Q1 2022 Estee Lauder Companies Inc Earnings Call

November 2, 2021

Good day, everyone and welcome to the Estee Lauder companies fiscal 2022 first-quarter conference call. Today's call is being recorded and webcast. For opening remarks, and introductions I would like to turn the call over to senior Vice President of Investor Relations Ms Rainey Mancini.

2022 first quarter conference call.

Today's call is being recorded and webcast for opening remarks, and introductions I would like to turn the call over to senior Vice President of Investor Relations Ms Rainey Mancini.

Hello on today's call are Fabrizio Freda, President and Chief Executive Officer, and Tracey Travis Executive Vice President and Chief Financial Officer.

Since many of our remarks today contain forward-looking statements. Let me refer you to our press release and our reports filed with the SEC, where you'll find factors that could cause actual results to differ materially from these forward-looking statements.

So I'll take the discussion of our underlying business, the commentary on our financial results and expectations is before restructuring and other charges and adjustments disclosed in our press release. Unless otherwise stated all net sales growth numbers are in constant currency.

Unless otherwise stated all net sales growth numbers are in constant currency.

And all organic results exclude the non-comparable impact of acquisitions, divestitures and branch closures and the impact of currency translation. You can find reconciliations between GAAP and non-GAAP measures in our press release and on the investors' section of our website.

You can find reconciliations between GAAP and non-GAAP measures in our press release and on the investors section of our website.

As a reminder, references to online sales include sales we make directly to our consumers to our brand dotcom sites and through third party platforms and also includes estimated sales of our products to our retailers' websites. During the Q&A session. We ask that you please limit yourself to one question. So that we can respond to all of you within the time scheduled for this call and now I'll turn the call over to Fabrizio.

Yeah.

Thank you, Rainey, and hello, everyone. We are grateful you have joined us today. We delivered excellent performance to begin fiscal year 2022, reinforcing our optimism in the opportunities of tomorrow as we discussed with you in August. Our multiple engines of growth strategy enabled us to excel, amit continued volatility and variability from the pandemic.

We delivered excellent performance to begin fiscal year 2022, reinforcing our optimism in the opportunities of tomorrow as we discussed with you in August our multiple engines of growth strategy enabled us to excel, Amit continued volatility and variability from the pandemic.

Organic sales rose 18% and adjusted diluted earnings per share grew an even stronger 31%. Encouragingly, relative to the pre-pandemic first quarter fiscal year 2020, our business is 13% larger on a reported basis and more profitable.

<unk> relative to the pre pandemic first quarter fiscal year 2020, our business is 13% larger on a reported basis and more profitable.

We achieved these outstanding results with increasingly diverse growth engines as we expected. By virtue of our dynamic strategy, we could act locally amid the complexity of the pandemic to both create and capture demand.

By virtue of our dynamic strategy, we could act locally I mean, the complexity of the pandemic to both create and capture demand.

The growth engines of makeup developed markets in the west and brick and mortar reunited and complemented momentum in skincare, fragrance mainland China travel retail in Asia Pacific and global online. 13 brands contributed double-digit organic sales growth, demonstrating the breadth of strength across our portfolio. Estee Lauder and Mac drove makeup energy Renaissance while La Mer and Clinique delivered $10 results in skincare, Impressively skincare solidly outpaced its prior year organic sales growth performance, despite having deforest toughest comparison, among the categories fragrance shored double digits, driven by Tom Ford Beauty, and Jo Malone London.

13 brands contributed double digit organic sales growth demonstrating the breadth of strength across our portfolio.

Este Lauder and Mac drove makeup energy Renaissance.

La Mer, and Clinique delivered $10, resulting skincare impress.

Impressively skincare solidly outpaced its three of year organic sales growth performance, despite having deforest toughest comparison, among the categories fragrance shored double digits, driven by Tom Ford Beauty, and Jo Malone London.

Let me share a few highlights by brand. Estee Lauder advanced planning for the mid-cap rate and our songs delivered significant sales growth and social and professional use education resumed in certain markets. The brand was well positioned with compelling innovation superb merchandising and on-point communication. Its double wear and futurist foundation franchisees rose strong double digits, while its new pure color whipped matte lipstick was a hit.

The loser advanced planning for the mid cap rate and our songs delivered significant sales growth and social and professional use education resumed in certain markets. The brand was well position with compelling innovation superb merchandising and on point communication its double wear and <unk>.

Photoresist Foundation franchisees rose strong double digits, while it's new pure color whipped matte lipstick was heat.

Mac strategically engaged consumers to drive performance in makeup. In the Americas and EMEA excellent results from in-store activations in regional Mac the moment campaigns combined we decided about innovation like Lustre glass, she has shine lipstick and magic extinction mascara.

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The brand's new omnichannel capabilities, which leverage its freestanding stores also contributed to the strength. It demonstrate a new capability for Mac to benefit from going forward. La Mer performance magnificant and led the company with sales rising strong double digits.

La Mer performance Magnificant and led the company with sales rising strong double digits.

New Dehydrating infused emulsion expanded our portfolio of east to west innovation, captivating consumers in every region. The project's successes are many, as it welcomes new and younger consumer as well as men into the brand and created a powerful halo benefits for La Mer skincare portfolio.

The project's success is our menu as it welcome new and younger consumer as well as men into the brand and created a powerful halo benefits for land mass skincare portfolio.

It is a striking example of the innovation gains we can achieve when the power of our data analytics combined with our creative talent and R&D. La Mer's iconic creme de La Mer Cross spirit is a new global campaign focused on eats most a rising benefit realized terrific initial results.

La Mers iconic creme de La Mer Cross spirit as a new global campaign focused on eats most a rising benefit realized terrific initial results.

Clinique strived in skincare from the strength of its heroes. Moreover, its new smart clinical repay a wrinkle correct in serum with powerful clinically-led cleans and compelling before and after these organisations extend the Clinique winning streak with innovation and further demonstrate the brand's ability to be highly relevant for consumers of all ages.

Demonstrating the brand's ability to be highly relevant for consumers of all ages.

In makeup, Clinique skincare authority drove growth in complexion led subcategories, while in leap the brilliant brand brilliant leverage [black Pony via route by route sensation on kick dock] to expand its consumer base, especially among Gen Z. Deciem complemented our organic sales growth in skincare, we did coveted vegan brand The Ordinary. It is known for its transparency, which has a name or eat with consumers and in the first quarter it launched inside everything is chemicals campaign, and the new regime and builder by The Ordinary on brine dot com realized spectacular adoption further enhancing the brand powerful online ecosystem.

