國。我們看到它的方式是，當它開放時，很明顯，很多人都生病了，對吧？我的意思是這是一場小小的革命，因為人們在照顧自己的健康，但前景看起來要樂觀得多。顯然，人們正在回歸新常態。正如我在之前的發言中所說，我們看到中國祇會變得更好。但顯然，我們需要等待未來 3、4 個月內消費者的反應。

Got it. Miguel. And then in terms of the sales to Target and some of the other sales channel expansion activities, can you guys talk about -- can you -- is there any way you guys can quantify sales to -- to Target -- some of these other expansion channels?

知道了。米格爾。然後就 Target 的銷售和其他一些銷售渠道擴張活動而言，你們能談談——你們能不能——你們有什麼方法可以量化銷售給——Target——其中一些其他活動嗎？拓展渠道？

So we obviously, let me just start with the most important thing. We're ahead of our expectation and also target expectations in our initial offers with them. So it's one of the bright spots of 2022. Still, overall company, we're just initiating obviously, our relationship with all these retailers around the world. So it's not material yet, but it's going to -- obviously, we expect high growth in that area. So that's what we can share right now.

所以我們顯然，讓我從最重要的事情開始。我們超出了我們的預期，並且還在我們與他們的初始報價中瞄準了預期。所以這是 2022 年的亮點之一。不過，總體而言，我們顯然只是在啟動與全球所有這些零售商的關係。所以它還不是很重要，但它會 - 顯然，我們預計該領域會出現高增長。這就是我們現在可以分享的內容。

Got it. Okay. And then just switching over as far as the new credit agreement, Mariela, what's the interest rate that we should think about as far as we update our models with this new credit agreement ? And also just as a quick other question as far as the tax rate, obviously, was elevated. What's kind of the right way to think about the tax rate for 2023.

知道了。好的。然後就切換到新的信貸協議，Mariela，就我們用這個新的信貸協議更新我們的模型而言，我們應該考慮的利率是多少？顯然，就稅率而言，還有一個快速的其他問題。考慮 2023 年稅率的正確方法是什麼？

Anthony. So before I start answering your questions, let me point out that our press release had an error in the gross profit of the fourth quarter and clarify that the gross profit for the fourth quarter, the appendix is correct, and it was $196.5 million for this quarter, and it was $240 million for the year ago. So let me now answer your question about interest rates.

安東尼。所以在我開始回答你的問題之前，讓我指出我們的新聞稿在第四季度的毛利潤中有錯誤，並澄清第四季度的毛利潤，附錄是正確的，這是 1.965 億美元季度，一年前為 2.4 億美元。那麼現在讓我回答你關於利率的問題。

As you have seen, the market trends, our interest rate is going to increase as a result of -- our bank agreement as well as the macro trends. And we expect that the trend will continue as you would -- as you saw it in the Q4 results.

正如你所看到的，市場趨勢，我們的利率將由於我們的銀行協議以及宏觀趨勢而增加。我們預計這一趨勢將繼續下去——正如您在第四季度的結果中看到的那樣。

Okay. Got you. Okay. And then just in terms of the tax rate also, if you could just -- obviously, this was unusually high tax expense that you had in the fourth quarter, if you could just help us think about the tax rate here going forward?

好的。明白了好的。然後就稅率而言，如果你能 - 顯然，這是你在第四季度的異常高的稅收費用，如果你能幫助我們考慮未來的稅率？

Yes. So for our tax rate, we expect the tax rate to continue to be elevated. In this year, we have a series of onetime items related to the valuation of our deferred tax assets. When we exclude those write-downs, the write-down with over 70% of our pretax income. So we are still -- have plans to normalize the tax rate in the coming years. For the next year, I will -- expect the tax rate to be higher, excluding these deferred tax assets write down.

