Q3 2024 Olaplex Holdings Inc Earnings Call
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Greetings and welcome to the Olympics Holdings incorporated third quarter 2024 earnings Conference call.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded it is now.
Speaker Change: My pleasure to introduce Patrick Slattery, Vice President of Investor Relations. Thank you you may begin.
Patrick Slattery: Thank you and good morning, joining me today are Amanda Baldwin, Chief Executive Officer, and Kathryn <unk>, Chief operating officer, and Chief Financial Officer.
Patrick Slattery: 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, all Texas business and other matters referenced in the company's earnings release issued today.
Patrick Slattery: 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.
Patrick Slattery: Additional information regarding these factors appears under the heading cautionary note regarding forward looking statements in the company's earnings release and the filings the company makes with the Securities and Exchange Commission.
Patrick Slattery: That are available at Www SEC Gov.
Patrick Slattery: And on the Investor Relations section of the company's website at IR at <unk> Dot com.
Patrick Slattery: The forward looking statements on this call speak only as of the original date of this call.
Patrick Slattery: We undertake no obligation to update or revise any of these statements.
Patrick Slattery: Also during this call management will discuss certain non-GAAP financial measures, which management management believes can be useful in evaluating the company's performance.
Patrick Slattery: The presentation of non-GAAP financial measures should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.
Patrick Slattery: You will find additional information regarding these non-GAAP financial measures.
Patrick Slattery: A reconciliation of these non-GAAP financial measures most directly comparable GAAP measures in the Companys earnings release.
Patrick Slattery: A live broadcast of this call is also available on the Investor Relations section of the company's website at IR Dot <unk> Dot com.
Patrick Slattery: Additionally, during this call management will refer to certain data points estimates and forecasts that are based on industry pud locations or other publically available information as well as our internal sources.
Patrick Slattery: The company has not independently verify the accuracy or completeness of the data contained in this industry publications.
Patrick Slattery: Publicly available information.
Patrick Slattery: Furthermore, this information about the assumptions and limitations and you are cautioned not to get undue weight to these estimates.
Speaker Change: With that I'll now turn the call over to Amanda.
Amanda Baldwin: Thank you Patrick good morning, everyone and thank you for joining us.
Amanda Baldwin: This morning, we reported third quarter net sales of $119 1 million, which declined three point X percent compare to a year ago.
Amanda Baldwin: While this represents a sequential improvement from Q2, we did underperform our expectations, primarily due to weaker than expected results in our international business as we continue in our efforts to build the right foundation for the future.
Amanda Baldwin: Adjusted EBITDA was $44 6 million for an adjusted EBITDA margin of 37, 5%.
Amanda Baldwin: Coupling our third quarter results with our updated learnings we are revising our guidance for fiscal year 'twenty 'twenty four and now expect net sales in the range of 405 million to $415 million and an adjusted EBITDA margin in the range of 29, 9% to 36%.
Amanda Baldwin: As we have shared on past earnings calls we plan for 2024, I think here to begin our transformation, taking a long term view and prioritizing the strategies and initiatives aimed at building a healthier business.
Amanda Baldwin: While we now believe it will take longer than originally expected to achieve our goal.
Amanda Baldwin: Making great progress and taking the steps we believe are necessary for the long term health of the business.
Amanda Baldwin: Much of this work has been happening behind the scenes all at the same time this quarter, we announced three new innovative products are number five leave in conditioner bond shaper, Carl rebuilding salon treatment and number 10 bond shape, our crawl defining gel.
Amanda Baldwin: Although we are disappointed with this revised outlook for the remainder of the year I remain confident that we have the right strategy and are implementing the right actions to achieve a solid foundation for long term growth.
Amanda Baldwin: Oh Opex at its core is an innovative science enabled and pro inspired beauty company with demonstrated global appeal as a top brand in the prestige hair care category. All blacks had four of the five best selling prestige hair care products year to date, 2024 purse or continental retail tracking data of the.
Amanda Baldwin: Her market.
Amanda Baldwin: Our research indicates that the brand remains strong a positive associations to build upon including innovative reparative healthy and effective.
Amanda Baldwin: We possess a healthy balance sheet and strong cash generation, which provide flexibility and enable us to invest in future growth overall I continue to believe that the best years lie ahead for this company.
Amanda Baldwin: Let me walk you through three key assumptions that drove the revision to our full year outlook.
Amanda Baldwin: During the first nine months of 2024, we generated $93 4 million of cash from operations. We anticipate that 2024 will be another year of healthy cash flow.