DCM complemented our organic sales growth in skincare, we did coveted vegan brand dealers.

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<unk> is known for its transparency, which has a name or eat with consumers and in the first quarter in launched inside everything is chemicals campaign, and the new regime and builder by the ordinary on brine dot com realized spectacular adoption further enhancing.

The brand powerful online ecosystem.

Fragrance momentum continue with stellar double-digit performance in every region powered by ERO product and innovation from Tom Ford Beauty, Jo Malone London, and our artisan offerings.

We are excited for the Estee Lauder brand launch of its luxury collection in the second quarter as it expands our portfolio in the high growth segment of fragrances.

Our fragrance category benefits from diversification amongst our categories as well as regions with outstanding performance from both a historically strong market for fragrance and emerging fragrance opportunities.

The self-care rituals related to scent, which we embraced during the pandemic continue even as social and professional use education rescue.

Of note, Tom Ford Beauty performed strongly in both fragrance and makeup such that the brand was among our top performers in the quarter. Its new umber ladder partial and heroes, who the woods and loss Cherry fueled the brand's success. Our growth engines also diversified geographically led by developed markets in the west.

Our growth engines also diversified geographically led by developed markets in the west.

Our business in North America executed with excellence to deliver strong double-digit organic sales growth powered by readiness for makeup so emerging Renaissance, ongoing strength in skincare fragrance and recovery in health care. Strategic go to market initiatives supported by on-trend innovation increased advertising spending and expertise store [Deerfield] services delighted consumers. Our expanded consumer reach enhance these initiatives and Bobbi Brown launched in Ulta beauty exceeded expectation.

Strategic go to market initiatives supported by on trend innovation increased advertising spending and expertise store Deerfield services delighted consumers our expanded consumer reach enhance these initiatives and Bobbi Brown launched in Ulta beauty exceeded expectation.

And we are encouraged by the early results of the new Ulta beauty at Target and Sephora at Kohl's relationships. In Asia Pacific, many markets faced Covid induced lockdowns and temporary store closures, which pressured performance. Despite these, the region still grew 10% organically driven by strengths in greater China and Korea. Mainland China achieved double-digit organic sales growth, owing to skincare and fragrance with online and brick and mortar both higher.

In Asia Pacific many markets faced Covid induced lockdowns and temporary store closures, which pressured performance. Despite these the region still grew 10% organically driven by strengths in greater China and Korea.

Mainland China achieved double digit organic sales growth, owing to skincare and fragrance with online and brick and mortar both higher.

We launched locally relevant innovation, which proved highly desirable, while we also increased advertising spending strategically extended our consumer reach to match success on JD and designed successful activation for Chinese Valentine's day.

J D and designed successful activation for Chinese Valentine's day.

We continue to invest in the vibrant a compelling long term growth opportunity on mainland China led by our talented local team. We are enthusiastic for our new innovation center in Shanghai to open in the second half of this fiscal year.

This new World Class Innovation Center will be the first of its kind for our company. We did we will have a unique ability to grow and build on our market and consumer insights to develop exceptional products to meet and surpass the needs and desires of Chinese consumers.

What is more, we are seeing the benefits of our recent investment in online fulfillment, which had led to higher service levels and better inventory management, while setting the stage for expanded omnichannel capabilities in the market.

From a channel perspective globally brick-and-mortar grew strongly in markets, which are gradually emerging from the latest waves of COVID-19. We realized excellent results across the board in brick and mortar most especially in the Americas and EMEA. Our brands created excitement in store with enticing high touch services unique activations, we are encouraged by improving trends in the productivity of brick and mortar.

COVID-19, we realized excellent results across the board in brick and mortar most especially in the Americas and EMEA our brands created excitement in store with enticing high touch services a unique activations, we are encouraged by improving trends in the pool TVT or BRCA north.

Moving to both increased traffic and our strategic actions, including those under the post COVID business acceleration program. As brick and mortar reignites.

As brick and mortar reignites.

Our global online business continued to showcase its tremendous promise with impressive organic results despite significant organic sales growth in the year-ago period. Our line grew to be nearly doubled the size on a reported basis of the pre-pandemic first quarter of fiscal year 2020, many markets capitalize on the remarkable new consumer acquisition trend of the pandemic to deliver sustained gains in repeat purchases.

<unk> grew to be nearly doubled the size on a reported basis of the pre pandemic first quarter of fiscal year 2020, many markets capitalize on the remarkable new consumer acquisition trend of the pandemic to deliver sustained gains in repeat purchases.

As we seek to engage with consumers in innovative ways, we advanced our work with Instagram, Snapchat, Tik Tok, wechat and artist to capitalize on exciting trends in social commerce.

We also deployed the technology solution, which enables brands to better customize consumer outreach by leveraging data to merchandising personalized communication.

This is leading to higher conversion rates for new consumers and a deeper level of relationship-building after the initial pastures to foster retention. Initiatives, such as these position us well to realize even greater success with trial and repeat.

Initiatives, such as these position us well to realize even greater success with trial and repeat.

We continue to invest in online to strategically extend our consumer reach and realize promising results. For example, in the first quarter, La Mer launched on Lazada in southeast Asia to tremendous success with differentiated merchandising, unique services and prestige packaging, making it one of the platforms biggest brand launches ever.

And prestige packaging, making it one of the platforms biggest brand launches ever.

Our relationship we expanded in the current quarter with Jo Malone London the booth. Before I close, I wanted to share that to date, when we release, our fiscal year 2021, social impact and sustainability report. We are incredibly inspired by the achievements of our employees globally.

Before I close I wanted to share that to date, when we release, our fiscal year 2021, social impact and sustainability report we are incredibly inspired by the achievements of our employees globally.

The report highlights initiative across key areas, including inclusion, diversity and equity climate packaging, social investments, responsible sources and green chemistry. I'm particularly proud of our support to employees globally, who face financial hardships due to COVID-19.

I'm, particularly proud of our support to employees globally, who face financial hardships due to COVID-19.

The ELC cares employee relief fund award that nearly 14000 grants and distributed nearly $8 million through June 30th 2021.

Here are few among the many out his highlights of the report. We have continued to contribute to a low carbon future. For the second year in a row, we sourced 100% renewable electricity globally for our direct operations and achieved net-zero scope, one and scope two emissions.

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The company also made strong progress in its science-based targets for scope one and two and made efforts towards meeting its called three science-based targets.