是的。所以對於我們的稅率，我們預計稅率會繼續提高。今年，我們有一系列與遞延所得稅資產估值相關的一次性項目。當我們排除這些減記時，減記超過我們稅前收入的 70%。所以我們仍然 - 有計劃在未來幾年使稅率正常化。對於明年，我將 - 預計稅率會更高，不包括這些遞延稅資產減記。

Understood. Okay. Well, that's all I have here. I'll pass it.

明白了。好的。好吧，這就是我的全部。我會通過它。

And -- also to complement our tax strategy. We are in the process of finalizing our strategic plan of growing several countries and then expanding the retail channels. And as we do that, it would take some time to match our tax structure to our countries where we are rapidly growing.

並且 - 也是為了補充我們的稅收戰略。我們正在最終確定我們在多個國家發展然後擴展零售渠道的戰略計劃。當我們這樣做時，需要一些時間才能使我們的稅收結構與我們正在快速發展的國家相匹配。

Yes. Understood. Yes.

是的。明白了。是的。

Your next question comes from the line of Jason Bender with Citigroup.

你的下一個問題來自花旗集團的 Jason Bender。

Great. I'd like to start on the inventory side. Obviously, you've talked about the inventory management efforts. Can you tell us what inventories were at the end of the quarter? And just given how much cost inflation there's been this year, is there any way to dimensionalize how much of that inventory is kind of up on a volume basis? And so what sort of opportunity there is for you to reduce that in '23, given that's probably going to be one of the levers you pull in staying within compliance of those financial covenants

偉大的。我想從庫存方面開始。顯然，您已經談到了庫存管理工作。您能告訴我們本季度末的庫存情況嗎？考慮到今年有多少成本通脹，是否有任何方法可以衡量庫存中有多少是在數量基礎上增加的？那麼你有什麼樣的機會在 23 年減少它，因為這可能是你保持遵守這些財務契約的槓桿之一

So I'm going to start with the -- Jason -- So I'm going to start with the ways we're going to lower the inventory. And then I'm going to pass it over to Mariela so she can give you an exact number. So basically, what we're doing differently this year and we started over in Q4, is that all of our promotions and all the promotional activity that we're doing, the prices that we're giving and the incentives that we're giving to our sales force are also product that we have in inventory. So that's basic -- that has basically been proving very, very successful for us because they get a -- they get a gift and they can resell the gift and they actually earn even more money -- more money than what they were expecting. And again, this is one of our top priorities to lower the inventory so we can untrap that cash.

所以我將從 - 傑森開始 - 所以我將從我們降低庫存的方式開始。然後我會把它傳遞給 Mariela，這樣她就可以給你一個確切的數字。所以基本上，我們今年做的不同，我們在第四季度重新開始，我們所有的促銷活動和我們正在進行的所有促銷活動，我們提供的價格和我們提供的激勵措施對我們的銷售人員來說也是我們有庫存的產品。所以這是基本的——這基本上已經證明對我們來說非常非常成功，因為他們得到了——他們得到了一份禮物，他們可以轉售禮物，他們實際上賺了更多的錢——比他們預期的多。再一次，這是我們降低庫存的首要任務之一，這樣我們就可以釋放現金。

And if I can complement with the numbers, we ended the quarter with $250 million of inventory, which was down for about $230 million a year ago and the trend continues to repeat. We have plans to repeat that reduction in the coming quarters.

如果我可以補充這些數字，我們在本季度結束時的庫存為 2.5 億美元，一年前下降了約 2.3 億美元，而且這種趨勢仍在重複。我們計劃在未來幾個季度重複這種減少。

Got it. And just kind of staying in the vein of inventory and cash management and as it relates to the updated credit agreement. Obviously, you've said that you expect to remain compliant and clearly, with the amendment you've got a little bit more breathing room over the coming years. Can you just speak to your confidence in remaining in compliance with that and perhaps touch on some of the assumptions you have for business -- for the business that kind of underpins that confidence?