Amanda Baldwin: Generation as we continue to drive an asset light model and high profitability.
Amanda Baldwin: We ended the third quarter was $538 8 million in cash and cash equivalents, an increase of $39 million from the end of the second quarter of 2020 for this cash is generating interest income at a annual rate of about 5%.
Amanda Baldwin: Long term debt net of current position of deferred fees was $645 million.
Amanda Baldwin: Now turning to our financial outlook.
Amanda Baldwin: As disclosed in the press release issued this morning, we are revising our guidance for fiscal year 2024.
Amanda Baldwin: Starting with the top line.
Amanda Baldwin: For fiscal year 'twenty 'twenty four we now expect net sales in the range of 405 million to $415 million down from the previous range of 435 million to $463 million.
Speaker Change: And Amanda mentioned earlier on the call the revision can be broken down into three primary buckets.
First.
Speaker Change: We anticipate weaker performance from our international business.
Amanda Baldwin: As Amanda discussed earlier, we have performed a deeper assessment of our international operations and discovered that the issues are more complex.
Amanda Baldwin: Originally thought we are now redefining our international go to market strategy.
Amanda Baldwin: Second while we believe we continue to observe sell through trends and our U S. Key accounts that are largely consistent on an absolute dollar basis with what we have seen throughout the year and our key accounts remain healthy core inventory position, we are not yet experiencing the anticipated lift in demand and the deployment.
Amanda Baldwin: If new sales and marketing investments.
Yeah.
Amanda Baldwin: And third we anticipate increased promotional activity during the holiday period across geographies relative to our previous assumption.
Yeah.
Amanda Baldwin: In the fourth quarter from their perspective of year over year net sales growth rate in order of magnitude, we expect our professional channel to be the most pressured followed by our direct to consumer and specialty retail.
Amanda Baldwin: We now anticipate adjusted gross margin in the range of 79% to 71, 6% compared to our initial assumption in the range of 72, 5% to 73, 1%.
Amanda Baldwin: We expect that the primary driver.
Amanda Baldwin: Of this decrease will be additional promotional activity during the fourth quarter and greater deleverage from lower sales volumes on our fixed warehousing cost.
Amanda Baldwin: Furthermore, we now expect full year 'twenty 'twenty four adjusted SG&A expenses in the range of $167 million to $170 million.
Amanda Baldwin: Compared to our previous expectation of $172 million to a 179 nine.
Amanda Baldwin: Specifically, we expect full year non payroll related advertising and marketing expenses.
Amanda Baldwin: And the range of $62 million to 65 million compared to our previous assumption of 66 million to $70 million as we continue to invest through our transformation.
Amanda Baldwin: Given the lower net sales forecast against our expectations for continued investment in operating expenses, we now expect more adjusted EBITDA deleverage than our prior assumption for.
Amanda Baldwin: For 2024, we expect adjusted EBITDA in the range of $121 million to $127 million or a margin of 29, 9% to 36%.
Amanda Baldwin: This compares to our previous range of $143 million to a $159 million or a margin of 32, 8% to 34, 3%.
Yeah.
Amanda Baldwin: We expect net interest expense to be $34 million.
Amanda Baldwin: And an adjusted effective tax rate of approximately 19, 5% for the year.
Amanda Baldwin: In conclusion <unk> has significant competitive strikes that we believe we can build upon to deliver consistent and sustained rate sucrose. We believe that we have identified key issues that have contributed to recent challenges as well as the appropriate actions to correct them.
Amanda Baldwin: Fundamentally we are working to build a better oil tax strengthening operating discipline, improving our business and financial processes and maintaining strong cash generation.
Amanda Baldwin: I look forward to sharing our progress along the way.
Speaker Change: I will now pass it over to Amanda for some closing remarks.
Amanda Baldwin: Thank you Catherine.
Amanda Baldwin: <unk> remains an incredibly powerful brand a leader in the attractive high growth prestige hair care category, and then an important strategic partner for our customers for a supportive of and excited about the direction. We are taking the business.
Amanda Baldwin: Trajectory of our transformation may have shifted we're progressing and making the tough decisions that we believe are necessary to create a healthy business set up for long term success. Ultimately we believe we're still in the early stages of the history of this company and that OPEC can perform at a higher level.
Amanda Baldwin: Remain optimistic as ever about the future.
Speaker Change: This concludes our prepared remarks, we will now turn the call back over to the operator for questions operator.
Speaker Change: Thank you we will now conduct a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: A confirmation tone will indicate your line is in the question queue.
