Q4 2022 Coty Inc Earnings Call
Okay.
[music].
Good day, my name is Chelsea and I'll be your conference operator.
At this time I would like to welcome everyone to <unk> fourth quarter and fiscal 2022 question and answer conference call.
As a reminder, this conference call is being recorded today August 22022.
Please note that earlier this morning, <unk> issued a press release and prepared remarks webcast, which can be found on its investor relations website.
On today's call are skewed Nabi, Chief Executive Officer, and Laura Mercier, Chief Financial Officer.
I would like to remind you that many of the comments today may contain forward looking statements.
Please refer to <unk> earnings release, and our reports filed with the SEC, where the company lists factors that could cause actual results to differ materially from those forward looking statements.
In addition, except where noted.
<unk> of <unk> financial results and Coty has expectations reflect certain adjustments as specified in the non-GAAP financial measures section of the Companys release.
With that we will now open the lines for questions.
If you would like to ask a question. Please press the star and <unk> on your Touchtone phone.
You may remove yourself from the queue at any time by pressing star Q.
Once again that is star one to ask a question.
And our first question will come from Stephanie Wissink with Jefferies. Please go ahead.
Thank you good day, everyone. We have two questions. The first is just on travel retail China in ecommerce that was really stood out to us in the quarter and the year as big drivers of growth, but can you talk about your expectations for those drivers in your fiscal 'twenty three guidance.
Specifically, China, if you can give us some sense of what you're assuming.
And then sue I'm going to ask you a tough question I'm, hoping you're willing to answer but there's been a lot made about the carrying relationship in that portfolio of brands and I'm, hoping you can share a little bit about since you've arrived at Coty, how that relationship has changed the commitment you have to those brands and maybe some of the performance indicators that you're looking at to reinforce.
That relationship.
<unk>.
Yes. Good morning. Thank you so much for your questions. So first let me start with the first part which is around the.
The strength of the business.
The travel retail.
In China, I will say a few words about trying out later.
It clearly will probably be telling you konoski key contributors to this.
I would say our best in class performance that we had in Q4 and she's got 22, I really hope that everyone, who recognize today and now that you know this eight costa was up.
Results on par or ahead of the expectations of our guidance.
Of course, most of our peers is clearly hopefully going to be recognized as a great achievement, but that's fair.
You've got some point when it comes to travel retail and the fact that travel retail has been.
A key contributor it's true that for all of US specifically those who've been troubling.
You've seen that there is a huge surge in terms of travel worldwide.
This surge of travel of course.
States into you know UTC curious if I may say, specifically at Gucci.
Travel retail channel has been doing fantastically well during the quarter.
To take one example.
Triple digit growth in terms of what we are seeing there this is across the food.
Categories, our fragrances, especially if you see our highest and fragrances and more these are not all new fragrances are doing some testing to do well gaining market share. Thanks to travel became excuses, but also thanks to the level of innovations.
Our no new categories, because we entered the before the pandemic travel retail was the one category channel. It was menu fragrances notes or the return is fragrances prestige makeup of <unk>.
Skincare prestige makeup that we've been doing go so capacity figures. Thanks to all of you know the different brands would be BELBUCA makeup, which make up or more recently guided cosmetics, which had some tactic.
<unk> in the top airports around the world.
This channel is now fully benefiting from the repositioning of noncash there from a center to a skincare brand, but stop its first in Hainan.
Please spread into mainland China at Sephora as an exclusive partnership and we've seen that this brand has been posting a double digit growth in fiscal 'twenty two.
Which overall also had to do a lot with the travel retail.
Ethernet is clearly doing very very well. This is clearly I would say the case in the prestige division, it's even more the case on the consumer Beauty Division and this honestly I have to say, it's a big satisfaction for us because our brands are becoming darden brands on social media specifically.
No.
Of course, but also we know we've done the recent launch of secure that happened at the end of the cost curve and beginning of Q1, that's doing fantastically well, 100% co created with pizza occurs. So clearly this part of the business as a key contributor and you can imagine that in the coming Costa.
Turning to continue to be a key contributor when it comes to the China topic.
China.
Of course like everyone. We've been impacted by the Lockdowns at the end of Q3 and during Q4.
What we have seen in Q1 now two months into Q1 is that China has for cookies strongly rebounded you know what we are seeing a double digit growth not at the level of what we have inside the car you're up to but first I would say slowed down is because of the restrictions, but very very strong performance in overall.