We achieved our existing post-consumer recycled content goal ahead of schedule and announced a more ambitious goal to increase the amount of such material in our packaging to 25% or more by the end of calendar year 2025.

We are also committed to reduce the amount of virgin petroleum plastic in our packaging to 50% or less by the end of calendar year 2030. On the last few earnings calls, I discuss actions we are taking to make more progress on our commitments for regional equity as well as women advancement and gender equality, which are reflected in the report. We are also deepening our work by further aligning the strategy of the Estee Lauder company's charitable foundation to identify as support programs at the intersection of climate, justice, human rights, and well being with a focus on equity building upon our legacy of founding girls' education and leadership programs.

On the last few earnings calls I discuss actions, we are taking to make more progress on our commitments for regional equity as well as women advancement and gender equality, which are reflected in the report. We are also deepening our work by further aligning the strategy of the <unk>.

company's charitable foundation to identify as support programs at the intersection of climate, justice, human rights, and well being with a focus on equity building upon our legacy of founding girls' education and leadership programs.

In the beginning of fiscal year, 2022, and aligned with our social impact commitments. We were pleased to announce a three-year partnership with Amanda Gorman, activist, award-winning writer and the youngest inaugural poet in US history.

The companies will contribute $3 million over three years to support writing change, especially initiative to advance literacy as a pathway to a quality access and social change. In addition, Mrs. Gorman will bring her voice a change to the Este Lauder brand the booting our first campaign in the second half of this fiscal year.

Mrs. Gorman will bring her voice a change to the Este Lauder brand the booting our first campaign in the second half of this fiscal year.

In closing, we delivered outstanding performance to begin the new fiscal year amidst the volatility and variability of the pandemic, while continuing to invest in sustainable long term growth drivers.

We are focusing on fundamental capabilities for product quality and the consumer-centric elements of acquisition, engagement and high touch experiences and services. We are doing this while improving our cost structure, diversifying our portfolio and its distribution, investing behind the best growth opportunities in leading our values.

Growth opportunities in leading our values our.

Our confidence in the long term growth opportunities for global prestige beauty and our company is reflected in the announcement today to raise the quarterly dividend.

I am forever grateful to the grace, wisdom, and ingenuity of our employees globally, who are making us a stronger company each and every day. I will now turn the call over to Tracy.

I will now turn the call over to Tracy.

Thank you, Fabrizio, and hello everyone. We are off to an outstanding start with first-quarter net sales growing 18% organically, driven by the nascent recovery in the Americas and EMEA during the quarter compared to a more difficult environment in the prior year.

We are off to an outstanding start with first quarter net sales growing 18% organically driven by the nascent recovery in the Americas and EMEA during the quarter compared to a more difficult environment in the prior year.

Global logistic constraints caused some retailers primarily in North America to order earlier to ensure popular sets and products would be on counter for holiday.

We estimate that this contributed approximately 1.5 points to our first-quarter sales growth that otherwise would have occurred in the second quarter.

The inclusion of sales from May 2021, DECIEM investment added approximately three points to reported net sales growth and currency added just over two points.

From a geographic standpoint, organic net sales in the Americas climbed 27% as COVID-19 restrictions ease throughout the region. Brick and mortar retail grew sharply across all formats compared to the prior-year period, when many stores were temporarily shut down.

Brick and mortar retail grew sharply across all formats compared to the prior year period, when many stores were temporarily shut down.

Distribution and Kohl's with Sephora and in target with Ulta beauty began its phased rollout to initial stores and online in mid-August with minimal impact on net sales growth for the quarter.

With the strong resurgence of brick and mortar traffic, online organic sales growth in the Americas declined single digits against the sharp increase last year, while organic online penetration remains solid at 31% of sales.

The inclusion of sales from DECIEM added about 9 points to the overall reported growth in the region. In our Europe, the Middle East and Africa region, organic net sales rose 19% with virtually every market contributing to growth. Led by the emerging markets in the Middle East, Turkey, and Russia, as well as the UK.

In our Europe, the Middle East and Africa region organic net sales rose, 19% with virtually every market contributing to growth.

Led by the emerging markets in the Middle East, Turkey, and Russia, as well as the U K.

Most markets throughout the region saw COVID-19 restrictions lifted and some tourism resume during the peak summer months. Like Channel, the region saw more balance between brick and mortar and online growth.

Channel the region saw more balance between brick and mortar and online growth.

All major categories grew this quarter and the region saw the strongest growth in fragrance and makeup as social occasions increased. Our global travel retail business grew double-digit. As China and Korea continued to be strong. Internal travel restrictions during the quarter in China slowed Hainan sales temporarily but restrictions lifted in early September and traffic rebounded.

Our global travel retail business grew double digit.

As China, and Korea continued to be strong internal travel restrictions during the quarter in China slowed Hainan sales temporarily let restrictions lifted in early September and traffic rebounded.

Retailers also responded to the August step by driving post-travel consumption online. Summer holiday travel in Europe, and the Americas picked up but international travel still reached only 40% of pre-COVID-19 levels. In our Asia Pacific region, organic net sales rose, 10%, driven by greater China and Korea.

Summer holiday travel in Europe, and the Americas picked up but international travel still reached only 40% of pre COVID-19 levels.

In our Asia Pacific region, organic net sales rose, 10%, driven by greater China and Korea.

The region overall experienced higher levels of COVID lockdowns this quarter compared to last year's quarter due to the rise of the Delta variant, although online remains strong.

Sales growth in mainland China was somewhat slower due to COVID-19 restrictions during July and August. And the pace of online sales growth slowed following the successful 618 programs last quarter and in anticipation of the 11 11 shopping festival.

And the pace of online sales growth slowed following the successful 618 programs last quarter and in anticipation of the 11 11 shopping festival.

As we've mentioned before, these key shopping moments have created some additional seasonality in our business in this region. More than half of our brands in virtually all channels rose double-digits in mainland China.

More than half of our brands in virtually all channels rose double digits in mainland China.

Hong Kong and Macau were bright spots this quarter. They benefited from strong new product launches from La Mer and Jo Malone, and successful marketing campaigns from several other brands. From a category perspective, net sales growth in fragrance jumped nearly 50%.

From a category perspective.

Net sales growth in fragrance jumped nearly 50%.

Virtually every brand that participates in the category contributed to growth with exceptional double-digit increases from Tom Ford Beauty, Jo Malone London and La Belle. Perfumes and colognes led the category growth and Bath, body and home fragrances continued to perform well.

