Q1 2022 Olaplex Holdings Inc Earnings Call
Okay.
And welcome to all of <unk> first quarter earnings Conference call. My name is Brandon and I'll be your operator for today at this time all participants are in a listen only mode. Later, we will conduct a question and answer session during which he may Dallas zero. One if you have a question. Please note. It is zero whatnot Star one as a reminder, this conference is being recorded.
I will now turn the call over to Allison Malkin Allison you may begin.
Thank you and welcome to the all blacks first quarter fiscal year 2022 earnings call with me today are Julie long, Chief Executive Officer, and Eric <unk>, Chief Financial Officer for today's call Julie will begin with a review of our first quarter performance and highlight the progress.
We made on our strategic initiatives, then Eric will provide additional details regarding our first quarter performance and fiscal 2022 outlook.
Following the prepared remarks, the operator will open the call to take the questions you have for us today.
Before we start I would like to remind you that management will make certain statements today, which are forward looking including statements about the outlook of all the Texas business and other matters referenced in the company's earnings release issued today.
Each forward looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected in or implied by such statements.
Additional information regarding these factors appears under the heading cautionary note regarding forward looking statements in the company's earnings release and in the company's filings that it makes with the Securities and Exchange Commission that are available at Www Dot FCC dotcom.
And on the Investor Relations section of the company's website at IR Dot all the plaques dotcom.
Forward looking statements on this call speak only as of the original date of this call and we undertake no obligation to update or revise any of these statements also during this call management will discuss certain non-GAAP financial measures, which management believes can be.
So in evaluating the company's performance.
The presentation of non-GAAP measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.
You will find additional information regarding these non-GAAP financial measures and a reconciliation of these non-GAAP to the most directly comparable GAAP measures in the company's earnings release.
A live broadcast of this call, which is accompanied by a slide presentation is available on the Investor Relations section of the company's website at IR Dot all the plaques dotcom. Please take a moment to log onto the website to view the slides that go along with management's prepared for.
I will now turn the call over to Julie one.
Thank you Allison and good morning, everyone I'm delighted to speak to you today as you can see from our press release, the first quarter marked an excellent start to the year with strong results.
Aligned with our goals with our fiscal year 2022 guidance of 36% net sales growth and 35% adjusted net income growth at the midpoint of our range.
But to deliver top tier industry sales growth and profit margin.
We are proud that our business outlook has only become more favorable since the time of our IPO last year.
This reflects the resilience of our disruptive business model rooted in science based beauty, the strength and health of our brand and the sustained positive in part of our competitive advantages.
As a pioneer in the goodness vacation O'hare, although plus continues to lead the market with application patent protected products backed by science.
We attribute our ongoing strength to our ability to improve health from the very source.
We have earned both industry and consumer award for number one selling product across the prestige had cast settling in which they compete.
We have an extensive growing community of professional stylist.
Allocate and educate consumers about the benefits of all the players and who we speak to every day.
And all of this achievement come when we are still at the very early stages of our business in the south of the school category in beauty.
You have heard me said this before and at best we mined it. We believe we have only just scratched the surface of all beauty journey.
Because had bonds Ah ha agnostic I want to emphasize that repairing strengthening and protecting had bonds. It's foundational for all had types and for everyone.
<unk> product assortment includes shampoo conditioner had treatment and styling products that are designed to repair have bought without damage on a daily basis, whether from brushing and blow drawing.
Nickel treatments, including but not limited to coloring bleaching strengthening highlights and digital pumps or the environment.
This proven treatment give us a platform to introduce new products and expand our end users in hair care to target overall health.
The global premium hair care category has performed well during prior economic cycles.
In the current environment that has seen macro headwinds from inflation.
Pressures, we have continued to see strong growth momentum.
M P D. The U S retail beauty category grew 19% in Q1 of 2022 versus Q1 of 2021.
In prestige hair care grew 32%.
Moving once again homeland billions beauty is.
According to NPD is tracking of U S prestige have caught up.
With the number one selling prestige heparin in the U S. In Q1 of 'twenty to 'twenty two.
And although plex has seven out of the top 10, best selling prestige have products in that period.
All Opex number five our bond maintenance condition are ranked first.
Total opex number three Oh Wow.
Have perfected shrinking ranked second.
And all of platinum before a bond maintenance shampoo ranked third.
We also consider all nimble organization and asset light flexible operation model as enablers that allow us to adapt quickly.