Amanda Baldwin: You May press Star two.
Amanda Baldwin: Move your questions from the queue for.
Amanda Baldwin: For participants using speaker equipment. It made me not to.
Amanda Baldwin: Pick up your handset before pressing the star keys once again Thats star one at this time, one moment, while we poll our first question.
Yeah.
Speaker Change: Our first question comes from Jon Atkin with PD Cowen. Please proceed.
Speaker Change: Thank you for taking my question just curious on the overall consumer health, what Youre seeing is the salon and as well as your DTC in and on the retail side overall and you mentioned higher promotions do you think it's more because the consumers are cautious I would love any color there and I would love to do.
Amanda Baldwin: The deeper into what you saw in terms of your international business what are your.
Amanda Baldwin: Key assessment, there and how you're thinking about the opportunity going forward and what it could be as a percentage of the mix overtime. Thank you so much.
Speaker Change: Thank you for the question and thank you everyone for being here today.
Speaker Change: First of all I'll take the first half of that which is with respect to kind of what we're seeing around the consumer and I believe you are asking about both within the Salon channel as well as retail on the consumer more broadly.
Speaker Change: Within the Salon channel I think we've been talking about.
Amanda Baldwin: Earlier on throughout the year about overall trends within the Salon category, where Theyre certainly over time has been less frequent visits is one that hasn't changed in either direction in particular, I think getting sort of the way that people are thinking about their salon and certainly part of our focus and our strategy in supporting the silos.
Amanda Baldwin: Diluted behind the launch of something like bond cheaper rebounding treatment is is really supporting the stylus and making sure. There's more reasons to come back to this one so we're excited to really support our silent did not way with respect to the consumer overall, yes, we did make a very conscious decision as we were thinking about going into this quarter.
Amanda Baldwin: And watching what we're seeing out in the marketplace.
Amanda Baldwin: Overall, a more promotional environment, making sure we're doing that both typical promotions with which we do use from a strategic point of view around key tentpole moments, but also in trade marketing and overall support for our retailer partners both on the private side as well as to the consumer.
Amanda Baldwin: That is something that we're watching carefully and I think we see a lot of the things that many others have been talking about.
Amanda Baldwin: We go into the key holiday season.
Amanda Baldwin: With respect to international I have spent a lot of time very recently on this topic.
Speaker Change: The first thing I would say is that the enthusiasm for this brand is incredibly strong one of the things and one of the reasons why I joined the brand nearly a year ago, because I think it's very rare to find brands that have such global restaurants.
Amanda Baldwin: And that I have now seen on the ground.
Amanda Baldwin: Having been with consumers, having been with our retailer partners distributor partners sitting in salons around the world. This product really resonates and really translate I think what we've really learned and what we were talking about today was that in order to ensure that we really maximize that opportunity we need to be much closer.
Amanda Baldwin: We can't have arm relationships, we need to be much more involved with our distributor partners, we need to be better translating our marketing efforts all the things that we've started working on here in the United States that we are seeing early signs of opportunity around our marketing effort, we need to be translating those internationally and so in order to do that.
Amanda Baldwin: That does require making sure that we have fewer bigger partnerships that we are that was part of the rationale of bringing on it's going to be in that part of our business. So that we would be better partners.
Amanda Baldwin: To support this brand globally.
Speaker Change: Thank you.
Speaker Change: The next question comes from Ashley Hogan with Jefferies. Please proceed.
Speaker Change: Hi, Thanks, so much for your question. So I know you kind of talked about not yet seeing the marketing efforts provide any sort of lift or any more color on when you expect to start to see a lift and any changes you think you need to make to the strategy. Thanks. So much.
Speaker Change: Yes. Thanks for the question I want to make sure that we really pull apart what we are seeing within our new launches and what we want to see across the entire portfolio and draw a distinction between those two so if we if we would call you know when marketing sales education and you know I really believe that brand is the thing that we along with <unk>.
Amanda Baldwin: To drive this business going forward, we've spent a lot of time.
Amanda Baldwin: We've talked about getting the brands.
Amanda Baldwin: Right in the.
Amanda Baldwin: Pipeline right and what we had this fall with the opportunity to have two new launches and to start the process as well as building the marketing muscle in this organization. We've seen a lot of really good things happen out of that one of the things that we've highlighted in the call was our number five leave in conditioner I think that's really the first time as the brand is high school at all.
Amanda Baldwin: The full 360 approach a tight partnership with sephora, the ability to launch and with the SKU with them to really put the right experiential marketing Influencer marketing.
