Q2 2022 J M Smucker Co Earnings Call- Q&A Session
Hello, and welcome to the J M Smucker company's fiscal 2022 second quarter earnings question and answer session. At this time all participants are in a listen only mode. During the Q&A. Please limit yourselves to two questions and re queue. If you have additional questions. If anyone should require operator assistance. Please press star Zero wondering Kelly.
Phone keypad as a reminder, this conference is being recorded its now my pleasure to turn the call over to Aaron brought home Vice President of Investor Relations. Please go ahead Sir.
Thank you Kevin Good morning, and thank you for joining our fiscal 2022 second quarter earnings question and answer session I.
I hope everyone has had a chance to review our results is detailed in this morning's press release and management's pre recorded remarks, which are available on our corporate website at J M Smucker Dot com.
We will also post an audio replay of this call at the conclusion of this morning's Q&A session.
During today's call, we will make forward looking statements that reflect our current expectations and future plans and performance. These statements rely on assumptions and estimates and actual results may differ materially due to risks and uncertainties. Additionally, we use non-GAAP results to evaluate performance internally I encourage you to read the full disclosure.
Concerning forward looking statements and details on our non-GAAP measures in this morning's press release available.
Available today on this call are Mark Smucker, President and Chief Executive Officer, and Tucker Marshall Chief Financial Officer, We will now open up the call for questions. Operator, please queue up the first question.
Thank you if you'd like to be placed in the question queue. Please press star one on your telephone keypad. As a reminder, we ask that you. Please limit yourself to two questions and re queue. If you have additional questions. Once again Thats star one to be placed into question queue, if you'd like to remove your question from the queue. Please press star two one moment, please while we poll for questions.
Our first question today is coming from Andrew <unk> from Barclays. Your line is now live.
Great. Thanks, so much and good morning, everybody I.
I guess first one is on elasticity. Thus far you know volume elasticity has been lower than what you would forecast and below I guess, what you've seen historically and we've seen that for the group more broadly it sounds like in your for at least the way you're thinking about modeling for the fiscal second half that you're building and I'm somewhat greater elasticity than you've seen thus far.
Is pricing kind of kicks in that could start to hinder volume growth a little bit more and I'm trying to get a sense. Whether this is more out of conservatism or if you've started to see maybe more volume impact from pricing and more recently as it's kind of kicked in in a bigger way.
Andrew Good morning.
With respect to your question, we are increasing our full year net sales guidance by approximately $160 million or 2% at the midpoint.
It really relates to half associated with over delivery in our second quarter or $80 million.
That $80 million and what we really saw was underlying business momentum against our brand and growth imperatives, along with better than anticipated elasticity is from our initial round of pricing actions over the summer and early fall as we think about the back half of the fiscal year, we are anticipating incremental growth of 80 million.
Against our prior expectations.
<unk> of that is coming from continued momentum of volume mix and those better elasticities.
However, in our fourth quarter, we do have significant pricing actions, particularly in coffee and to a lesser extent in Pat associated with cost inflation as a result of that additional round of pricing that will take place in the.
Fourth quarter, we have factored in elasticity is against that pricing waiver action and so therefore that is all factored into into our guidance.
Great. Thanks for that and then secondly, you recently announced the planned construction of a new a new facility for <unk>, which I think is going to expect it to double brand sales to $1 billion in the next five years and it looks like that could essentially drive about one point of sales growth for the overall company per year I guess, there were about half of.
<unk>, 2% annual organic growth target kind of on its own. So clearly the brand is now big enough to sort of matter and move the needle and I guess my question is with the brand now about at about 70% ECB I guess, how are you thinking about driving the growth in this brand in terms of incremental distribution opportunities at current customers versus our and expanding ACD.
By entering new customers. Thank you.
Hey, Andrew it's Mark Thanks for that thank you for the question.
The first headline in response is that this is fundamentally about our strategy of investing where the growth is in other words, we've talking about reshaping our portfolio, which is not only about M&A, but it's also about making sure that we're.