Our top notch supply chain team has helped us to navigate the difficult global supply chain environment to avoid supply disruptions, partially mitigate cost inflation and continue meeting demand with healthy levels of inventory.
With ample white space for growth to building brand awareness.
Spending the product portfolio and reaching new consumers in both the U S and internationally.
We believe we are just getting started to what's our long term ambition for growth.
Now turning to an overview of our first quarter results.
Net sales increased by 15, 8% from the 2021 first quarter once again, our top line growth was broad based across product.
General and geography, we are affirming our mutually reinforcing synergistic.
The channel model.
And adjusted EBITDA increased 47% with an adjusted EBITDA margin of 16, 8%.
This strong industry, leading result continued to be driven by our key competitive advantages.
But that's.
That's the heart of it all.
Science thing patent protected products that really work.
Our products are designed to meet our customers' per health here from the first.
And this is foundational to our success.
We created the have bonding category and also a multi stop regimen for treating maintaining and protecting health.
In the first quarter, we continued to see broad based growth across our portfolio of 12 products, which include three treatment product exclusive took approach panel and now nine product political views, which are so across our three chat.
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This a powerhouse products in each of their respective segments.
Let me share a good example of this from a professional channel.
According to the 2021 U S client pull survey based on point of sale data puts along sales of retail products.
<unk> put the top five best selling had kept product. So it's a long in the United States.
In addition, according to climb in 'twenty or 'twenty, one or low plex type of number one shampoo number one condition are number one styling products and number one and number two treatment product by revenue.
In addition.
Just on a quarterly independent brand health tracking which saw that all brand strength health stable or improved in Q1 of 2022 versus Q4 of 2021 across all kpis trial, including awareness.
Funnel conversion, where we have best in class conversion rates versus other brands tracked.
Future purchase intent and brand equity.
Second our growth is driven by a powerful innovation platform.
A year, we have established a proven track record of highly successful new product launches in.
In March we launched number nine bond protector nourishing lives in hats serum, which is another good example of our innovation leadership.
Our immuno technology and first anti aging formula, It's a waitlist silicon suites zero, which acts as a shield from pollution and damage for 48 hours and it can practice on all types and textures.
Number nine provide powerful antioxidant rhett LG with proven skincare ingredients.
Like to hair care and nourish it.
I drink.
Protect with hi, Ronnie asset and personal.
Father, it possesses a proprietary pollution prevention index measurement P. P. I for short and gives consumers proven transfer Natus result, with the first view Shawn.
Shai Manageability and Moisturize station.
It also offers the professional stylist.
<unk> and <unk>.
Also strict control of their Cline styling and blow out.
It has body weight and curb membership retention property.
We are proud to see number nine exceeding our expectations at Sephora U S number nine with the top 15 SKU for BSG for the entire month of March It was though it was only on the shelf for three days of that month.
In April at BSG. It was a top three selling SKU for the month.
On social media number nine has created a strong bus that has led to increased engagement and increase user generated content that demonstrate how retention before and after.
The success of number nine and of all of our products reinforces our innovation track record.
You have also seen our recent announcement of our AI virtual seamless.
Research shows that consumers want to see themselves reflected in our brand to feel connected and engaged at all apart. We believe that our whole team member with flex a synthesis of us that demonstrate our most authentic self and mirrors the community we serve.
No.
That's unique as we are.
As individuals.
All United by all of the pipe.
This once again shows our commitment to be leaning in on technology to bring all communities closer together.
Next we have a highly engaged community of diamonds and consume.
Our professionals are all of that rock and we will continue to innovate with and for them.
A continuous feedback loop, we have done and shows me both stay highly engaged and connected this is evidenced by the category leading engagement that we see from our community on social media.
For example.
Since our initial presence on take taught in 'twenty 'twenty.
Average engagement has grown from 650000 views per day, and 20 million views per month in our first 18 months to 2 million views per day, and 16 million views per month in the last eight months.
Representing a tripling of engagement with Tic Toc users.
We continue to rank as the number one prestige hair care brand on Instagram with $2 3 million followers.
And Hush type all of plus now has $13 5 million post.
Up from $12 3 million Poles.
During our IPO in September 2021.
And that's reported by Tripe dynamics, we will once again the number one earned media value brands in quarter one of 2022.
This shows how highly connected and engaged or community is and all our ability to continue to recruit new content creators to our social media platform.
Our next key competitive advantage is all synergistic omnichannel sales model.
Our three channels professional DTC and specialty retail a mutually agreed enforcing and synergistic.
With each channel able to drive growth for the other.