China had a plus 11% performance in.
Fiscal 'twenty two to be compared to a market that was minus one so that's what I can tell you on the business side now concerning the second part of your question you know.
First of all I'm, not giving as you can imagine to do a lot of comments on on speculation, but what I can tell you is that our long term partnerships with our toothbrush and houses.
<unk> to be a great quality and the other thing that I would like also to stress that you're asking me. The question is that I'm, taking again this opportunity to repeat that no key life science is up to renewal before five years or.
So everything else is speculation, but these are the two key elements I wanted to share with you today.
Yeah.
Thanks, I hope this answers your two questions.
It does thank you very much.
Thank you.
Our next question will come from Nik Modi with RBC. Please go ahead.
Thank you and good morning, everyone.
Was hoping you could just.
To provide some context of course.
I think the resiliency of beauty, it's pretty clear during.
During downturns, but I wanted to understand within your guidance, how youre thinking about the macroeconomic backdrop.
This is going to be some kind of gradual very shallow situation or or are you expecting things to deteriorate further from here. So that's the first question and then the second question is just maybe an update on what's going on with inventories.
At retail.
Given that they're managing.
Inventories very tightly right now so just wanted to get some perspective on what's going on with inventory. Thank you.
Yeah. Good morning, Nick Thank you for the question. So again, what I can tell you when it comes to the Mac, who and what we are seeing currently which is the best indicator of what we will hopefully overseas that the beauty categories, not showing any sign of slowdown specifically when it comes to prestige, but also the opinion by the consumer.
Beauty.
Clearly consumers are more than ever I have to say Premier magazine, which is again I guess for all of US are kind of surprise in the middle of this pressure inflationary pressure, but the opinion raising more and more and during Q4, what we have seen is the movement if I take the fragrance category move.
Going from <unk> to <unk>, which are more expensive because more concentrated versions of sensing. This movement is confirmed and is only accelerating I have to say so we don't see consumers trading down we see them trading up in prestige behind category citrus fragrance, but also behind fatigue.
Citrus prestige makeup of the consumer beauty side, but that's the best preserved and if you listen to what some of our retailers have been sharing.
<unk> during the earnings it's clearly the premier mice after the consumer beauty, that's doing fantastically, well, probably I would say that in the past we were putting on one side.
Things back off pricer than things that are very very affordable I do believe that in beauty today, the market will be all about cool or desirable brands beat for mass or prestige are not good and not desirable brands beads from mass and prestige and those that are cool and desirable.
This condition is going to be protected over protective probably because this has become I would say adequacy recorded the fragrance index of the fragrance effect. It's clearly these products that are not on these mega pixel med fragrances are really concerned today by men women gender these lots.
Since et cetera in the you have to take this example, and these are categories that I do believe because they're making you look or feel better are becoming more and more essential categories, rather than what we could consider as you know categories. They would shop only when you when you. Okay. So I think it's really this.
This that they see in terms of macro concerns in terms of inventory used to answer the second part.
You know the retailers have indeed excess inventories and some other categories, but nothing beauty sector. If you listen again to the earnings from the different retailers. If there is one preserved category. It's indeed beauty.
Excellent. Thank you very much.
Okay.
Our next question will come from Avi Escalante with Evercore. Please go ahead.
Good morning, everyone. My question has to do with the consumer Division.
If you can give us an update with regards to the supply chain challenges that cover girl Hot down here in the quarter and also how you see the profitability of the business going forward it improve at least more than I thought in Q4. So if you can expand that that would be great. Thank you.
Yes, so I will take the question so high.
So beauty.
Just a question on the supply chain and I would say, it's not specific to consumer beauty I would make a conventional global anticipation. So number one you need a new issue we raised less coming on the screen. This is the result.
When we enter code we were telling us that this was going to really engage in Grupo grateful notes <unk>.
Oh EBIT from a global standpoint, obviously as our peers, we are not immune from the current supply issues, but definitely we are well protected and we know we have a big road, which is a new low ninety's.
Which is a good performance.
Well you know we are predicting this is this uniquely because you know we work now for several quarters on June 16.
Luke will succeed and good so we have built some contract on freight which will protect us. So this is really is a combination of <unk> and <unk>.
And as you can imagine and as you know you know this is a daily focus.
All the teams need to keep a strong improvement in the control on supply chain. There is a news or Angola on.
So peyton and semi stable is it true that the demand.
In fact, even higher so is absurd.