Putting resources against our largest opportunities and <unk> is clearly one of those.
Think about 30 consecutive quarters of growth, mostly in almost every one of those quarters, it's been double digit.
This last quarter was about 33%, we're going to hit our half a billion dollar target a year early.
Which is fantastic and that has been supported by the investment in our second facility in Longmont, Colorado, which we continue to invest in and add lines there to support.
Getting to of course over a half a billion dollars and yes, you're correct. The investment in the Alabama facility, which we will break ground on in the next couple of months will support obviously further growth to what we believe could be north of $1 billion.
And so the reasons why the reason to believe is there's just a ton of runway on this brand I mean household penetration number one is still low.
It's only about 11%.
There is significant room for growth in household penetration number two we have not invested significantly in marketing and so we have not turned on any significant consumer spend.
And then there is runway.
Even just on our core peanut butter and jelly offerings whether that.
In particular places in U S retail certain locations and away from home, we have not turned on candidate yet and then there's opportunities in the convenience channel. So if you think about all of those plus the fact that we haven't done any really meaningful innovation. We just think there is a.
Ton of growth.
<unk> opportunities and momentum for that brand great. Thanks, very much and I have a great holiday.
Thank you you too.
Thank you. Our next question is coming from Ken Goldman from Jpmorgan. Your line is now live.
Hi, Thanks, so much good morning quick.
Quick question on free cash.
I think the implication is that you are expecting maybe around $80 million less in operating cash flow than you previously expected just looking at your guidance for that in Capex.
And you had highlighted inventory is the biggest headwind.
Can you just maybe elaborate a little bit on what's driving that expected inventory increase.
Long you you anticipate it lasting.
Good morning, Ken So our free cash flow target for the fiscal year is now $700 million.
Really what is driving that as the decrease in year over year earnings.
Along with the building of inventory associated with working capital requirements as you've noted inclusive of us taking up capital expenditures in support of the unprofitable facility expansion.
With regard to the inventory level is what we're trying to do is make sure that we have the right both raw materials and finished goods within our network in order to ensure that we are in stock on shelf and that we're also managing through supply chain challenges shortages, along with business continuity and so in the near term we should expect.
The levels of inventory as we work through the balance of the fiscal year and think about next year. We can provide an additional update on sort of the longer term implications.
<unk> inventory levels, but right now, it's just ensuring that we have have product to supply.
Makes sense. Thank you and then just a quick clarification I think you mentioned that productivity will help offset some of the inflation you're experiencing are.
Increasing the amount of cost savings that you were looking forward to I think was around $50 million is that number going up or is that still around the same amount that we should be thinking about for the year. Thank you.
And we are not changing our annual savings target of $50 million, when we talk about productivity savings associated with cost inflation.
What we are describing here is is that we are seeing low double digit year over year cost inflation that needs to be covered through rounds of pricing actions. In this fiscal year. We also acknowledged that over time to support both dollar profitability in percent profitability, we will need to continue.
Two advanced productivity.
In the form of savings across both our cost of products goods sold and our SG&A environments to support the overall long term health and profitability of the company, which we remain committed to.
Okay.
Thank you. Our next question today is coming from the wrong runs out from Guggenheim. Your line is that life.
Hey, good morning, everyone.
Good morning, everyone and congrats on the strong quarter. So my first question is really have put up.
From Andrew's question on Crystal.
Hugh you experienced very good strong sales with that.
Brian You mentioned in your per Mark that's really finalizing the.
The construction of a second online by the end of next fiscal year, so will that constrained.
And Crystal ball say I was going to in the short term or more into next fiscal year.
Laura you are correct, we expect by the end of our fiscal 'twenty three to have the phase two of the Longmont, Colorado facility complete.
And that will enable the ongoing expansion above $500 million sales target.
And so therefore, we do not see a constraint in the near term associated with the continued growth of that brand and business.