Perfumes, and Cologne led the category growth and Bath, <unk> body and home fragrances continued to perform well.

Net sales in makeup rose 18% as markets in the Americas, and Europe began to recover from COVID shutdowns. We are encouraged by the sequential improvement in makeup versus pre-COVID-19 levels. However, makeup sales in the quarter were still 19% below two years ago. Nonetheless, Estee Lauder foundations continue to resonate strongly with consumers and Mac leaned into the makeup recovery with a number of funds and compelling campaigns.

We are encouraged by the sequential improvement in makeup versus pre COVID-19 levels. However makeup sales in the quarter were still 19% below two years ago. Nonetheless, Este Lauder foundations continues to resonate strongly with consumers and Mac leaned into the makeup recovery with a number of funds and compare.

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Skincare sales remained strong during the quarter. Organic net sales grew 12% and the inclusion of sales from DECIEM added six percentage points to reported growth.

Nearly all of our skincare brands contributed to growth, although Estee Lauder had a tough comparison with the prior year launch of its improved advanced night repair serum.

Our hair care net sales rose 8% as traffic in salons in stores in the US and Europe began to return. Both Aveda and bumble and bumble saw growth in hero products as well as continued strength from innovation.

Both aveda and bumble and bumble saw growth in hero products as well as continued strength from innovation.

Our gross margin declined 100 basis points compared to the first quarter last year. The positive impacts from strategic pricing and currency were more than offset by higher obsolescence costs for both basic and holiday product sets and the inclusion of DECIEM. Operating expenses decreased 240 basis points as a percent of sales.

Positive impacts from strategic pricing and currency were more than offset by higher obsolescence costs for both basic and holiday product sets and the inclusion of desk Liam.

Operating expenses decreased 240 basis points as a percent of sales.

Our strong sales growth was partly due to earlier orders from some north America retailers concerned about logistics constraints and costs related to these sales are expected to be incurred in our second quarter.

We do continue to manage costs with agility, realizing savings from our cost initiatives. While also investing to support our continued brick and mortar recovery as well as our strategic initiatives.

Our operating income rose 32% to $941 million and our operating margin rose 140 basis points to 21.4% in the quarter. Diluted EPS of $1.89 increased 31% compared to the prior year.

Diluted EPS of $1 89 increased 31% compared to the prior year.

During the quarter, we used $81 million and net cash flows from operating activities, which was below the prior year. This reflects a more normalized first quarter, where we typically have seasonally higher working capital needs.

This reflects a more normalized first quarter, where we typically have seasonally higher working capital needs.

We invested $205 million in capital expenditures as we ramped up our investment to build a new manufacturing facility in Japan. And we returned $749 million in cash to stockholders through both share repurchases and dividends.

And we returned $749 million in cash to stockholders through both share repurchases and dividends.

We also announced this morning, an increase in our quarterly dividend. So now, let's turn to our outlook.

So now, let's turn to our outlook.

We are encouraged by the Green shoots we are seeing around the world even in the context of an environment of increased volatility.

Our strong performance reflects our ability to navigate through the volatility while leveraging our multiple engines of growth. At the same time, we are mindful net recoveries are tenuous and likely to be uneven.

Nevertheless, we are cautiously optimistic and our assumptions for fiscal 2020 remain consistent. We continue to expect an emerging Renaissance in the makeup category as restrictions are safely lifted and social occasions increase.

We continue to expect an emerging Renaissance in the makeup category as restrictions are safely lifted and social occasions increase.

We welcome the resumption of some travel in the Americas and EMEA in the first quarter. And as intercontinental restrictions are lifted we expect international passenger traffic to build towards the end of the fiscal year.

We began taking strategic pricing actions in July. And overall pricing is expected to add at least 3 points of growth, helping to offset inflationary pressures.

On the cost side, we plan to continue to increase advertising to support our brands and drive traffic in all channels. Selling costs are expected to rise to support the reopening of brick and mortar retail. We also continued to invest behind key strategic capabilities like data analytics, innovation, technology and sustainability initiatives.

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As you are all aware, global supply chains are being strained by Covid and its related effects in some markets, resulting in port congestion, higher fuel costs and labor shortages at a time when demand for goods is rising.

This is causing us to experience inflation in freight and procurement, which we expect to impact our cost of goods and operating expenses beginning next quarter.

Based on what we see through October, the expected benefit of pricing combined with good cost discipline elsewhere are enabling us to maintain our expectations for the year. For the full fiscal year, organic net sales are forecasted to grow 9% to 12%.

For the full fiscal year organic net sales are forecasted to grow 9% to 12%.

Based on rates of $1.163 for the Euro, 1.351 for the pound and $6.471 for the Chinese yuan, we expect currency translation to be negligible for the full fiscal year. This range excludes approximately three points from acquisitions divestitures and brand closures, primarily the inclusion of DECIEM. Diluted EPS is expected to range between 723 and 738 before restructuring and other charges.

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Diluted EPS is expected to range between $7 23, and 738 before restructuring and other charges.

This includes approximately 4 cents of accretion from currency translation and 3 cents accretion from DECIEM. In constant currency, we expect EPS to rise 11% to 14%.

In constant currency, we expect EPS to rise 11% to 14%.

At this time, we expect organic sales for our second quarter to rise 8% to 10%. The net incremental sales from acquisitions divestitures and brand closures are expected to add about three points to reported growth and currency is forecasted to be neutral.

The net incremental sales from acquisitions divestitures and brand closures are expected to add about three points to reported growth and currency is forecasted to be neutral.

Operating expenses are expected to rise in the second quarter as we support holiday activations and the continued recovery of brick and mortar retail around the world.

Additionally, the prior-year quarter included some benefit of government subsidies, which are not anticipated in the current year quarter. We expect second-quarter EPS of $2.51% to $2.61.

We expect second quarter EPS of $2, 51% to $2 61.

Both currency and the inclusion of DECIEM are expected to be immaterial to EPS, notably, our EPS forecast also reflects a 23% tax rate compared to a 15.9% in the prior year when we benefited from certain one-time items.

In closing, we are pleased with the terrific start to the year and are proud of the continued efforts of our global team. We remain confident in our corporate strategy with its multiple growth engines to drive sustainable profitable growth. That concludes our prepared remarks, we'll be happy to take your questions at this time.

We remain confident in our corporate strategy with its multiple growth engines to drive sustainable profitable growth.