<unk>.
Ndtv need with what we have to manage where we didn't control and managing nicely zucker into equivalent instruments.
Youre absolutely right.
And the beauty profitability.
Moving better than some expected.
The reason is very simple, where now you don't give recon zip.
To get to a cycle.
We apply this approach for both segments. This is a case for prestige beauty versus a case for consumer beauty. So <unk>, which has really improved the gross margin to eat something which is really you know absolutely in the DNA of consumer beauty team. Thanks to all of the labor mix Sue.
Right you just mentioned that we have Premier magazine, all the new innovations Kangding fleet. So this is really a key element.
New innovation, we are launching a really unique.
New mountain and really helping defeat.
Lisa.
In terms of gross margin, we are doing pricing.
In the current context, but an interesting every time.
Every granular menu in a very detailed manner. So it is very very valuable and then optimize the cost of goods.
Because you know rationalization.
Portfolio with platforming.
Really the key element that we raised a few times that when we are doing a strong innovation for example in Korea.
We can use the simplest form them to replicate on Mexican Victor on <unk>, we do.
So that's really the two cycle and then of course, we are using this money to inject media in the MCP and you'll remember this is what we did in Q3.
Your education that indeed in Q3, we delivered over in CP was rather high in consumer beauty.
This was a constant.
Conscious decision to support all of the key initiatives and then didn't know delivering sustainable profitability in consumer beauty and obviously, we continue in fiscal 'twenty and beyond.
Yeah.
Thank you.
Our next question will come from Ian Tong with Raymond James. Please go ahead.
Thanks. Good morning. My first question is on fiscal 'twenty, three EBITDA expectations I see continued strong margin expansion.
Plan, but it looks like you are expecting about 200 basis points of.
Margin improvement in the first half, but fashion in the second half. So I was wondering if you could expand on that and what's driving the first half versus second half expectations and then my follow up question is around your view on celebrity Influencer led brands. It's obviously a space that you have a great color into.
But it is becoming more and more crowded so I'd love to hear your your views in terms of relative success of your brands versus others, how and how these branch differ in terms of growth expectations and support levels relative to the rest of your portfolio. Thank you so much.
Okay.
Thank you so I will take indeed, the first starting on the EBITDA expectation first of all.
I really want to.
To remind you that on.
On the metrics on topline and EBITDA, indeed them in our fiscal year 'twenty three guidance is completely in line with our midterm guidance that we gave you remember in November . So this is really you know consider me so robustness of the model and really good news.
Mental fiscal 'twenty two we continued in fiscal 'twenty three in a very consistent manner. So definitely no. So as I mentioned in our guidance like this but I would say.
Little poorly.
To go more in depth between each one.
So he's really definitely we continue the news of gross margin expansion disciplined on fixed costs investing in the MCP and delivering this full year guidance now navigating H, one and H two maybe some senior notes that we adapt unions a year, depending on the evolution of all the metrics.
So still too early.
I'll need to debate on this yes, I'm going to take a little bit money and this is I'm going to take the second part of the question she's around celebrity and Influencer led brands. So I.
I remember the question was around is it enough competitive the answer is clearly yes.
This is a very very competitive part of the business I think all of US we see a lot of brands launch it on a daily basis have much today. So it's very very competitive I do believe that there is a place where there is a kind of moment of truth, which is the blinking knocked out there.
There is a selection that's happening because the ability to have a go to market that as strong as it could go to market you know to be present in the hundreds if not thousands of source globally. This is clearly an element that selects and lots of DTC brands as potentially becoming bigger brands and.
By definition makes the competition.
Listen in.
In terms of the right level of investment as you can imagine these brands are both on social media. They have natural a N C. P. If I may call. It like this because of the reach of the different.
People, who are reaching to their communities on a daily basis, and therefore, there is less need to over invest in India like we do it on classical brands. So it's really this kind of I would say a compromise that we need to find depending on the brand and depending on the kind of innovation.
Thank you.
Our next question will come from Chris Carey with Wells Fargo Securities. Please go ahead.
Hi, good morning.
Yes.
Good morning.
So.
New launch activity was a.
Yes.
That came up throughout the prepared remarks, and a little bit in the Q&A session here.
A lot of focus was on the <unk> launch in the front half.
You noted that youre at 20% of your full year sales expectations already.
Is there any way you can frame.
The contribution from the <unk> launch will be to the outlook this year.
In general what the contribution from new launches will be to your fiscal 'twenty three.