Okay perfect. Thanks.
Second question is about the guidance you are one of the very few food company to not only increase the topline guidance this quarter.
But also I mean, you EPS, despite a very volatile environment. So what kind of gives you that level of confidence or you know the world's worst.
<unk> delivered a cushion you've got built ins.
Thanks, Laura you are correct, we did raise both the low end and the high end of our guidance range by <unk> 10.
That really is broken down as follows we over delivered our second quarter by 40 cents, which was primarily driven by favorable business momentum and better than anticipated elasticity, along with some cost savings we.
We anticipate an additional 30 cents in the back half from that ongoing momentum.
Being offset by 60 <unk> of additional costs.
Partially offset by fourth quarter pricing actions and so therefore that 70 sent over delivery or increase to our expectation is being offset by 60.
Of course price impact therefore, supporting the dime that we increased both the low and the high end of the range. We do feel that we have a balanced guide at the midpoint at this point from the both the top line standpoint, and the bottom line. It gives us a balance and delivering in the fiscal year.
Laura This is mark I may just add that just.
To your point about confidence.
Yeah.
Clearly we are operating in a very.
Dynamic environment, where there have been a number of challenges, whether it's supply chain related or inflate.
Inflation what have you.
I think fundamentally the reason that we have.
<unk> to deliver is because our execution has been excellent our people have been extremely agile.
And been able to pivot and react or in many cases anticipate challenges.
Before they happen and so it's a combination fundamentally of.
Detailed supply chain management.
And then the combination of both consumer and customer execution, so marketing and sales execution working together in concert.
Along with our supply chain management, I think has truly allowed us to continue to deliver consistently over the last few quarters.
Hey, thanks.
Kent and keep up the very good execution. Thank you. Thank you for the support.
Thank you. Our next question today is coming from Chris Growe from Stifel. Your line is that a lot.
Yeah.
Hi, good morning.
Good morning, Hi, I, just had two questions if I could and the first one was just to understand in the quarter.
To understand how pricing is keeping pace with inflation. If we were to look at peanut pricing net of cost would that that was it was negative in the quarter are you seeing that catch up then in the second half of the year, we're still pricing should continue to accelerate or is it more so in the fourth quarter when more of that pricing kicks in.
So as you think about the walk for the year.
We took an initial round of pricing in the mid summer timeframe that is really benefiting.
The back nine months of the year and so that is coming in to help support sort of the initial look that we had a cost inflation coming into the fiscal year.
When we came through our first quarter, we had additional cost increases that we were seeing that we have taken subsequent rounds of pricing that we will start to see benefiting primarily the fourth quarter to your point.
And then lastly, as we have seen increased costs since our last call primarily in green coffee and in transportation, which is having us to take an additional round of pricing in our coffee portfolio and patent portfolio as well and we believe that benefit will come through in Q4. So to your point, yes, we are seeing that.
Nominal of the benefit coming through our Q4, and then we will pick up sort of the lapping effect into the balance of FY 'twenty three.
Okay that was helpful. Thank you.
I had one other question, perhaps for Mark and it's I guess I'm just curious.
How you see the health of your core consumer today, I know, it's a broad question and broadview, but but when we see the brands in general doing so well your brands gaining share private label, losing share we had some IRI data to confirm that again today.
And this is all occurring at a high level of pricing. So elasticities have been low and almost nonexistent for most companies does that change as we continue to move maybe into 2022 do you take a more.
Server to view of elasticity as a result of just all the pricing to the consumer and their spend at this point very strong growth in the brands.
Sure, Chris I think Tucker.
One of his previous answers talked a little bit about some of our elasticity assumptions going forward, but the success that we've experienced is.
A couple of things first and foremost, it's what I just said.
Lauren's question about.
Firing on all cylinders of managing the supply chain.
Through all of its dynamic changes as well as continuing to invest in our brands. During this time.
Not cut marketing in a material way, but continuing to invest we've had some world class.