This harmony is an advantage given the noteworthy and individual merits of each channel to our overall success.
Our re enforcing omni channel synergies allowed and consumers to find our products wherever whenever and however, they want it to.
Especially as Covid restrictions are lifted with consumers returning to an in person shopping waldstein leaning in on DTC for convenience.
In Q1, we continued to see broad based growth across this channel.
Aligned with the expectations, we discussed during our last call.
In specialty retail following our success at Ulta, It's along the first quarter marked our entry into Ulta beauty across them more than 1300 retail locations and at ultra Dot com.
I am pleased to share that through Q1, all opex has consistently been a top performing hair care brand at Ulta beauty.
Turning to outperform our Ulta beauty's expectation.
This success has already led us to being recognized by Ultra F. 2021 launch of the year.
Wish we were able to achieve despite only entering autist along in October 'twenty, 'twenty, one and all stores and online in January of 'twenty to 'twenty two.
Although plug continues to lead as of course number one prestige hair care brand.
We will continue to expand our points of distribution with Sephora as retail opens in additional coal locations within the U S and expand the head count offering in stores across Europe .
In March before Europe rolled out its new headcount displays with all the players.
And co brand.
All of those locations.
We have also officially launched across 126 stores into glass, Germany quickly, becoming the number two had kept brand into glass, Germany, and look forward to increasing awareness and affinity for oil play with a potential customer base.
In professional we have our biggest month of in March at BSG.
We continue to be the best selling partner brand for long centuries.
Over 4000 Salon professionals have opted into our loyalty program since October 2021.
And we continue to build our brand in key international market, but all O clock, it's all distributors number one pair of cab brand.
In market, such as the U K and Italy.
In direct to consumer we continue to grow across pure play e-commerce retailers and through an expansion of our footprint of all Opex Dot com, where we are now in the U K, Australia, Italy and Spain.
Well as friends, where we launched in April .
While small we also continue to capitalize on what we believe.
Difficult long term opportunities for growth in China through our cross border relationship with Tmall global reach.
Recent data indicate that we achieved the number seven ranked overall hair care brand on Tmall Global Cross border in 'twenty, 'twenty, one and that ranking increased by 284 spot compared to the previous year.
Last but not least our focused disciplined and purpose driven organization remains one of our greatest strength.
To this end this year, we have hired two KFC and Taco to Charlotte Watson, Chief Marketing Officer, and John Duffey joined as General Counsel. We have also made additional key hires such as Christie Bell humor, that's all.
Our SVP accounting and principal accounting officer, and I would also like to recognize Emily or cell as our SVP of strategy and our transformation tools. We are excited to fill this important role with such high caliber and psychosis.
We are also advancing our ESG efforts by partnering with eco bottles to further incorporate environmental stewardship and human rights into a vendor selection and supply chain processes.
Maintaining proper ESG standards across our supplier base is meaningful to our business our reputation and to the impact that we have on the planet and its people.
In addition, we are also identifying providers, who can assist us in evaluating a plastic consumption and helped us evaluate a path to reach plastic neutrality certification on our plastic packaging.
In summary, we remain excited about our business and continue to expect fiscal 2022 to represent another year of excellent sales and earnings results and significant accomplishments towards our goals.
We believe the year will see us continue to capitalize on all opportunities to further grow brand awareness expand our product portfolio improve our productivity at existing points of distribution and broaden our distribution to new geography and trade partners.
With a strong track record of successful operating model and a talented team.
I believe we are in an enviable position to continue to execute our expansion strategy and bring more application science based innovation to market that solve real have problems.
Look forward to continuing to share our performance as the year unfolds.
And now I would like to turn the call over to Eric to review, our financial results in greater detail and discuss our guidance.
Thank you <unk> and good morning, everyone.
Judy mentioned, we had a strong start to the year with our competitive moat successful strategy, helping us to deliver top tier industry net sales growth and profit margins that were in line with our expectations.
And as our guidance suggests.
Positive about our business outlook.
Now turning to our financial results My remarks will mostly focus on our adjusted results you can find reconciliation tables to the most comparable GAAP figures in our earnings release, which will also furnished on form 8-K with the SEC today.
Highlights of our first quarter included the following.
Net sales grew 57, 6% to $186 2 million from $118 2 million during the first quarter last year.
Across geographies the quarter included a 65, 1% increase in the U S, which benefited from new distribution, including the introduction to all Ulta doors in Ulta Dot com.
Outside the U S net sales rose 45, 7%.