What kind of assets that might kind of language I mean, we've been talking about this really since the beginning about it's not just the money you spend but it's how we spend it and that launch is outperforming our expectations. So that's really exciting to see what we need to see going forward and the thing that is sort of driving our guidance today, we need to make.
Sure.
Amanda Baldwin: How that across the entire portfolio and naturally going to be phase two of this and as we think about going forward and how you didn't have a brand new CMO, Katy Goldman who joined US in July and she's fantastic and I think really helping us take this to the next level. So.
Do you think are a work in progress, but I do feel like we're on the right track, but we have again a brand vision that I alluded to I mean, I look forward to sharing more about that.
Amanda Baldwin: That becomes our.
In the out in the World and we have a great product pipeline and so we're going to get better and better at this.
Speaker Change: Thanks, so much.
Speaker Change: The next question comes from Susan Anderson with Canaccord. Please proceed.
Speaker Change: Hi, Good morning, Alex leg on for Susan on fourth quarter sales really does take a big step down.
Speaker Change: They did guide how much of that is from the international realignment.
Speaker Change: Expectations for how the U S will perform thank you.
Speaker Change: Hi, Thanks for the question Yeah. It International is the primary driver of what what.
Speaker Change: What is driving our fourth quarter.
Speaker Change: <unk> was down.
Speaker Change: While all three are very important Israeli is mainly the international and the impacts of the other two on international.
Speaker Change: Thanks, and then just a follow up.
Speaker Change: With international being reset and realigned.
Speaker Change: The expectations for sales to start stabilizing how long do you think it will take to kind of.
Speaker Change: Recreate.
Brand.
But you're trying to work with the.
The distributors over in Europe.
Speaker Change: Well, we're still working through our plans for 2025 and beyond and we're not really providing guidance today, but I can tell you a couple of things one.
Speaker Change: As Amanda and I mentioned earlier.
Speaker Change: Our home market on a weekend and week out basis or selling them or rather the heavily consistent. So we started in the U S and put in place our actions and that is starting to work. So then we just have to take that.
Speaker Change: Playbook and put it in international and as the man to describe she spent a lot of time market by market, creating a very detailed strategic plan, how we're going to go to mark Sue with them.
Speaker Change: This is a transformation it will take some time, but we're confident we've identified the right actions to drive future success and I'll just add that we are very fortunate to have a strong balance sheet and healthy cash flow that allows us to make the tough decisions and continue to invest for long term future profitability.
Okay.
Speaker Change: Okay.
Speaker Change: The next question comes from the Korean with Mario with Piper Sandler. Please proceed.
Speaker Change: Hey, good morning, Thanks for taking the question I'd like to touch a little bit on the cost structure and how we should be thinking about that for Q4 and heading into 2025 I believe the SG&A guidance implies.
Speaker Change: Meaningful step up in Q4, even though you're pulling back on some of the marketing and AD spend so can you touch on what what's driving that.
Speaker Change: Number and then as we head into 2025, how should we be thinking about your marketing and advertising budget them relative to the rest of the SG&A expense things.
Speaker Change: So thanks for the question I think that you know as Kathryn alluded to we we think it's important to continue to invest behind this brand in the fourth quarter and so we'll continue to make sure that we're building for the future.
Speaker Change: We arent providing guidance for 2025 at this time, but we certainly are learning a lot as we move.
Speaker Change: We've talked about before we're learning a lot from a marketing effort that will help drive our planning for next year spending a lot of time on this international business. So we really understand.
Speaker Change: What it's going to take to set that up for success.
Speaker Change: And as long as really.
Speaker Change: It's putting a lot of time on the road now with the future brand vision and really working with our partners to plan for next year.
Speaker Change: The next question comes from Andrea Teixeira with Jpmorgan. Please proceed.
Speaker Change: Hi, This is Shawn Barnett showed hurry on for Andrea Thanks for taking our question.
Speaker Change: Can you give us a little bit more insight on the international competitive landscape and your confidence level in bringing about fruitful results.
Speaker Change: Realigning distribution network and upgrading the marketing strategy outside the U S and Additionally, if I can tack another one understand but the guidance was lower mainly due to.
Speaker Change: The international space, but in quarters, three you're not the U S. Mark their topline also declined by three 3%.
Speaker Change: So if you could just tell us a little bit more.
Speaker Change: Like what is causing understand that it has to do with not seeing the lift in demand, but your new launches, we're doing pretty well that's for the commentary.