Marketing campaigns, notably Jif.
Most recently as well as just the store level execution to make sure that we do our best work trying to keep our brands in stock. So I think it's those things.
What we believe is a.
An ongoing tailwind of <unk>.
Elevated at home consumption driven by the fact that folks are not going to go back to work the way that they once did there is going to be we believe a hybrid work model that is going to keep people in their homes more than they used to and so since we clearly are.
Sure.
Breakfast and lunch oriented that is definitely going to continue to to.
Support our business as well as as you know focusing on pet snacks milk bone alone was up 17% in the quarter. So.
We've just had some very nice results supported by both our execution and then some of this is what we view as a persisting tailwind of at home consumption.
Okay. Thank you for that and happy holidays. Thank you you too.
Thank you. Our next question today is coming from Steve powers from Deutsche Bank. Your line is now live.
Hey, great. Thanks, and good morning, everybody.
Maybe just circling back to productivity I think in response to I believe it was Ken's question earlier, you said you were not taking our productivity targets for 'twenty two.
But do you have updated your SG&A forecast lower despite.
What I would assume is upward pressure.
On some of those components. So maybe you could just help me out there in terms of where that.
Where that those savings are coming from and if they are just sort of a pullback on more discretionary items as opposed to a corp.
Corporate activity.
Yes, I think it's the latter of what you said, it's more of a pull back on discretionary items and just year over year favorability. So SG&A expenses are now projected to decrease by approximately 7% that's really due to the benefits of our cost management and organizational restructuring programs that we initiated.
A year ago.
It's also the benefit of lower marketing spend and that's really because we are lapping a pretty strong fourth quarter spend from.
From the prior year as well and also it's from reduced incentive compensation and other reductions in discretionary expenses and so I think it's more of the latter of what your question asked as opposed to the farmer.
Okay.
Helpful. Thank you.
And I guess, maybe shifting gears, just if we could circle back to a topic that was.
Sort of can focus last quarter and maybe just if there are any updates.
In your thinking around nutrition, the dry dog food side, and what you are planning to drive some.
Future reinvigoration there.
Sure Steve.
So first of all as we talked last quarter and this will probably be a little bit.
Repetitious.
Our pet strategy, you'll recall is really contingent on three legs of the stool. The first priority is pet snacks, because we are the leader in pet snacks, and continuing to direct resources to our pet snacks business.
Our cat food business, where we are a solid number two and meow mix has experienced significant growth continues to see quarter over quarter growth even sequentially.
So those two clearly where we have stronger leadership positions our priorities and then of course, the third leg is our dog food, where we're not as as much in a leadership position and recognize that and acknowledge last quarter that we are not going to experience the same level of growth on our.
Our dog food business as we would on the others, but it's still serves.
An important role nutrition, specifically, albeit a relatively small portion.
Did do well in the quarter with.
5% growth total.
Over the entire brand and actually dry dog about four.
1% growth sorry in the quarter so.
Yeah.
We did experienced some growth and we remain committed if you recall to the entire nutrition brand, which includes both snacks as well as some wet products as well and let me correct myself I thought it was right 4% was our growth on dry dog. So we did have a solid.
Quarter.
On dry dock on nutrition this quarter.
Very good thank you very much.
Thank you. Our next question today is coming from Bryan Spillane from Bank of America. Your line is now live.
Thanks, operator, good morning, everyone.
Maybe just to follow up a little bit on the inflation.
We're at a I guess now low double digit run rate year to date.
And so I.
I guess, what I was.
Trying to get some perspective, I would like to get some perspective on.
Do we think at this point that were.
Or to a peak in terms of just just where cost elevation goes in.
And maybe underneath that just so we're thinking about maybe the next 12 months, even just what are the what are the pieces that that continue to be areas of pressure.
May continue to put pressure and what what what might actually be.
Be a source of maybe more moderation as we look forward.
What are you trying to understand continues to elevate and.
What are the what are the probabilities that that rate of inflation as we come back a quarter later continues to move higher.