With noteworthy contributions from Italy, and France.
Germany, which included our retail expansion into do glass.
China also delivered strong growth through cross border e-commerce, albeit on a small base.
By channel.
Professional sales grew 62, 6% to $77 million or 41, 4% of net sales accelerating from Q4.
This channel was particularly strong in the U S U K, Italy and Germany.
The affinity for all Opex continues to grow further demonstrating old flexes ability to create the canvas that are professional stylists can use to deliver an exceptional experience for their customers.
Specialty retail sales increased 102, 5% to $64 3 million or 34, 5% of net sales driven by incremental distribution since the year ago quarter, particularly and also which saw strong replenishment. Following our Q4 2021 pipe.
And shipments.
And the impact of our new product launches.
Direct to consumer sales rose 15, 1% to $44 9 million or 24, 1% of net sales.
This performance was consistent with our plan as we lap the higher DTC trend experienced in Q1 2021.
<unk> Dot com grew versus Q1, 2021, due to increased traffic and higher average order value.
Through our expansion into the U K, Australia, Italy and Spain.
During our prepared remarks from our last call in March we said that we expected Q1, 2022 sales growth to be higher than the fiscal year guidance led.
Led by strength in specialty retail and professional.
The expected by D T C.
As you can see this is consistent with the results we've just announced.
Once again, our sales results reflect broad based strength across products geographies and channels.
We've continued to see evidence that our Omnichannel model.
Strength in retail and professional salons and online has been effective to meet our consumer wherever she decides to shop.
Even if that behavior changes from quarter to quarter.
To that point, while we continue to expect growth across our three channels. We are seeing a trend towards shopping more in physical stores and salon relative to traffic in D. C that we expect may continue in the second quarter.
Our gross profit margin was 75, 8% versus 79, 2% in the first quarter of 2021 Vista.
This decline was driven by cost inflation, and $4 3 million of inventory write off and disposal costs related to unused stock of a product that we re formulated in 2021.
Ingredient addressed in the re formulation is no longer permitted for sale in the EU and appeared only increased amounts in this inventory.
In the interest of having a single formulation for sale worldwide, we reformulate it on a global basis and are now disposing of unused stock.
Write off represents 230 basis points of the decline.
Adjusted gross profit margin was 79, 1% down 220 basis points from 81, 3% in the first quarter of 2021.
Due to cost inflation, and inbound freight warehousing and raw materials.
This was consistent with our plan.
SG&A was $22 3 million up 97, 8% versus the first quarter of 2021.
Adjusted SG&A was $20 6 million compared to $10 2 million in the first quarter of 2021.
Reflecting continued investments in our business, including <unk>.
$2 2 million in payroll driven by the expansion in our team.
$2 million in sales and marketing expense.
One 5 million and distribution and fulfillment costs related to the increase in product sales volume.
As well as $4 7 million and other expenses pertaining to general business growth, including public company costs.
To support long term growth.
SG&A was slightly less than our plan due generally to the phasing of some activities moving out of Q1 and into the balance of the year.
Adjusted EBITDA grew 47, 3% to $126 4 million.
Adjusted EBITDA of $85 8 million in the 2021 first quarter.
Adjusted EBITDA margin was 67, 9% compared to adjusted EBITDA margin of 72, 6% in the 2021 first quarter.
Net income.
Increased 36, 1% year over year to $61 9 million or nine cents per diluted share.
Adjusted net income.
65% year over year to $91 4 million or 13 cents per diluted share.
Included in GAAP net income in the first quarter of 2022, our two non operating charges.
First the successful refinancing of our existing secured credit facility with a new credit agreement resulted in $18 8 million pre tax charge for $15 million after tax representing <unk> <unk> per diluted share.
The $18 8 million includes an $11 million write off on an amortized debt fees and $7 8 million cash prepayment penalty.
We took a $4 3 million pretax charge were $3 5 million after tax representing <unk> <unk> per diluted share to write down inventory as previously mentioned.
Now turning to the balance sheet.
Inventory at quarter end.
$117 5 million compared to $90 4 million at the end of fiscal year 2021.
And versus $42 5 million.
End of the first quarter of 2021.
We're very pleased with the composition and quality of our inventory, which reflects the flexibility and agility of our supply chain our.
Our inventory levels of finished goods have increased in response to longer International Transit times.
And we have increased the supply of raw materials and components on hand to ensure we have the ability to meet demand even with industry supply chain delays.