知道了。只是保持庫存和現金管理的脈絡，因為它與更新的信貸協議有關。顯然，您已經說過您希望保持合規，並且很明顯，通過修正案，您在未來幾年會有更多的喘息空間。你能否談談你對遵守這一點的信心，或許可以談談你對企業的一些假設——對於支撐這種信心的企業？

Yes. So we have a very supportive bank group with our -- across our negotiation process. We have a plan to continue to produce EBITDA in this company on better EBITDA than the past year of 2022 plus cash generation from our working capital management as well as our engineering plans that will produce an year benefits in the years to come as we continue to rightsize this company and place Tupperware products in all the channels where consumers look for them.

是的。因此，在我們的談判過程中，我們有一個非常支持我們的銀行集團。我們計劃繼續在這家公司產生比 2022 年更好的 EBITDA 加上我們的營運資本管理產生的現金以及我們的工程計劃，這些計劃將在未來幾年產生一年的收益，因為我們繼續調整這家公司的規模，並將特百惠產品投放到消費者尋找它們的所有渠道中。

So we expect to continue to generate cash as a company, and then the bank agreement will -- will now allow to continue the turnaround plan for the year 2023. So as of today, we're confident that we will be able to operate without substantial doubt in 2023.

因此，我們希望作為一家公司繼續產生現金，然後銀行協議將 - 現在將允許繼續執行 2023 年的周轉計劃。所以從今天開始，我們相信我們將能夠在沒有2023 年存在重大疑問。

Got it. And then just switching gears. I believe on the pricing side, you've mentioned further price increases expected in '23. Just wanted to confirm if that's still the case? And if so, can you kind of wrap some color around what the magnitude of those increases might be? And then clearly, we're seeing the impact of the prices you've taken in '22 -- flow through on the last 2 season markets like North America. But perhaps you can dimensionalize how less of these have shaped up compared to your expectations? And how do you think about managing the trade-off between the 2?

知道了。然後只是切換齒輪。我相信在定價方面，您已經提到 23 年預計價格會進一步上漲。只是想確認是否仍然如此？如果是這樣，你能用一些顏色來說明這些增長的幅度是多少嗎？然後很明顯，我們看到了你在 22 年採取的價格對北美等過去 2 個季節市場的影響。但也許你可以衡量這些與你的預期相比有多少？您如何看待管理兩者之間的權衡？

So Jason, again, Miguel here. So basically, 2022 was a really tough year from the pricing point of view. As you know, we had inflations everywhere in the world. Really high. We took even a double-digit price increase in countries that we've never -- we haven't taken a price increase in 10 years. So obviously, that had an impact in consumer and consumer sentiment. And that was one of the big headwinds that we had last year. This year, which is very different, we're going back to our normality of price increases, which in the countries that they have higher inflation, this is what we've been doing for years.

傑森，這裡是米格爾。所以基本上，從定價的角度來看，2022 年是非常艱難的一年。如您所知，我們在世界各地都經歷過通貨膨脹。真高。我們甚至在我們從未有過的國家中進行了兩位數的價格上漲——我們已經 10 年沒有進行過價格上漲了。很明顯，這對消費者和消費者情緒產生了影響。這是我們去年遇到的最大阻力之一。今年非常不同，我們將回到物價上漲的常態，在通貨膨脹率較高的國家，這是我們多年來一直在做的事情。

So we don't expect anything different. And the ones that we haven't taken or we traditionally take less than 5%, we're going to take less than 5%. We feel that we already protecting our margin. We're in a good space. The variations that you see are perhaps either a country mix or product mix, but we're in the range that we want to be in. So that is one of the big headwinds that we're going to have in 2023.

所以我們不期望有什麼不同。那些我們沒有拿走的或者我們傳統上拿不到 5% 的，我們將拿不到 5%。我們覺得我們已經保護了我們的利潤率。我們處在一個很好的空間。你看到的變化可能是國家組合或產品組合，但我們處於我們想要的範圍內。所以這是我們將在 2023 年遇到的最大阻力之一。

Got it. Appreciate the color. And sorry, just one last one, and I apologize for being a hog. I get that the expansion to Target and some of these omnichannel efforts are still relatively small. And I get that they were structured originally in such a way that they would be augmentative to the additional effort from the sales force. But now that the product has been on shelf for effectively a quarter, has there been any change in sort of behavior or attitude from the sales force members now that they are in a sense, competing with Target? And I get that's competing is not exactly the word, but now that the 2 are effectively live and product is available at the same time.