Brian Good morning.
You have noted we are experiencing low double digit year over year cost of products goods sold inflation, that's going to equate.
Over $550 million against our total cost basket at cops.
And as the key elements of that and we've been pretty consistent since the beginning of our fiscal year commodity commodity and ingredient inflation.
Packaging and transportation inflation as well and you are also now seeing some labor related inflation as well.
Part of that too is also just the discontinuity in the disruption of the overall supply chains.
They are factoring into that but as we see it a balance of our fiscal year, we think it's.
It still continues to increase but it's sort of increasing at a decreasing rate and we're able to sort of get our arms around the balance of this fiscal year based on what we see to date.
We continue to successfully execute and manage through this overall environment.
But I think looking much and beyond our current fiscal year is probably not prudent at this time just as we continue to continue to understand the signals beyond the current fiscal year, but I just wanted to get acknowledge the tremendous work that our teams have done to manage this overall inflationary environment not only on the price side, but also on the.
Productivity and production front.
Okay. Thanks for that and then I guess as we.
We're thinking about the incremental pricing actions right the incremental price.
Price that youre going to take back half of the year.
Is that.
Are those price increases really matching the inflation that that you know now and I guess.
If inflation continues to go higher or would it maybe.
Maybe suggest that.
At some point you'd have to come back for additional rounds of price increases.
Yes, Brian it's Mark.
The short answer is.
Our playbook fundamentally hasn't changed and so the intent is to fully recover over time.
Acting as a leader in our categories right and so.
List price movement as we had seen over these last several months are not unusual and because they are so ubiquitous obviously the tide raises all boats. So everyone is experiencing it I would also just highlight that in addition to.
These list price increases and our intent to fully recover within that we can use other levers like optimizing our trade spend.
And obviously the some of the productivity initiatives. The Tucker previously mentioned, but yes over time, our intent is to fully recover and as you've heard us say over the last couple of quarters. There is some timing lag from when.
Those actions hit the marketplace.
Alright, Thanks, Mark Thanks, Tucker happy have a happy Thanksgiving both of you.
<unk>.
The next question today is coming from Alexia Howard from Bernstein. Your line is now live.
Good morning, everyone.
Yeah.
So two questions here festival.
The guidance for fiscal 'twenty two obviously.
Change quite a bit over the last couple of quarters now that the modest guide down for the third quarter and things should get better with pricing in the fourth quarter. So there's a lot of moving pieces here.
If you have to summarize.
The key uncertainty sort of you know what.
One of the biggest uncertainty.
And in your mind as we look at the remainder of fiscal 'twenty two any glimpse of 2023, what would you how would you rank order them.
Alexia, it's mark I'll start here. So first of all I think it's what we've been saying in terms of just the supply chain uncertainties. How dynamic that is some of the labor challenges that exist across multiple industries I think if you think about those.
<unk> those are probably going to persist.
For the foreseeable future I think that's been a pretty consistent theme.
The way I would describe it is it's.
When I say dynamic what we mean is the challenges that exist can change week to week month to month, it could be an ingredient or a packaging component at one point it could be some isolated labor.
Challenges in a particular geography, so it really is somewhat of a moving target and the fact that we.
About six months ago did actually changed some of our organization structure, we became.
A flatter organization, which truly has allowed us to be very agile and pivot to those where we do see challenges very quickly and again I think it's that ability to be agile and to respond to this very dynamic environment that has allowed us to stay on top of.
Of it and continue to deliver products ultimately to our end customers.
Great. Thank you very much that's a that's incredibly helpful.
The follow up question.
You mentioned in the prepared remarks that you have an improved commercial model.
Investments in data capabilities.
Can you just describe what you can do now as a result of that that you couldn't do before so we get an idea of REO.
How the capabilities of developing thank you and I'll pass it on.
Okay sure Alexia Thanks for the question so.