We will continue to proactively manage the receipt of inventory moving up deliveries and leveraging our largely U S based sourcing to overcome macro logistical challenges.
Turning to cash flow.
Our quarter end cash.
Cash provided by operating activities rose to 72 million, reflecting the strong EBITDA performance and the benefit of our asset light business model.
As of March 31, 2022, we had cash and cash equivalents of $143 3 million.
Compared to a $186 4 million as of December 31, 2021, and versus 47 9 million at the end of the first quarter last year.
Long term debt net of current portion was $658 3 million.
Compared to $738 1 million at 2021 fiscal year end and $751 million at the end of the first quarter last year.
Turning to our guidance.
Based on our strong Q1 delivery that was consistent with our expectations. We are reaffirming the fiscal year guidance that we previously provided.
For fiscal year 2022, we expect.
Net sales in the range of 796 million to $826 million based on the midpoint of this range. This reflects 36% growth versus fiscal year 2021.
<unk> net income in the range of 363 million to $379 million or.
Or based on the midpoint.
35% growth versus fiscal year 2021.
And.
Adjusted EBITDA in the range of 504 million to $526 million.
Or based on the midpoint.
26% growth versus fiscal year 2021.
I mentioned earlier that we expected Q1 sales growth to be ahead of the fiscal year guidance for sales growth, which it was in part due to the fact that we were lapping a prior year period that did not include most of the impact from our 2021, new product launches and expanded distribution.
As we anniversary those events going forward. This year, we expect quarterly sales growth to be more in line with our full year range.
In addition, we expect adjusted gross margin to be sequentially lower in Q2 versus Q1 from worsening cost inflation and some channel and product mix. However, give.
Given our plan to continue to implement mitigating actions throughout the year, we're not expecting an impact to our full year adjusted EBITDA or adjusted net income guidance.
In summary that Julie mentioned in her introduction, we are proud that our business outlook has only improved since our IPO.
Our fiscal year 2022 guidance represents top tier industry sales growth and profit margins.
We believe all of this sets us apart from many of our peers.
We believe that our disruptive business model is working.
Business is strong.
And we are excited about the ample white space that we have in the U S and internationally to continue growing in the years ahead.
This concludes our prepared remarks, and we will now turn the call back over to the operator for questions.
Thank you. Thank you and we will now begin the question and answer session. If you have a question. Please press star zero, one touch tone phone, we ask that you. Please limit yourself to one question and if you.
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And from Jpmorgan, we have Andrea to Cheryl. Please go ahead.
Okay.
Andrea to share on your line is open.
He might be on mute.
You would want to take the next question is from Piper Sandler We got Correne Loeffler. Please go ahead.
Hi, good morning, everybody and thanks for taking the question and congrats on the quarter. So I just like to expand a bit on the guidance can you just talk a little bit more about the puts and takes here with such a strong start to the year. I guess, we are just a bit surprised to not see a raised your guidance here. So if you could just talk through what is all being done.
Centered.
Some of the current macro pressures were seen inflation etcetera, just a little bit more color here would be helpful. Thank you.
Hi, Craig it's Eric happy to take that question.
So as mentioned when we introduced that guidance on March eight our strong Q1 was already part of our assumptions and our Q1 results met our expectations. So we feel like we're right on track.
Pleased to reaffirm our fiscal 2022 guidance, which we feel is very strong at the mid points.
36% net sales growth, 35% net income growth and industry, leading profit margins.
Scale.
These results projected to be in the top tier of the industry.
Of course, what we think makes us stand out from mini hydro peers across industries is that we're not just high growth were extremely profitable with high cash generation.
And we're in a consumer replenishable category with strong growth tailwind in 2022 and beyond we really want to emphasize that.
Of course, we will continue to evaluate fiscal year guidance as the year progresses, but I would just say, it's early and we're in a dynamic macro environments. We believe this guidance is appropriate.
Thank you.
From Cowen we have Jonna Kim Please go ahead.
Thank you.
On the second quarter is also up against a pretty difficult comparison, especially in professional and retail channels, how should we think about sort of the growth.
In the second quarter as we think about the rebound in the professional channel and that you are opening more.
Store obviously.
Retail channels. So just curious on your thoughts there. Thank you very much.
Hi, Joanne I'm happy to take that one as well as Judy mentioned and I mentioned through the earlier remarks. This is the beauty of our Omnichannel model, we're there to meet our consumers wherever she or he is shopping.
So we are expecting continued broad based growth across channels overall growth to be within our fiscal year range.