That concludes our prepared remarks, we'll be happy to take your questions at this time.

Thank you. The floor is now open for your questions. If you have a question, you simply press the star key followed by the digit one on your touchtone phone. To ensure that everyone can ask their question, we will limit each person to one question. Time permitting we will return to you for additional.

To queue up again by pressing the star key in the digital one. And our first question today comes from Erinn Murphy, Piper Sandler.

And our first question today comes from Erinn Murphy Piper Sandler.

Great. Thank you good morning, I guess my question is around the supply chain Tracey for you. If you could talk a little bit more about your ability to get product to the end markets in a timely manner into holiday. And are you seeing any major shifts in product launches? And then maybe if you can share if you think about the higher opex, how are you balancing airfreight versus ocean freight currently? Thank you so much.

My question is around the supply chain Tracey for you. If you could talk a little bit more about your ability to get product to the end markets in a timely manner into holiday and are you seeing any major shifts in product launches and then maybe if you can share if you think about the higher opex, how you're balancing airfreight.

Great currently thank you so much.

Yeah, Hi, Erinn. We are seeing some supply chain impact, as I said in our prepared remarks, we have experienced some air freight and we have experienced some delays. But by and large we are in very good shape for the holiday. Our holiday sets. We had anticipated some of the supply chain challenges earlier in the year when clearly our supply chain and more publicly there were discussions about the supply chain challenges and so we did order some products early, we produce some products early and we landed many of our guests that's early.

We are seeing.

Some supply chain impact as I said in our prepared remarks, we have.

Experienced some air freight and and we have experienced some delays, but by and large we are in very good shape for for holiday.

Our holiday sets.

We had anticipated some of the supply chain challenges earlier in the year when when when clearly our supply chain and more publicly there.

were discussions about the supply chain challenges and so we did order some products early, we produce some products early and we landed many of our guests that's early.

And that set us up pretty well for Q2. So we are experiencing some inflation in and transport we're managing it as best we can one of the things that, certainly, we have the benefit of as we are a luxury company. So we do have pricing power.

Certainly we have the benefit of as we are a luxury company. So we do have pricing power.

And we have pricing power not only in our inline products, but also in our innovation as well. So we do have the opportunity and have taken the opportunity to offset some of the cost inflation with some of the pricing that we've taken this year.

And our next question is going to come from the line of Lauren Lieberman with Barclays.

Great. Thanks so much, good morning. Really curious to hear a little bit more about Mac. And I would certainly have expected it to be key in the beginning of this makeup resurgence.

Really curious to hear a little bit more about Mac.

And I would certainly have expected it to be key in the beginning of this makeup resurgence.

But was curious what you could tell us in terms of progress on brick and mortar footprint in North America and EMEA, how that interacts with the online presence. And how you think about the profit model for that brand or maybe from the makeup category going forward. We're one quarter into the beginning of a recovery. So I recognize that looking at operating margins for the division isn't really fair game yet.

But interested to hear how you think that can evolve over the next whatever the appropriate timeframe 12 plus months or so.

Yeah, hi, Lauren So you faded out and at the very beginning what your question is about what specifically? About Mac. Mac and how the. The brick and mortar footprint, where you've gotten so far how that foots with online presence and how you're thinking about the business model going forward and what that means for profitability.

About Mac.

Lack of Mac and how the.

The brick and mortar footprint, where you've gotten so far how that foots with.

online presence and how you're thinking about the business model going forward and what that means for profitability.

Yeah, no, and you know as we announced last year in our post-Covid acceleration program. We did take the opportunity last year to close some stores in some additional stores will close this year. And not only freestanding stores, but there are some counters as well that Mac has pulled out of.

We did take the opportunity last year to close some stores in some additional stores will close this year and not only freestanding stores, but there are some counters as well that Mac has pulled out of.

We were encouraged at the end of last year and encouraged through the first quarter with Mac performance in both the Americas. Both North America as well as Latin America and also EMEA. So we really with a return to brick and mortar as we had indicated before, we saw higher productivity of the remainder brick and mortar doors that we had open.

Brick and mortar doors that we had open.

And we saw a bit of softness more in North America than in EMEA, but a bit of softness in online. As traffic returned to brick and mortar, we think that will normalize out a bit in Q2, and we will see a bit more balanced but.

As traffic returned to brick and mortar we think that will normalize out a bit in Q2, and we will see a bit more balanced but.

As I think all of us can imagine I think consumers are very excited about going back to two brick and mortar stores, in markets where restrictions were lifted. And people felt more comfortable going out and socializing.

And and people felt more comfortable going out and socializing.

Yeah, just I can add that also Mac has been a good start in the Ulta target experience, is great start in the preparation of the holiday season.

That did also Mac has been a good start in the ultra target.

Experience is great start in the preparation of the holiday season and.

And the brand is doing very well online. And is one of the brands that is benefiting from the service acceleration online both in US and in EMEA. So overall, very good progress on that obviously as you would expect in the context of the make acceleration for consumers in general.

So overall very good progress on that obviously as you would expect in the context of the make capex innovation for consumers in general.

Thank you. Our next question comes from the line of Nik Modi with RBC capital markets.

Yeah, hi, good morning everyone. I had a question on consumer behavior, just on online what you're seeing there in terms of stickiness retention, obviously, that's an important channel from a profitability standpoint and consumer engagement. So just wanted to understand that. And then also Fabrizio. If you think about what happened during the pandemic as consumers were migrating to well-known brands exploration kind of came down a bit but I suspect that that's starting to happen now as consumers are getting back out and exploring different brands. I just wanted to get your perspective on that dynamic if that's, what you're seeing and how does that stay better prepared in the future to deal with all of these upstart brands that are starting up on social media. Thank you.

I had a question on consumer behavior, just on online what Youre seeing there in terms of stickiness retention, obviously, that's an important channel from a profitability standpoint, and consumer engagement. So just wanted to understand that and then also Fabrizio. If you think about what happened during the pandemic as consumers were migrating to well known brands exploration.

<unk> kind of came down a bit but I suspect that that's starting to happen now as consumers are getting back out and exploring different brands I just wanted to get your.

Perspective on that dynamic if thats, what youre seeing and how does that stay better prepare in the future to deal with all of these upstart brands that are starting up on social media. Thank you.

So I think the two questions for some of what we see online. Obviously online is doing pretty well on a two-year stack, we doubled it. And so is a very strong acceleration versus two years and we see that progress to continue and the growth to continue. Obviously in the moment, where there was the opening of brick and mortar the amount of growth online slowed down but they continue to grow which is what is really encouraging so.