The general headline is what I've said before it's just a combination of both consumer and customer marketing and sales execution does two things working together has been incredibly successful.
If I recall, we may have spoken a bit at Cagny last year about some of our new online capabilities that actually for just that by way of an example, with our retail customers, we have rolled out a capability, where we're able to actually see.
The outage is for example in store clusters or geographies and are able to react to potentially those out of stocks quickly and make sure that if we're in say a major metropolitan area with one customer that we can actually go in and target specific groups of stores and actually in.
Sure that were getting product on the shelves, whether that's even out of the backroom or not its truly very tactical but we believe that that that capability is one example of.
How we're able to quickly react and we do believe that that's best in class.
Great. Thank you very much I'll pass it on.
Thank you. Our next question today is coming from Robert Moskow from Credit Suisse. Your line is now live.
Alright. Thanks.
One of the.
Bigger surprises for me and there were several of them.
To see pet snacks growth so strong in the quarter.
The Nielsen tracking data doesn't really indicate that and I was wondering if you could be more specific as to where which channels you're seeing the snacks growth come in.
And then I had a follow up on labor when you talk about labor challenges to what extent is that challenges within your own four walls or is it really mostly at the distributor level.
And at the retail level.
Rob It's Mark let me start with your second question around labor.
<unk>.
It is systemic as you know and as I mentioned to Alexia. It is it is a moving target in terms of where we might experience as certain labor shortages I think it depends on the geography, sometimes in certain geographies, we may be compete.
<unk> for for skilled labor.
I would what I would tell you in general is that less skilled labor, which sometimes would be some in distribution centers.
Is the labor that probably moves around the most and we see possibly the most turnover.
But again I think we've been.
Very agile in adapting to the challenges and been able to stay on top of things for the most part but it is again.
It varies and it can it can shift over time.
Pet snacks I think in terms of a little bit more specifics, obviously, we have been supporting our pet snacks business with.
Advertising, which has been very effective and again some of the other capabilities around sales at the store level have allowed us to remain in stock and.
<unk>, specifically has been supported by some new innovation, which has actually done reasonably well also so it is a combination of all of those things that has been supporting our snacks business.
As well as.
Hum.
<unk>.
Milk bone specifically.
One other comment I would make.
Just from our channels I think we might have to follow up with you on the specifics of that but what we are seeing in our numbers is it typically growth across all channels and that the consumption growth that youre seeing is generally in line with our sales group.
Yes.
Okay I'll follow up later thanks.
The next question is coming from Pamela Kaufman from Morgan Stanley. Your line is now live.
Good morning.
I was wondering if you are making any adjustments to your marketing and promotion strategy for the year, given the stronger than anticipated demand.
<unk>.
No we are actually moving forward and basically sticking to our guns on our marketing plans are given the inflation across our portfolio more broadly.
Percent of sales that you would see will be down slightly versus last year, but our marketing budgets are very much in line with what they were last year.
Coffee is actually up slightly and so we continue to invest in our brands.
Thanks, that's helpful.
And clearly there is a lot of investment behind unprofitable given the strong growth that the brand is seeing.
There are other products in the portfolio, where you see opportunity.
Step up in Beckman and maybe you can touch on some of the innovation that you're working on you mentioned in pet treats but are there other areas where you.
We see particular opportunity.
And back then and innovation.
Yes sure.
That the milk bone for example is really around premium mutation and Theres a number of.
New milk bone products think about biscuits being dipped in.
Some other product peanut butter for example, peanut butter on them on a dog basket is one.
Those do very well and those are relatively easy line extensions for us to do and so we've done well on milk bone.
A really good example.
Meow mix, we've continued to invest in marketing there. So we've seen good growth on Meow mix, and then dunkin and boost stello in coffee both.
Our have.
They have maintained their households in fact, what we're seeing is that they are the two brands in the whole coffee category that have maintained their household both up.
Double digit and so continuing to invest in those brands as well and then finally just on folgers.
We know that the category continues to shift to K cups.