Overall on sales and potentially on profit then I have a quick follow up.
Yeah. Thank you Chris for the question so again.
Hmm.
When it comes to the first part which is the contribution as you can imagine we do not share figures of how much. This brand is going to contribute to the growth of the company, but clearly the stock of this new line is very good you know we are above our expectations and something Thats for me and for all of US is it.
Very very strong sign is that the best selling items.
Not a single product the best selling item is the phone lineups nine skus, which is priced at $575. So forest east consumers are ready to spend $575 on a set of nine product. It means a lot in terms of how they trust.
And how they trust what we are doing together on this plan. So this is clearly.
This is clearly something that we wanted to share with you what.
What I can tell you about the fiscal 'twenty three guide it's not dependent on this launch it's clearly very broad base and this is another item I would like to insist on a lot. It's really that my German laws job and the job of all the people expertise to build a growth that's as balanced as possible in terms of geographies you have.
<unk> seen that.
Being overexposed to China protected this recently in terms of categories. We are working hard to make sure. We have all categories enhanced so that whatever happening in one category or the other we can accelerate in one category versus another in terms of brands that be independent from any brand.
Clearly this is something that's a key element that is part of the way. We are building the net revenues not only for fiscal 'twenty three but also into our aggregation that we presented to you a few months ago.
But in terms of what are the key building blocks for our fiscal 'twenty three fragrance launches and category growth clearly the biggest building blocks that we have embedded into this.
Okay. Thank you Sue the quick follow up would just be on you did note.
Yes.
The buckets of gross margin in the prepared remarks. It was also noted that <unk> is expecting modest gross margin expansion for the year.
I wonder if.
If you could maybe just frame.
Cadence of gross margin expansion over the course of the year and then perhaps any of the.
Key buckets, the puts and takes that you'd see that thanks, so much.
Yes, so I mean first.
First of all let me remind as you noted them in the gross margin expansion in fiscal 'twenty, two with close to 400 basis points. So you can really see that all the actions all the initiatives that we can place delivered strong reserves now definitely we continue the journey we see.
You have some initiatives that we are implementing.
<unk> gross margin expansion definitely not adjusting reason as we add each year and.
And confirms really as I just shared.
We are very confident you're in or moving to the mid sixties.
Well small gene by by 'twenty side, what are the ingredients what buckets. So let me take as a key elements number one is mix.
<unk> is a key driver of the gross margin and again, you'll see concrete results of what we have achieved in fiscal 'twenty, two which is really with the premium amortization of migrants.
Uh huh.
Each item fragments and also make trip and it makes state in DDS.
<unk>, but also in consumer beauty, we obviously all the new innovations that we're launching.
<unk> breakeven and sometimes even at the same level of prestige. So meekly Vickie driver and we continue in fiscal 'twenty, three and it's part of the strategy and all the initiatives that we have behind it.
<unk> two is definitely pricing.
And I can elaborate a little on this because this is a key element.
And in the low single digit price increase and the <unk>.
Beginning of calendar 'twenty two.
We are currently as we speak implementing mid single digits.
Price increases and this implementation doing very smoothly. So there is no impact on volumes.
And again, it's really quality of execution and we are also working on preparing a new round of price increase low single digits beginning of calendar 'twenty suite. So we are definitely from a top line standpoint visa visit events.
And then on cost of goods.
Definitely there was a strong headwind which is inflation.
So both Cumulus is slightly above 2% of net revenue.
This is what we had in Q4 and we have the same assumption for fiscal 2000 suites.
It's 2% in constant.
Cost of goods, we have some strong and tangible actions, which will help the gross margin number one is we get the effects of the closure of the extra lease spreads on spectral in Germany as you know.
We announced 18 months ago.
This decision we executed.
The team during the trial.
We'll monitor this was perfectly executed.
Any disruption and we all know <unk> is tough to know.
We are also working hard on.
On.
That's forming WNS reviewing.
Reviewing all the formula.
And the beauty of prestige and really with the objective to CDP signs of formula to stop to standardize on pursuit to ablate differentiation and by doing this we are making savings in procurement, but would screen manufacturing so.
These are really the.
The elements of origins.
<unk> gross margin expansion. This is uncapped Cherokee and the all in to win.
On Brita and this will keep supporting gross margin expansion in 'twenty, three and again same flywheel to excluding all of the key initiatives that we have easy growth agenda.
Okay, great. Thank you both.