Online.

Obviously online is doing pretty well on a two year stack.

Doubled it and so is a very strong acceleration versus two years in and we see that progress to continue and the growth. Two continues obviously in the moment, where there was the opening of brick and mortar the amount of growth online as a slow down but they continues to grow which is what is really encouraging so.

The most important parts of your question what happened to the consumers' behavior. So what we saw during COVID-19 the consumers that will radio online before like younger consumer continue to be online, even more intensively, but there were many new consumers that just appeared online during the COVID period that were more the agent is consumer, the more adults consumers. How does consumer really enjoyed it so they're staying online and so that's what that showed that the online continues to grow even when brick and mortar open shocked, but obviously the two channels growth get rebalanced in these situations. So very optimistic for online. The other thing that online continues to grow is that there are very different channels with 11 different level of growth and we are growing in every single channel.

Parts of your question what happened to the consumers' behavior. So what we saw during COVID-19 the consumers that will radio online before like younger consumer continue to be on line, even more intensively, but there were many new consumers that just appeared online during the coffee Peter the way well more.

more of the agent is consumer, the more adults consumers how does consumer really enjoyed it so they're staying online and so that's what

that showed that the online continues to grow even when brick and mortar open shocked, but obviously the two channels growth get rebalanced in these situations. So very optimistic for online. The other thing that in online continues to grow is that there are very different channels with 11 different level of growth and we.

We are growing in every single channel.

And we are growing in PPP, we are growing in brand account. We are growing in retail, we are growing in the pure plays and these are very different by region because in every region one of these channels are stronger than the other. So the combination of the global online growth is continuing to be pretty exciting and we count on this to continue even when brick and mortar will be fully recovered.

So the combination of the global online growth is continuing to be pretty exciting and we count on this to continue even when brick and mortar will be fully fully recovered.

And as a result, we have reached already 28% of our business in online and this will gradually continue to grow over time. So Barry. Very strong in turmoil.

Line and this will gradually continue to grow over time.

So Barry.

Very strong in turmoil.

To your second question because it was a separate question on consumer behaviors in Asia.

Yes.

Yes, it was around exploration. Kind of died down during the pandemic. Are you seeing consumers explore new brands again? What is that they are doing to try to make sure that doesn't become too much of a risk going forward?

Kind of died down during the pandemic.

Are you seeing consumers explore new brands again, what is that they are doing to try to make sure that doesn't become too much of a risk going forward.

I think the exploration of newness in the world of beauty will continue, will never stop and personally, I don't have any data point that suggests was dependent on COVID. The exploration is not only about new brands, but is this exploration is about the newness of the existing brands in fact, our percentage of newness continues to be very very high and our innovation program continues to be super exciting.

Causing the deceleration.

Tony about new brands, but is this deceleration is about the newness of the existing brands in fact, our percentage of newness continues to be very very high and our innovation program continues to be Super exciting we are we.

We continue to be in the 30% of new products per year, which is extraordinary and has been a huge progress in the last years. So we continue to see consumers to be interested in innovation and we continue to make our innovation program one of the best drivers of growth globally.

Globally.

Thank you. Our next question is going to come from the line of Dara Mohsenian with Morgan Stanley.

Hey, guys, good morning. Good morning. So just a question on guidance. Clearly you came in better than expected in terms of fiscal Q1, you mentioned some green shoots obviously, a makeup recovery Americas recovery.

Good morning morning.

So just a question on guidance.

Clearly you came in better than expected in terms of fiscal Q1, you mentioned some green shoots obviously, a makeup recovery Americas recovery.

These are some softness with some of the government lockdowns into the quarter, but sounded like that's getting better. So I'm just trying to understand unchanged local currency topline guidance for the year. Is there something specific that's giving you more caution as you look at the balance of the year? Is it more just some conservatism given it's early in the year? How do you sort of think about that relative to the Q1 top-line delivery and some green shoots and maybe specifically also you can touch the 11 11 shopping festival in China, and what you're seeing there in terms of initial signs heading into that festival.

Sounded like that's getting better.

And.

So I'm just trying to understand.

Unchanged local currency topline guidance for the year is there something specific that's giving you more caution as you look at the balance of the year is it more just some conservatism given it's early in the year. How do you sort of think about that relative to the Q1 top line delivery and some green shoots and maybe specifically also you can tell.

Sure.

The 11, 11 shopping festival in China, and what Youre seeing there in terms of initial signs heading into that festival.

Yeah, Yeah. Thanks, Derrick so and in terms of you know we are encouraged obviously as we shouldnt be by our Q1 performance we're still only.

Only a quarter and as you mentioned as you mentioned that we did have some early shipments in the quarter that obviously came out of the second quarter. So some of the growth as we mentioned about a point and a half.

Related to that.

But as we look at the balance of the year. We are also while we are seeing encouragement theres still a lot of volatility in the market. You know we did have some markets.

Unexpectedly that were shut down in the first quarter.

We are still managing through this pandemic.

And and so we are we believe that certainly as you look at Q2 on a two year stack basis. It is and really versus pre pandemic, it's really quite strong and again, you're seeing some of the seasonality related to 11 11.

Continue to impact our.

Q1, and that's reflected in the Q2 and that's reflected in the guidance that we've provided.

But we feel that the guidance that we've given for the year is incredibly strong.

The only difference.

Bob between the guidance that we gave last time and this time as currency our outlook on currency is is a bit is a bit less so that's the one point change in the.

The guidance that you see.

And then from a <unk>.

From an.

A reported EPS standpoint.

Our guidance actually on a constant currency basis has improved quite a bit. So we I would I would say we are seeing green shoots we are expressing confidence in the guidance that we're providing.

Quite quite a bit when you actually look at it from an EPS EPS standpoint, even with.

All of the things that we're navigating through as it relates to transport et cetera, and that goes to the choices that we're making as an organization in terms of where to invest and where not to invest along with the pricing actions.

That we're taking as well.

Yes.

Thank you. Our next question is going to come from the line of Steve powers with Deutsche Bank.

Yes, hey, thanks.

Firstly, just a cleanup I apologize if I missed it but where the early holiday sales in North America that you've mentioned in the first quarter excuse me at all to any particular brand or product category that that'd be helpful.

I really wanted to ask about was sort of picking up on.

So I think there are a bunch about it I'm not sure you addressed Tracy.