Keurig has done a great job just in terms of selling more brewers, and we think theres going to be probably a couple million dollars more brewers coming online and our Folgers brand has been doing fantastic in the K Cup space. So just shifting our portfolio again, where the growth in where the growth is going is really <unk>.
<unk>.
Okay. Thank you. Thank you.
Thank you. Our next question today is coming from Rebecca <unk> from Morgan Stanley. Your line is now live.
Great Good morning so.
We can all look at Smucker history of innovation across the both has been a clear home run.
But there have been a few stumbles of late and I'm. Just wondering if you could kind of share your product development process and what smokers does to set itself apart from others in this highly competitive industry.
Sure Rebecca.
The first.
As you mentioned, we had been focused a few years ago on fewer bigger.
And I think.
We did have a couple of stumbles there are.
<unk> thousand 850 brand, notably is still in the market and as sort of steady until our $18 50 brand, which was a relatively big launch in coffee as an extension of Folgers has done decent and remains in market.
What we learned through that process is that you have to have a combination of smaller and larger bets and if you get the mix right. It works I would highlight that even when we have had stumbles.
We are.
Growth from new products has been consistent with our algorithm over time and so even in the years, where we feel like some of our larger bets may not have been as successful as we hope we still delivered against our growth algorithm on new products.
And we really feel like right now we've got the mix right.
I've already mentioned several times about some of the milk bone and some of the other innovation that we've been seeing and just getting that mix right. Jif squeeze is another really good example of just taking peanut butter and putting in a different more convenient packaging has been very successful as well. So it's just at the end of the day.
It comes down to knowing our consumer and getting the balance right.
That's very helpful. Thank you.
And also so yeah. It was about a year ago now at your Investor Day, you laid out your new plan to redesign your marketing model and I was wondering if you could provide an update on how that strategy is progressing and as part of that if you can share like what percent of your media spend is.
Allocated to digital mediums.
Okay I'm going to the.
The last part of your question it varies by category, but it would be roughly 60 40.
Sure.
It's in the $60 40 to 50 50 range and what that means is mass media is important because it's all about reach it's about reaching as many consumers as you can.
Digital is more about targeted so you already have consumers and you're trying to make sure you keep them in your brand franchises.
Our an oversimplification, but that's sort of how we think about it. So you have to have both.
The question more specifically about marketing.
And I will try to do this in the broadest terms.
We needed to.
Fundamentally think about how we partnered with our external partners. We had many many agencies, we essentially consolidated down to one we partner primarily with publicists.
On consumer marketing.
In doing so it afforded us the opportunity to restructure how we are organized and line up with with them and maybe most importantly really.
Making sure that we were giving our partners the license to be to create very bold and consumer relevant creative. So the example, I would use again is Jeff.
Most recent campaign, where we have.
Our partnerships with Ludacris and Ghana, both rappers from two different areas.
They there was a tick tock wrapped challenge as part of that which we actually earned 7 billion views, which is unbelievable and it's certainly a record for us as a company in terms of the number of impressions that we made but also probably a record and of <unk>.
<unk> I think tick tack gave us if we were in the top 12, most influential campaigns. This past year. So clearly this has been a journey over the last three years.
Consumer marketing piece is definitely working and now with the combination of a more focused and refined sales execution model. The combination of those two things is very powerful and again a key to our success.
Great. Thank you so much.
Thank you we've reached end of our question and answer session I'd like to turn the floor back over to management for any further or closing comments.
Well first of all want to wish everyone, a very happy holiday and very happy Thanksgiving. This week. Thank you for being with US This week and I know, it's a holiday week and I think the most important thing is just to pause and thank our employees who have truly done yeoman's work manager.
<unk> This company through a tremendous number of challenges and really delivering results. So thank you most of all to our employees and thank you to our shareholders for your support.
Thank you that does conclude today's teleconference and webcast you may disconnect. Your lines at this time and have a wonderful day, we thank you for your participation today.