Thank you. Thank you.
As a reminder, that is star one to ask a question.
And our next question will come from Steve powers with Deutsche Bank. Please go ahead.
Yes, hey, thanks, and good morning.
So maybe building on your comments earlier around balance across the portfolio I guess I was hoping you could frame for us a bit more detail just base case expectations in terms of the contributions from prestige versus consumer beauty within the 'twenty three outlook.
Given the macro comments, you made earlier and current momentum I'm guessing prestigious.
To again be an amplified drive driver of growth, but perhaps you could just talk through the magnitude and sensitivities there number one and then separately on China.
I guess just.
A little bit more specificity around your perspective on how that market is expected to grow in the year ahead.
And just how dependent your own business is on resumed to market growth in China at this point in its evolution in China. Thank you.
Good morning, Steve. Thank you for your questions. So let's start with the first part which is around you know how we are building such fiscal 'twenty three growth and.
Think part of the answer was in your question as you can.
There is a what we call that could be the fragrance index. That's happening is the last I don't know if this is clearly about.
This category clearly.
In the growth of the beauty category in the company in the U S. But globally. This category is 20% above the levels of 2019 globally here again, and we see it continuing to premium is to command higher pricing with a lot of innovations either from a seasonality niche brands or more mainstream brands. So clearly.
This is going to hold us.
During fiscal 2023.
Clearly, we will continue to execute on our makeup strategy costumes makeup strategy. There again the brands that we are having in this area now are growing super fast and therefore, they are going to be key contributors, even if the base is smaller so by definition in absolute value, it's a contributor but still it's a.
Q1.
We are for the first time starting to operate as food skincare line in China, I'm thinking about Lancaster, that's hopefully going to slowly, but surely become a key contributor in our growth agenda. So prestige by nature because of the markets and because of the fact that we're adding.
Categories is going to be a key contributor to fiscal 'twenty three I remind you that the prestige business is 60% of our net revenues, while consumer beauty is more or less 40%, but we are also quite bullish on consumer beauty, because we have incredible launches some of them started at the end of the.
Quarter.
Beginning about Q1, I'm thinking about <unk>.
In UK behind Aveeno brands, but having fantastic. The first stop is the first product that has been co created 100% with cheap tuck in mind with sticks occurs is not only creating the products, but also part of the campaign's holding in facing the campaign in front of consumers, but also in <unk>.
The U S cover girl, we are activating one of the most powerful franchise behind Colorado, which is simply ages simply Asia is the one that's the kind of line in the U S. It's really the only line, but some modern in terms of approach of the question around age. It sold about mixing you know beautiful skincare ingredients together with.
Performing makeup ingredients.
And this line every time, we put money in investment behind we see growing Super Super fast and we are also seeing including recently in the most recent news. So clearly this is I would say the way I would describe how we have built fiscal 'twenty three now when it comes to China. What we are seeing is that you know of.
Of course, they have been locked down and they have been pressure on consumption, including on e-commerce, but what we are seeing now two months into the first quarter of fiscal 2003 at least for car T is that the.
The spike in our sales is back to I would say at levels that are not the same as the ones. We had beginning of calendar 'twenty, two but very very strong double digit levels. So this is clearly something that we will count on and again for us think about something quite simple China is so small so coty that ended.
We do just doing the right things ease of potential upsides, but the whole business and therefore for the company.
Thank you.
Our next question will come from Cory <unk> with Piper Sandler. Please go ahead.
Hey, good morning, and thanks for taking my questions and congrats on the quarter. So I'd like to first kind of question a little bit more on what youre seeing in color cosmetics.
The recent strength coming from reopening in the summer season, having lots of why do you have an event. So is there any way to kind of parse out how much could be coming from the reopening and how much.
You know is more sustained strength going forward.
And then just touching on the reset and partnership that was announced.
We are excited to here.
But can you just expand a bit on what this partnership means for Cody and how.
Can we expect.
Access to kind of help the China and travel retail parks.
Faster and then any financial implications there that you can share with us would be great. Thank you.
Yeah. Good morning. Thank you for your question. So let me start with the first part which is around what we are seeing in color cosmetics and how much of this is driven by our reopening versus.
Its something thats more sustainable if I understood quite what the question. So what I can tell you is that what we have seen.
On top of the strong categories, that's where you know booming during the Lockdowns and post pandemic.