Speaker Change: Yeah.
Speaker Change: Well I can take that first one as we think about the international competitive landscape I think what you see is similar to a lot of a lot of different brands and different categories in beauty, you'll see some global players who will be very similar across the globe and then you obviously see.
Speaker Change: Some more local players and that's when I was speaking earlier about kind of really getting on the ground understanding the dynamics understanding the different channels.
Speaker Change: Being in Salon D with floor watching what's happening online really understanding what the consumer is seeing and what their and as well as the solid from what they were looking for in their respective markets.
Speaker Change: I would say is it's more similar than it is different there is certainly like anything else in global nuances to them to be mindful of.
Speaker Change: And we do have a business that has incredible reach and I think again I think there is a lot of appeal for this brand and the fundamental nature of her health of hair repair is something that is that is very consistent but how you might approach the market.
Speaker Change: And that's actually a big advantage to having a distributor network is that they are on the ground that they do really understand the nuances in their individual markets.
Speaker Change: Again this is about a closer partnership about having much more involvement and how we're going to market in these places and making sure that we're taking advantage of both of our sets back for abuse, Orissa borrowing brand and what it can do that for translating our marketing our sales and more education across the globe and network, we're leveraging those partnerships to be close.
Speaker Change: Through to the consumer to be closer to the stylist and really have.
Speaker Change: Kansas arms legs ears, our eyes on the ground for us. So that's really how we're thinking about that part of the business.
Speaker Change: And then I'll try to address your Q3 question you in Q3 our.
Speaker Change: Our professional sales were down four 6% and our retail sales were only down about 1.3 hundred <unk>.
Speaker Change: <unk> was up.
Speaker Change: And then I think your question was specific in the retail channel what are we seeing there yeah.
Speaker Change: One 3%, we did see some timing with some of our major customers with the selling of holiday kits and so that might be some of the variance that you see.
Speaker Change: Thank you for the color I'll pass it on.
Speaker Change: The next question comes from Lauren Lieberman with Barclays. Please proceed.
Lauren Lieberman: Great. Thanks, good morning.
Lauren Lieberman: And then I missed the.
Lauren Lieberman: Beginning of the call so apologies if you've kind of.
Lauren Lieberman: Directly answered this already but.
Speaker Change: I know you talked about it's taking longer to the lift on new product launches and the new campaigns, but also spoke about the success of the belief and conditioner. So I just wanted to see if you could talk a little bit about what it was like a postmortem on the what's not worked so far and why.
Speaker Change: As contrasted to the what has gone well with that leave in conditioner product and I know you talked about the 360 on the <unk>. So maybe it's more about the what wasn't working on earlier pieces. Thanks.
Speaker Change: Yeah, I mean, it seems the places where and as you can imagine we certainly have done a lot of our of.
Speaker Change: Of our own internal reflections and we have you know like I said.
Speaker Change: Our brand is BMO.
Speaker Change: <unk>, who joins us with an extraordinary background. She has really dug in Austin with her team and it is something that we will I think is very important as we go forward to make sure we understand what works and what doesn't.
Speaker Change: Continue to improve over time, that's certainly something I believe strongly and again I think what we really are seeing is that the brand resonates right. I think that's been a very important thing we can talk about that as we improve our marketing muscle.
Speaker Change: The pro responds at the client response rate that was really what we needed to understand this year. So that we have that information as we go into future brand vision as we bring on this team is build the muscle I think we'd go again, if there are some very important findings success one of the things that we talked about very early on.
Speaker Change: When I joined was the concept of creator Lynn marketing the concept and that is something that is certainly at the time of a lot of how.
Speaker Change: Beauty industry operates it is and it's something that we really believe that we can do very successfully. It was also the first time with the leave in conditioner that we hadn't experiential events, so a physical pop up.
Speaker Change: Did for fashion week here in New York, and I, certainly I have I'm getting to go to that.
Speaker Change: Yeah lines around the block, but I think that what was so interesting and exciting about that is that people really again, they wanted to see the brand they want to experience the brand, but they were also be curious butter.
Speaker Change: And that is something that we're seeing across the board is that people really do see the power of this product they're interested in how it works are interested in how to use it they want to know about that and we're getting better and better at explaining that I think that was also something that I called out very early on is that we have this unbelievable technical foundation.
Speaker Change: We need to get much better at explaining it and then waiting it whether its to our stylists to a consumer and social media influencers leveraging the power of that technology and translating it into the into language that really makes sense for the broader universe is something that I think I look at it as a really exciting proof point for what we're seeing.