The relative softness in.

China and Asia that you experienced in the quarter against the curtailed mobility backdrop.

Versus the improvement that you saw in September and what I hear his enthusiasm about during December at around the 11 11 holiday. So maybe you could just expand a little bit on how trends evolved through the.

The September quarter, and then what Youre expecting.

In the Asia Pacific region.

As we go through fiscal <unk>. Thank you.

Yeah, no so Steve in terms of in terms of the early early shipments obviously, our larger brands would have comprised most of the larger you know most of the sales dollar volume in terms of those those shipments, but it was really it was really across the board and again, both we and our.

Retailers wanted to make sure that we had our holiday program as programs as well as some of our basic product in store recognizing the severe constraint that is being projected as it relates to transport. During this holiday season. So we feel very good about that.

In terms of Asia Pacific inclusive of China, but but other markets as well we did see.

Some intermittent shutdowns in Asia and that did include.

Some traffic to Hainan being a bit curtailed in the July and August timeframe and a bit into the early part of September.

We saw as we mentioned in our prepared remarks, Hainan pick up quite a bit windows travel restrictions are lifted almost immediately.

So that is a positive sign and we are still quite encouraged with respect to China and and the performance that that we expect to see certainly for the balance of the year.

Both in China in mainland, China, and with Chinese consumers wherever they shop.

Thank you. Our next question will come from the line of Stephanie Wissink with Jefferies.

Hi, Good morning. Thank you for taking my question. This is grace and thank all of our staff I am wondering if you could talk a little bit about the strength that you're seeing in fragrance and just touch on the sustainability. There is there anything.

Filmed in your guidance for fragrance and then also on SME.

And if there's anything of students for the makeup of copper in the second-half guidance. Thank you.

Yes.

We see obviously, a very strong fragrance market and.

And we see.

Great growth in every single region. So.

Is good.

We see particularly strong fragrance traction in the high end fragrances in what we call the luxury of seasonal part of our portfolio. This is really a standard so brands like Jo Malone, Tom for Le Labo Kilian Frederic Malle.

And this is we believe this will continue this is a trend we have identified some years ago and we have focused the growth of our portfolio and our innovation on this kind of highly sophisticated fragrance experiences and while we have seen that during COVID-19 the DS.

<unk> accelerated the consumers that even more interesting. The other interesting thing is during COVID-19 the element of our fragrance brands that where for example home like candles, all personal client Segal pampering part so the lineup beyond to fragrance.

Also it was accelerating and this acceleration continues so the positives that consumers have learned also the possibility of the pumping in house element of <unk>.

Does that these brands provide they continue to buy them also after the <unk> period or decent.

All these things so the entire fragrance brands are strong the fragrance category is strong and we expect to have a good holiday season in this area, we expect continuous growth overtime.

Thank you. Our next question comes from the line of Andrea pay shatter with J P. Morgan.

Thank you good morning, and congrats on your results can you comment on the cadence of the quarter in Asia Pacific and how you exited.

It seems like you had a pickup in China consumption towards the end of the quarter and Tracy you mentioned that in your prepared remarks, and I think to that question, but.

Is that acceleration and fiscal second quarter, a function of normalizing the pull forward or more how conservative you are seeing things happening and then obviously you have the seasonality that we have been calling.

For 11 11, so if you can just kind of elaborate more on that I would appreciate it. Thank you.

Yeah.

We achieved double digit growth in China, this quarter and so very strong double digits also on a two or three years stock basis. So despite the.

Frictions that we saw in July and in August So the Chinese consumer is really strong and we are serving them. We also with a variety of locations.

Meaning in every channel we see the growth online, we see the growth in brick and mortar we see the growth in China and in our key idea is to serve the Chinese consumers wherever they are and to serve them in the best possible way so.

We manage these with agility and depending what is the commercial model. There is emerging in China, we focus more on when China corn and other also depending by decision at.

At the moment also screen skincare, which I think is a great sign of strength skincare grew strong double digits. Despite the very tough comparison with the previous year, where in our case, we launched the advanced night repair relaunch. So was a very big innovation in the base period.

So brick and mortar in China also so very strong growth in our business online grew double digits.

Despite the fact that in quarter, one online is a bit normally sandwiched between the 618 big event and the 11 11 big event, but despite that we grew double digits and in the long term fundamental on the market and closing, namely the large and growing middle class with increase.

<unk> spending per person the remaining all these remain intact and.

So the key idea is to be able to.

Focus on the Chinese consumer in whatever channel they choose to shop it depending on the moment of the year and Thats. What we are doing and that's why we remain very confident for the remaining of the fiscal year.

Andrea as it relates to the rest of APAC, we are expecting a pickup in the second quarter. So we are not anticipating as many of the.

Restrictions to be in place in the rest of APAC that we saw in Q1.

Thank you. Our next question is going to come from the line of Olivia Tong with Raymond James.

Great. Thank you.

Just wanted to talk a little bit about some of the new brands like the ordinary and if you could just give a little bit of commentary around.

You know things that you've learned since then.

The majority stake, but you've taken and how that could potentially be influencing other brands in your portfolio with respect to you know.

Where you could potentially invest going forward what retailers mitral other brands working.

May have not have thought about earlier thank you.

Yeah first of all Dave.

<unk> made extraordinary company and the ordinary is a brand with a more enormous success and traction and.

So first of all we are collaborating with the management team of <unk> to continue building, both the ordinary and to continue building. The overall days in company with their historic generic incubation capability to the head and new brands that are creating for the future. So both of these activities. So the big learning is all.

Obviously, the ability to create bass and interest and the relationship between the ordinary brand and the consumer is really us towards that obviously, we can learn a lot from this but the platform learning we can support them.

Implementation of the global commercial strategies and increasing the reach of the brand.

And obviously in leveraging the powerful connection with the consumer in the best possible way in supply chain in R&D in many many areas. So we can learn and we can support and these exchange is proving to be very successful then on top of the ordinary there are other brands that building other ideas and creative.

For the future. So what we're learning is also the power of the creative and condition and the creation of new brands and this will have an influence on our future ability to continue to do that multi brands and definitely we will leverage the strengths of days emulsion. These area.

Thank you.

Our next question will come from the line of Mark Astra Chen with Stifel.

Thanks, and good morning, everyone.

I wanted to ask about.

<unk> growth I think you had mentioned this on some previous calls in terms of.