知道了。欣賞顏色。抱歉，只有最後一個，我為自己是個豬而道歉。我知道 Target 的擴張和其中一些全渠道的努力仍然相對較小。我知道它們最初的結構是為了增加銷售人員的額外努力。但既然產品已經上架了一個季度，銷售人員的行為或態度是否有任何變化，因為他們在某種意義上與 Target 競爭？我知道競爭並不完全是這個詞，但現在這 2 個有效地存在並且產品同時可用。

So you're right. Competing is not the right word. I think it's -- it's for us -- is a learning and it's balancing. But I think as we gave us an example, Korea in the previous remarks, if and when we create a perfect omnichannel ecosystem, it works really well. I mean some of them obviously grow more than other ones. In terms of the U.S., the products that we've chosen are just a couple of them are very similar -- for other ones are products that we never sell in the U.S. And some of them are Heritage lines, which are the top sellers that we used to sell them in the U.S. for long time ago.

所以你是對的。競爭不是正確的詞。我認為這是——對我們來說——是一種學習和平衡。但我認為，正如我們在之前的評論中給我們舉的例子，韓國，如果我們創建一個完美的全渠道生態系統，它就會非常有效。我的意思是他們中的一些人顯然比其他人長得更多。就美國而言，我們選擇的產品只是其中一些非常相似——因為其他產品是我們從未在美國銷售的產品，其中一些是 Heritage 系列，它們是最暢銷的產品我們很久以前在美國賣過它們。

And this is the way we want to operate because it brings brand relevance. And it's like -- I'm going to call it data advertising because we obviously, we made a -- we want to make money on these retailers but also brings the top of our brand and that iconic brand that we have brings it to the mind of consumers that we're not accessing right now. So it's a matter of time to get there. But you got to remember that our sales force, they normally on any given month, they sell over 200 different SKUs, whereas we have a very limited amount in target. Right now, target is, I'm going to call it, probably 1% to 2% of our sales and 98% is coming from direct selling.

這就是我們想要的運營方式，因為它帶來了品牌相關性。這就像——我要稱它為數據廣告，因為很明顯，我們做了——我們想從這些零售商身上賺錢，同時也將我們品牌的頂級品牌和標誌性品牌帶到了我們現在無法訪問的消費者的想法。所以到達那裡只是時間問題。但你必須記住，我們的銷售人員通常在任何給定月份銷售 200 多種不同的 SKU，而我們的目標數量非常有限。現在，目標是，我要稱它為我們銷售額的 1% 到 2%，98% 來自直銷。

So it's -- obviously, it's a journey, and we're going to continue to learn. But right now, Target has such low penetration that is -- we haven't seen any change in the behavior of our sales force.

所以它 - 顯然，這是一段旅程，我們將繼續學習。但現在，Target 的滲透率如此之低——我們還沒有看到我們銷售人員的行為有任何變化。

Got it.

知道了。

The next question comes from the line of Linda Bolton-Weiser. Linda?

下一個問題來自 Linda Bolton-Weiser。琳達？

I am sorry. We cannot hear. Operator, can you hear us?

對不起。我們聽不到。接線員，你能聽到我們嗎？

Yes. I do apologize. I just had technical difficulties.

是的。我很抱歉。我只是遇到了技術困難。

So we cannot hear Linda.

所以我們聽不到琳達的聲音。

Her line is open.

她的線路是開放的。

Can you hear me? Nice to hear you. So can you just comment on the cost environment because -- actually, A lot of the cost elements are starting to come down. I don't know if you're seeing plastic resin actually coming down or not and things like freight and shipping. Can you just kind of comment on kind of what you're seeing on that side of things?