Speaker Change: Today Okay.
Speaker Change: I'll always be of the mindset, we can do better we can and that's certainly something that Katie and I share and will continue to evolve our processes and marketing that we put out.
Speaker Change: Okay, great. Thank you so much.
Speaker Change: <unk>.
Speaker Change: The next question comes from Olivia Tong with Raymond James. Please proceed.
Olivia Tong: Great. Thanks.
Speaker Change: With respect international do you have a sense on how much has to come out of it and how long it will take and what the business looks like after you have right sized it and and more importantly, why do you think now is the right time to make the international changes you're planning, obviously, you've got quite a bit on your to do list already so where is the incremental.
Speaker Change: Manpower coming for them to drive more of a clean up in international markets right now thanks.
Speaker Change: So I think we have the good fortune of being able to make the hard choices right and to make sure that we're building for the future and so.
Speaker Change: I really believe and we've talked about that the power marketing sales education and innovation. Those are the things that are going to drive. This business forward. We believe that we need to realign that international business in order to take advantage of that so I do think it's important.
Speaker Change: Like I said, how often there is a lot of enthusiasm for this brand. So we're going to do this in the right way. So at this point I'm not going to be able to give a timeline.
Speaker Change: But it will do the same thing that we've done with everything else. In this business is that we're going to operate with a sense of urgency that's important in their transformation, but we're also going to take the time to make sure. We do the right analysis that we pick the right partners that we do this in the right way and those will obviously be a balance and we will certainly keep people posted as we work through this.
Speaker Change: Got it thank you.
Speaker Change: Thank you the last question will be from Rob <unk> with Evercore. Please proceed.
Speaker Change: Hi, Thank you you've kind of touched on this.
Speaker Change: A couple of times, but I, just maybe wanted to give it another shot and drill down a little bit.
Speaker Change:
Speaker Change: All of US who have been involved where you know incredibly impressed with the product the technology the efficacy.
Speaker Change: Right and then something happened and there were social media issues and and I think you're largely behind that correct me, if I'm wrong, but I think what also happened.
Speaker Change: As you know increased competition that may have confused the consumer with various different kind of bonding products.
Speaker Change: Or trying to play off your your claims but in different ways.
Speaker Change: So I guess the question is as you know.
Speaker Change: Consumer confusion.
Speaker Change: Part of the problem.
Speaker Change: All right and then to the extent that is and I know you talked about better communication, but can you be maybe even even more specific about how to deal with that.
Speaker Change: And how you can actually get across.
Speaker Change: That your unique.
Speaker Change: In terms of the <unk>.
Speaker Change: Science, and the efficacy and again I know I know you touched on it but it is so important I'm just wondering if you can kind of address it a little bit more thank you.
Speaker Change: Yeah, absolutely and I think it's a great question I think when you know what I was saying before a little bit about the importance of our ability to explain her clients that that is the crux of it right. How do you take something that is truly world class patented technology.
Speaker Change: It's complicated stuff right.
Speaker Change: I'll take that and how do you translate that to the consumer that says this is the place that we're really focused and again I think we're seeing some early signs of success and we've made some very material changes in how we're approaching social media how are creating content for.
Speaker Change: Certainly if you were to go on our Instagram page and you look at 12 months ago. When you look at it now it's going to look different.
Speaker Change: That I think is a good indicator of how we're approaching science in a different way and how we're rethinking how we communicate because I think you are right we need to make sure that people are clear on what sets us apart.
Speaker Change: Just because we know that we are not the consumer knows that and but the silence knows that and the related but not a not 100%. The same thing right. There is overlap and how they consume information, but theres also a unique challenge channels about it. So that's something that we're thinking a lot about as we as we continued to build our marketing muscle and then I think it's also the importance of it.
Speaker Change: Nation, and the importance of introducing new skus that allow us to continue to push the boundaries of innovation and I would say that I really believe that the brand is certainly harnessing the power of bond building technology, but this is way more than our bonds brand. This is a prestige hair care brand available. That's the category that we are that we can.
Speaker Change: Peter that is very important to establish the brand in that way and communicate that way.
Speaker Change: That's where I really believe increase our ability to really be a part of People's daily haircut routines.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Thank you at this time I would like to turn the floor back to Amanda Baldwin for closing remarks.
Amanda Baldwin: Well you know I'll just say thank you for everyone, who joined this morning, and please do reach out with any further questions.
Speaker Change: Thank you. This does concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a great day.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: [music].