Anything that has to do with eye products be mascara grow products lost growth serum eye Shadows et cetera, we are seeing the rest of the categories back to growth, including with Colo, but not any kind of color interestingly the launches that are doing the best.
Equity and specifically I think about covergirl in the U S. It's you know the bonds the bonds, that's probably a mixing the right things that people are looking for which is on one side a hint of Colo and on the other side a lot of care in this.
This is Tony.
A sustainable trend if I may say this is clearly going to be here to stand. The test of time, there will be moments, where people are going to look for not pigmented makeup moments, where they will look for less pigmented makeup, but whatever will happen what I call skin side makeup or healthy makeup whatever is good right.
And this is the key trends behind the consumption of this category in the U S. But we also see the same things more or less around the world in other regions now when it comes to the partnership that you are referring to between <unk> and Alibaba.
What does it mean for Gucci and for the troubled momentum. We are of course studying the consequences of this partnership the only thing I can tell you is that.
There is something very strong is that we are all waiting for the Chinese consumers to be back to travel and therefore to add on to the travel retail huge figures remember I shared with you that travel retail is back to the levels. We can pre pandemic, but this is still with the minus 10%.
Minus 30% less passengers. So having you know all this our consumers back to this channel.
<unk> confirmed the importance of travel retail and I can tell you that this partnership also means that travel retail and China are more or less are telling us. The same story on op extremely linked to each other.
Thank you.
Our next question will come from Mark <unk> with Stifel. Please go ahead.
Yes, thanks, and Hello, everyone.
I guess first just on marketing spend and marketing.
Marketing spend 20% of sales in fiscal 'twenty two.
How do you think about where where that goes.
Three and beyond is there any particular benchmark, you're using and then sort of more specifically it was up 600 basis points as a percentage of sales year on year, obviously contributed to strong growth, but how do you think about the need to continue to increase that and the correlation with sales growth going forward. Thank you.
Yes, hi.
So indeed as you saw in 'twenty two I mean, we were able to step up significantly our level of HCP.
And now to be.
Range of the high Twenty's.
We are making very clear that the high twenty's.
Really for us from users.
Your weight levels.
And definitely within our flywheel.
Some things that you know we are kicking himself for fiscal 'twenty three now this neatly within the high Twenty's.
We need to wait and again the granularity is really how we spend the money. So definitely is released.
T of execution. So we are more than you do focused on Hawaii.
Can you please the allocation of this money.
We are seeing is defined.
<unk> dose in prestige and in consumer beauty.
Capturing the trends.
She has just explained and I want to deal with so you know on the move well balanced footprint. Because then we can navigate the many thrill geography.
<unk> balanced manner.
Category and also co brands. So this is definitely what we are doing and dedicating new initiatives and we need to.
And those are eight or nine to absorb and because of course, we are off to a chemo, but percentage of pet dogs, but he's also within CP.
We have some productivity and optimization initiatives.
Definitely if I take them and remember Timna, we are clean Oeser agency, <unk>, which may be less visible of course, new media is very feasible, but there are some.
So some of those early years, which.
I would say non working where we havent. So we easily when umbrella some strong productivity initiatives I can just give you. Some examples but sample fixtures marketing materials, which are these clinical area, where we have some optimization, but always with the same mindset.
Optimization productivity, we are doing in this line, we can reallocate into working media.
Definitely we lose the business agenda.
Great and then just.
Hello.
Yes.
Great Alright.
That's what I got cut off there I wanted to ask about just how to think about.
Margin profiles across the prestige businesses any material differences in thinking about the the licenses versus wholly owned brands and by category makeup skincare versus fragrance. Thank you.
No I mean, there is.
We don't enter this level of detail, but what I can tell you again.
Of course prestige.
<unk> as you know.
I mean high years in consumer beauty. This is effect, but again as I shared several times I mean, the gross margin agenda is valid for both segments.
A little more within prestige.
Beauty.
Definitely that through all the initiatives that we are making so.
Prestige makeup e-commerce, the Gibson geography, we mentioned about China. All these initiatives are really you know driving gross margin accretion. So this is really doing.
Right, we are taking the gross margin agenda.
Thank you to all thank you everyone. So again, thank you Mark.
So again.
We are ending the call right now Super Happy again to report. These results again best in class results and we hope to talk to you soon about what's happening in Q1. Thank you. So much. Thank you bye bye.
Ladies and gentlemen, this does conclude today's call and webcast. We appreciate your participation.
May disconnect at any time.
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Okay.
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