你能聽到我嗎？很高興聽到你的音訊。那麼，您能否僅對成本環境發表評論，因為——實際上，許多成本要素開始下降。我不知道你是否看到塑料樹脂真的在下降，以及運費和運輸等事情。你能就你在事情的那一面看到的東西發表評論嗎？

Yes, Linda we had -- in average in the Q4, we still saw an increase in input costs and I think you would remember some logistics disruptions we have when China opened up as well as our plans to improve service levels across the Tupperware ecosystem for 2023, we are expecting some of our resin costs to go down as well as our supply chain logistics costs in line with what you're seeing in other industries.

是的，琳達，我們有——平均而言，在第四季度，我們仍然看到投入成本增加，我想你會記得中國開放時我們遇到的一些物流中斷，以及我們提高整個特百惠生態系統服務水平的計劃到 2023 年，我們預計我們的部分樹脂成本以及我們的供應鏈物流成本將與您在其他行業看到的情況一致。

Okay. And then I think in the past, Mariela, maybe you had mentioned or talked about a little bit like some IT investments in things like that -- that needed to be done in the company. What are your thoughts on that? And are there -- do you have a thought on what capital spending might be in 2023?

好的。然後我想在過去，Mariela，也許你曾提到或談論過一些像 IT 投資這樣的事情——這需要在公司內完成。你對此有何看法？還有——你有沒有想過 2023 年的資本支出可能是多少？

Yes. So we continue to prioritize our investments and balancing our decisions with our desire to delever this company and reduce debt over time. We put some CapEx plan that is similar to what we executed in 2022. And some of those investments are dedicated to upgrading our digital infrastructure to allow our sales force to transact online as well as upgrading our network internally to be global and standard and those investments continue. From time to time, we may slow down the pace to balance our obligations with our debt holders as well as other commercial investments with the -- the plan continuously then.

是的。因此，我們繼續優先考慮我們的投資，並在我們的決策與我們去槓桿化這家公司並隨著時間的推移減少債務的願望之間取得平衡。我們制定了一些與我們在 2022 年執行的計劃類似的資本支出計劃。其中一些投資專門用於升級我們的數字基礎設施，以允許我們的銷售人員進行在線交易，以及將我們的內部網絡升級為全球和標準網絡，這些投資繼續。有時，我們可能會放慢步伐，以平衡我們與債務持有人的義務以及其他商業投資與 - 然後持續不斷的計劃。

Okay. And then are there any thoughts -- I did see your product at Target and it looks very nice, and it was a nice array of SKUs and then the next time I went to see it was all gone off the shelf and then I didn't see it replenished very quickly. So have you done so well at targets that you're having trouble actually keeping the supply replenished? Or like how is that going?

好的。然後有什麼想法——我確實在 Target 看到了你的產品，它看起來非常好，而且它是一系列很好的 SKU，然後下次我去看的時候它都下架了，然後我沒有'看不到它補充得很快。那麼，您是否在目標上做得很好，以至於在實際保持供應補充方面遇到了困難？或者怎麼樣？

So it's going really well. It's going better than their expectations and our expectations. We know that we've been fulfilling target the way we agree with. So every time the POs come in, we're being -- obviously, it's a big prior it's a high priority for us. So I think it might have been in that sort of a little bit of a logistic issue within Target. It might have been probably a bad luck but -- but yes, I mean, things are going well, really well -- for us in Target.

所以一切進展順利。它比他們的預期和我們的預期要好。我們知道我們一直在按照我們同意的方式實現目標。因此，每次 PO 進來時，我們都會 - 顯然，這是一個重要的優先事項，對我們來說是一個高度優先的事項。所以我認為這可能是 Target 內部的一點後勤問題。這可能是運氣不好，但是——但是，是的，我的意思是，事情進展順利，真的很好——對我們在 Target 來說。

Okay. And then -- can you just maybe give a little more color on the North American decline because you did make some comp plan changes, and I know it was like a matter of time before those kind of got settled out and stuff. So is that still in place, the comp plan changed? And like can you just give some color on why that was so disruptive? And then is it going to get better? Or kind of what's the situation there?