And within that we mentioned that we are seeing this shift in consumer behavior to physical stores and the salons.
Even as they continue to use direct to consumer for convenience and we expect that trend to continue in Q2, so broad based growth across all three channels with a bit of rebalancing to pro and retail.
Got it thank you.
And we'll go out and try from J P. Morgan Andrea to share again. Please go ahead.
Hi, Good morning, everyone. This is drew on for Andrea. Thank you for taking the question and apologize but before so.
I just wanted to ask about the state of the consumer.
I think Julie you mentioned in the prepared remarks and in the release.
Premier hair care has been resilient through economic cycles. So just curious.
I guess, what youre seeing today, how that's informing the guidance and any sort of historical learnings from the industry.
Changes in consumer behavior.
Other consumers buy buy less but stick with the brand.
Maybe shift channels from from Solange, just anything there would be helpful. Thank you.
Thank you let me take this call this is Julia and happy to address this.
It's a great question because what we are seeing is that Eric has mentioned the beauty category, especially in HAE is very resilient, we continue to see really strong growth across.
Not only the prestige had category, but also in beauty and the market. Because this is a resilient even with the economic downturn and the pandemic. We are still seeing demand for our products because it is a replenishable.
You know you heard Eric talk about it.
Pat remarks, the beauty of our Omnichannel wishes, both synergistic and reinforcing is that it allows the consumers to really find us whenever however, and wherever they want to and so as COVID-19 restrictions are lifted.
Seeing the ebb and flow when they are able to go through the salons with in services.
Well as to retail in store experience and then leaning on DTC for convenience. So we continue to benefit from the consumers wherever they want to find ourselves.
I believe that answers your question.
Thank you please standby for just a moment.
Come on.
Okay from Raymond James We have Olivia Tong. Please go ahead.
Great. Thanks.
I have a couple of questions hopefully.
Electively.
Easy one.
The fire out, but first in terms of the new products that you've introduced are you attracting new consumers or is it more widening penetration amongst existing old opex users and then just following up on a question around macro sensitivity.
Your consumer base is.
Probably more reflective of a wider base of income levels than the average prestige brand. So just wondering if you see any differentiation in terms of.
Purchasing activity or engagement.
Up and down the income level chain with respect to your consumers you have such a large and engaged social media community what are they saying to you and then just lastly on competition, obviously competition has.
Increased fairly dramatically.
Over the last 12 months just your view in terms of.
Of.
The competitive set and how it's changed thank you.
Thanks, Olivia for the question, let me take this and I'll break it down I'll start with number nine.
What we are finding is as you can appreciate every time, we launch a product we try to make sure that it would.
Dresses are concerned that is through the continuous feedback loop that we get not only from our consumers, especially from a professional set so number and I really showcases the skin application of hair because they use this really great proven skincare ingredients in the pro.
And we have been able to see that we are recruiting new customers and that's the only reason why you can continue to see we are a top performer at sephora with the introduction of number nine.
As I've mentioned in my prepared remarks.
Top 15 skew our BSG in March when we were only there for three days and then in April we jumped to the top three selling SKU. So number night, it's definitely performing well for us and on <unk> Dot Com. What we are finding is number nine is actually being part of a purchase at that.
When people are buying we're not they will also buy other products from within online. So that is very encouraging. The other question that you ask about is.
The income levels because it is a replenishable with fight that now also affordable luxury product and as a result consumers. When we look at brand Health Survey has consistently said that this is a product that they truly.
Don't want to give up because they trusted logos on performance again very encouraging data point and then finally on competition you've heard I said this before.
We are happy with the competitive nature of this category and this is one reason why the category is growing as fast and stemmed from MPD reporting beauty and jenga grew 19% in Q1 and prestige hair care grew 32% and what this tells you is as more consumers are aware.
Of prestige Haircare and what it can deliver understanding that if they're using great skincare. It can translate to health care. It would just lift the category that much and given that <unk> is leading defining and shaping the prestige category we will.
We will win especially when the consumers are searching and looking for high performance patent protected and science backed products.
Thank you and we will not turn it back to Julie <unk> for closing remarks.
Well. Thank you again I know that this is a little bit shorter given that we are doing our Q1 results.
I look forward to speaking with you Eric and I will be talking to you a couple of times. A later this week, but we look forward to talking speaking with you in our upcoming investor conferences.
And when we report second quarter results in August Thank you everyone.
Thank you ladies and gentlemen. This concludes today's conference. Thank you for joining you may now disconnect.
Yeah.
Okay.
Okay.
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