Where the growth was coming from meaning that you werent necessarily sourcing it from sales in the mainland I guess I'm curious if that's still the case and kind of how you think about what has driven the growth, especially as it seems like some of the duty free operators are paying the duty to deliver product to mainland customers. So if that's true kind of how do you think this all.

Plays out in time in terms of having mainland into man or kind of local duty free work together.

Yeah.

Keep in mind that in.

In China.

Our most distributed brand, which is a slow. The reason went ended in 40 cities, where today with a strong social media and with the strong aspiration of values with our brand as.

As we speak we can we are demanding more than 700 cities. So there are many many consumers in China that can only buy either online or traveling and travelling domestically today and historically also traveling internationally and so.

Is just the market commercially the market is designed to have a very limited overlap between the mainland China and behind the Hainan serves an enormous amount of consumer that comes also from tier three tier four cities areas, where there is not a lot of brick and mortar distribution.

And so Hainan cannot track this consumer in this moment also is a place where people go for holidays as part of these early days. There is a lot of the pleasure of shopping the pleasure of discovery. So the business in China is proving to be a great triumph builder more than in a cannibalizing business and.

<unk> is building trial of people that otherwise would not be able to try our problem. Then we'll repurchase them, we will repurchase them, maybe maybe again in their future travel, but most of the times in their everyday life in mainland China. So.

Obviously that is commercial competition the market is becoming very competitive.

There is a lot of play is.

Commercially there is it will continue to be intense competition, but there is every channel serves frankly very different roles and so our strategy is to be able to leverage each one of these channels in the best possible way, we did the on maximizing the coverage and the service to the total.

Consumers in China that interested in beauty and overtime to be to be able to better differentiate the scope of the channels and how how the consumer will be served by the different channels, but I think I want to say Hainan had in at least the last number I've seen over the 80 million visitors.

In the last year. So if you think that <unk> serves the entire middle class because it is domestic travel you don't need to add the passport so the today.

Our knowledge about 12% of Chinese consumer Ed Prospers, even even when even when international travel will restart.

There will be even limited cannibalization versus international travelers, because heine, which serves many consumers that do not plan to travel internationally.

So we are very positive on the long term and very positive on the ability to serve the consumers using different channels, which is our strategy.

Thank you. Our next question comes from the line of Wendy Nicholson with Citi.

Hi. Two things if I can when you were running through the brands and what's growing for you on what's doing especially well I think you called out La Mer first and I just wanted to clarify how much of <unk> growth is coming from China and travel retail or is the brand also growing strongly in the US and Western Europe non-travel retail. So that's my first question and then second thing.

Two things if I can when you were running through the brands and what's growing for you on what's doing especially well I think you called out La Mer first and I just wanted to clarify how much of <unk> growth is coming from China and travel retail or is the brand also growing strongly in.

In the U S and Western Europe non travel retail. So that's my first question and then second thing.

You said Tracy that there was only minimal sales in the first quarter from the pipeline fill into target and Kohl's, but now that we're kind of already into November can you comment a little bit about what youre seeing there and especially I'm curious what percentage of the sales that youre getting from target and Kohl's are in makeup as opposed to <unk>.

I'm just wondering that if those two channels really take off for you what kind of mix effect that might have on on your north American business. Thanks.

Thanks Wendy.

So in terms of la Mer La Mer is growing in pretty much every market. It. It's it's incredibly strong the brand does a fantastic job of innovating and so we're seeing growth from both new innovation as well as a continued expansion of.

New consumers with with some of the strategies that the brand is is deploying.

And we see very high loyalty and repeat with La Mer. So it is all around even during this pandemic. It has been one of the constants in terms of in terms of the performance. In our portfolio and the team is just an absolute fantastic team. So the brand is doing incredibly well as it relates to Kohl's and Target and Ulta within target. And so far within Kohl's, we have seeded the initial doors, we certainly expect during the upcoming holiday season that we will see increased growth obviously in contribution from the distribution that we haven't and we're pleased thus far with the partnership.

In our in our portfolio and and the team is just an absolute fantastic fantastic team. So so the brand is doing incredibly incredibly well as it relates to. Kohl's and and target and Ulta within target and. And so far within Kohl's. We have seeded the initial doors, we certainly expect. During during the upcoming holiday season that that we will see. Increased growth obviously in contribution from from the distribution that are that we haven't and we're pleased thus far with the with the partnership.

Kohl's and and target and Ulta within target and.

And so far within Kohl's.

We have seeded the initial doors, we certainly expect.

During during the upcoming holiday season that that we will see.

Increased growth obviously in contribution from from the distribution that are that we haven't and we're pleased thus far with the with the partnership.

We're seeing more skincare growth and then makeup at the moment.

But again.

I expect that we will certainly with some of the strong gift programs that our makeup brands have we expect that we'll see more makeup growth in in the second second quarter.

Yes, I just wanted to add that our North America growth this quarter, which has been extraordinary. It's the result of manufacturers, it's definitely not yet the impact of Volta Todd, Target or a Sephora cost it was just at the beginning it only in the last months of the quarter. So it'ss the result of many other very positive signs also.

As a result, so manufacturers is definitely not yet the impact of Volta Todd.

Target or a sephora cost it was just at the beginning it only in the last months of the quarter. So is the result of many other very positive signs also.

Being gained shares in our categories. During the course that in Clinique in Mac La Mer in Bobby and Tom Ford Jo Malone. So he has a very broad growth across we are really ready with our innovation with a strong marketing programs. We had anticipated that they come back from makeup we had.

Strengthen our program and what we call. The makeup Renaissance in anticipation on the return to back to school or back to work and we had amazing program. So that we have added obviously the ordinary which is the number four brand in skincare in prestige U S to our portfolio.

<unk> is a combination of factors of improvement of the strategy and improvement of the execution in our northern magical organization. So it's a risk of course, and we do expect the ulta targeted a concept for that to contribute more in the next in the next quarters.

It's not the key contributing factor in quarter one.

Yes, I think this quarter really represents the diversification that we have within the business that we've talked about.

And certainly the North America performance to Fabrizio point represents that as well.

Thank you and with that that will conclude today's question and answer session. If you were unable to join for the entire call a playback will be available at one P. M. Eastern today through November the 16th to hear a recording of the call. Please dial 850 58592056 <unk>.

Passcode 6086.

Three to four again passcode 60863 to four that concludes Este Lauder conference call I'd like to thank you all for your participation and wish you all a good day.

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Q1 2022 Estee Lauder Companies Inc Earnings Call

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