好的。然後——你能不能給北美的衰退多一點顏色，因為你確實做了一些補償計劃的改變，我知道這些事情得到解決就像是時間問題。那是否仍然存在，補償計劃發生了變化？就像您能否就為什麼如此具有破壞性給出一些顏色？然後它會變得更好嗎？或者那裡的情況怎麼樣？

So obviously, we believe it's going to get better, and it's going to be better from many points of view, but this is what I call sustainable growth from profitable growth. So the way -- it was designed before was that every time we grew, our variable costs grew just as much. So we couldn't -- we couldn't capitalize on the growth in terms of bottom line. So we made a few changes on the compensation of the top leaders, which obviously has an impact on their under morale and their attitude. We believe we're still compensating firmly and competitively compared to other companies.

很明顯，我們相信它會變得更好，而且從許多角度來看都會更好，但這就是我所說的盈利增長帶來的可持續增長。所以這種方式 - 它之前的設計是每次我們成長時，我們的可變成本都會增長同樣多。所以我們不能——我們不能利用利潤方面的增長。所以我們對高層領導的薪酬做了一些改變，這顯然對他們士氣低落和態度有影響。我們相信，與其他公司相比，我們的薪酬仍然穩健且具有競爭力。

And the other big change came from the -- from the little guys, so the stores -- they are -- the guys that are just beginning when we were in COVID, we implemented a visual kit, which was -- almost afraid to get into the business and immediately would get 25% -- of discount. Which is the maximum discount. So basically, that is a friendly proposition for our consumer, but not a friendly proposition for a person that is starting a business because, obviously, everyone has access to that 25% discount, so I don't have the space to make money.

另一個重大變化來自——來自小傢伙，所以商店——他們是——當我們在 COVID 時才剛剛開始的人，我們實施了一個視覺工具包，這是——幾乎害怕得到進入業務並立即獲得 25% 的折扣。這是最大的折扣。所以基本上，這對我們的消費者來說是一個友好的提議，但對一個正在創業的人來說不是一個友好的提議，因為很明顯，每個人都可以獲得 25% 的折扣，所以我沒有賺錢的空間。

So that was the other change we made. We -- Were -- eliminated that virtual key. Obviously, our recurring numbers are going to go down, but the recruits that we're going to have are business-oriented people where they're actually going to -- make money. And we believe that is the new people start making money, then eventually is going to benefit the top guys are going to have higher volume on their venture going to go back to the absolute dollars that we're making before.

這就是我們所做的另一個改變。我們——曾經——淘汰了那個虛擬鑰匙。顯然，我們的經常性人數將會下降，但我們將要招募的是面向商業的人，他們實際上是為了賺錢。我們相信這是新人開始賺錢，然後最終將使頂尖人物受益，他們的風險投資量將增加，回到我們之前賺到的絕對美元。

Obviously, the return on sales and the profit and the margins in the U.S. look much better right now than they used to look 6 months ago. We took a hit on sales, but now we have a solid foundation to build a profitable, sustainable business.

顯然，美國的銷售回報率、利潤和利潤率現在看起來比 6 個月前要好得多。我們的銷售額受到了打擊，但現在我們有了堅實的基礎來建立一個盈利、可持續的業務。

Okay. That's helpful. I guess that's all for me.

好的。這很有幫助。我想這就是我的全部。

There are no further questions at this time. I will now turn the call over to Miguel Fernandez for closing remarks.

目前沒有其他問題。我現在將把電話轉給 Miguel Fernandez 作結束語。

Well, thank you very much for being with us. This morning. Looking forward to seeing you in 3 months, we are going to continue to build this company to where it belongs and make the business as big as our brand. Thank you very much.

嗯，非常感謝你和我們在一起。今天早上。期待 3 個月後與您見面，我們將繼續將這家公司建設到它所屬的地方，並使業務與我們的品牌一樣大。非常感謝。

This concludes today's call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連接。