Inter Parfums, Inc. (IPAR) Q4 2021 Earnings Report, Transcript and Summary

Greetings, ladies and gentlemen, and welcome to the Inter Parfum Fourth Quarter 2021 Conference Call and Webcast. [Operator Instructions] Please note that this call is being recorded. I will now turn the call over to Russell Greenberg, Executive Vice President and Chief Financial Officer for Inter Parfums. Mr. Greenberg, you may begin.

Thank you. Good morning, and welcome to our 2021 year-end conference call. As always, this conference call may contain forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from projected calls. These factors include, but are not limited, to the risks and uncertainties discussed under the headings, Forward-looking statements and Risk Factors in our annual report on Form 10-K for the year ended December 31, 2021, and other reports we file from time to time with the Securities and Exchange Commission. We do not intend to and undertake no duty to update the information discussed. When we refer to our European-based operations, we are primarily talking about sales of Prestige Fragrance products, managed through our 73% owned French subsidiary, Inter Parfums SA. When we discuss our U.S.-based operations, we are primarily referring to sales of Prestige Fragrance products, managed through our wholly owned domestic subsidiaries. Following up on yesterday's news release, 2021 was the best year in our 33 years as a public company. Over the course of the year, our sales exceeded expectations in every quarter, leading to record net sales of $879.5 million, up 23% from 2019 and up 63% from 2020. Moreover, as compared to 2019, our earnings per share rose 45% to $2.75. As we discussed on our last conference call, when we announced initial guidance for 2021 back in November of 2020, it was a lack of visibility, not modestly or conservatism that led us to forecast around $615 million in net sales and $1.22 in EPS. While we were delighted by the upside surprise in orders throughout the year, we were even more delighted that we were sufficiently prepared to produce and ship the goods despite the continuation of the COVID pandemic and the supply chain disruptions that have ensued. I just want to go back to a few points raised when we announced our 2021 third quarter results. At that time, we stated that one of the main reasons why third quarter sales were much better than expected was because customers shifted some of their deliveries from Q4 into Q3, in fear of supply chain disruptions that might hurt their holiday season business. As a consequence, our third quarter advertising and promotion expenses were disproportionately low relative to sales and wound up with nearly a 26% operating margin. As unusual as the third quarter was, the fourth quarter was equally unusual but in a completely different way. If you've been following our company for any length of time, you will know that historically, our spend on advertising and promotion is heavily weighted to the fourth quarter because it encourages holiday season sell-through and follow-on orders in the new year. But in 2021, the fourth quarter spend on advertising and promotional items was exceptional, 36% of net sales because we attempted to reach our target spend of 21% of net sales for the full year. Despite the major advertising programs executed in connection with the large number of new product launches, we were only at 14% of net sales through the first nine months of 2021 and we reached 20% for the full year. The big spend on advertising promotion in the fourth quarter, coupled with deliveries shifting from Q4 to Q3, explains the modest loss in the final quarter of the year. Back to a discussion for the full year. For European-based operations, gross profit margins were 67%, 64% and 66% in 2021, 2019, respectively. Distribution in the U.S. for products that are sold by our European-based operations is handled by a 100%-owned distribution subsidiary. As such, those sales are direct to retailers and result in higher margins. Net sales of our U.S. distribution subsidiary increased 86% in 2021 as compared to 2020. This is what gave us to the increase in our gross margin in 2021. The launch of new products, including Montblanc Explorer Ultra blue, I want You by Jimmy Choo, Coach Sunset Dreams, Les Fleurs de Lanvin, Rochas Girl and Kate Spade New York also generated higher selling prices and higher gross margins. The weak dollar relative to the euro has always has a margin depressing effect, which partially offset some of the margin-enhancing effect from the other inputs I just mentioned. For U.S. operations, gross profit margin was 53%, 52% and 53% in 2021, '20 and '19, respectively. The 2021 rollout of new products for several of our brands, including Guess, and, Oscar de la Renta and very importantly, MCM, help boost our gross margins. As noted, new products have been generating for margins in the United States. SG&A expense as a percent of net sales was 46% in 2021 and 48% in both 2020 and 2019. The decline in 2021 was primarily due to lower-than-planned promotion and advertising expenses that will cause the higher-than-expected sales increase. Our operating margins came in at 17% in 2021 compared to 13% in 2020 and 15% in 2019. We closed the year with working capital of $465 million, including approximately $320 million in cash, cash equivalents and short-term investments. We had a working capital ratio of 2.9:1. The $133 million of long-term debt relates to our Inter Parfums SA new headquarters in Paris and the acquisition of those headquarters. Cash provided by operating activities aggregated $120 million for 2021, and that compares to $65 million in 2020. At year-end, inventory stood at nearly $200 million compared to $160 million at year-end 2020. Some other financial points worth mentioning. In our release, we said that 2021 was a highly productive year. sales per employee, of which we have 467 that translates into $1.9 million in sales per employee. In addition, despite the stellar growth in our business, our 2021 CapEx was a modest $5 million. As we announced yesterday, our Board of Directors approved a 100% increase in our annual cash dividend rate to $2 per share, of course, payable quarterly. You will recall, our Board had suspended the cash dividend in 2020 during the height of the COVID pandemic, when the rate was $1.32 per share and then we reinstituted it last February at $1 per share. Our Board made this decision in recognition of the excellent prospects for 2022 and for the coming years, combined with our strong financial position, all of which enables us to grow internally and judiciously invest in new opportunities while rewarding our shareholders. Yesterday, we affirmed our 2022 guidance, calling for net sales of $975 million, resulting in earnings per share of $3 per share, with the usual caveats about the average dollar-euro exchange rate and the COVID-19 pandemic. But we also added a third caveat, namely the financial impact from the geopolitical situation in Eastern Europe. On the latter point, beyond the human toll that the tragic war between Russia and Ukraine is taking, business of all kinds will be affected, including ours. The magnitude of the business impact due to war, sanctions and price volatility is hard to predict. But as per our 10-K in 2021, our sales in Russia totaled $43.4 million or a little bit under 5%. Now I will turn the call over to Jean.

Thank you, Russ, and good morning, everyone. I know we highlighted the many achievements of the past year in the press release we issued yesterday. Record financial results, the addition of several important new brands, the successful execution of major product launches, the acquisition of our new headquarters in Paris, and the establishment of a new Italian subsidiary among them. There is another accomplishment that delights me just as much, namely market share gains. That certainly happened in 2021 when our sales grew by 63% or 3x the 21% industry estimate quoted in womenswear daily publication last month. The 2021 growth rate for fragrance, which barely moved the needle in past years, far outpaced skin care and makeup. The timing couldn't be better because our business is nearly 100% fragrance. So rather than diluting our concentration into other aspects of the beauty business, we are laser focused on fragrance, growing our existing brands and new ones still to come. One of the reasons why fragrance sales are on fire is an outgrowth of a pandemic, in which something extraordinarily happened, especially in the U.S. where in the past, consumers bought and wear fragrance when they left home. During the of COVID, consumers increasingly bought fragrance to wear at home, to feel good about themselves, and as a personal sales indulgence. They purchased fragrance online more than ever, and they experimented with different scents. Happily, this trend has traction and is showing no signs of relenting. Another favorable trend that we see developing is the strong interest by young customers in China who are creating fragrance wardrobes around their favorite high-end niche brands. As exemplified for us in Ferragamo, Moncler and, we have and will continue to devote advertising and promotional dollars to attract and retain that expanding market. By the way, when we talk about advertising and promotional dollars, about 80% or more of that is in nontraditional media. We are talking about digital ads, social media like Instagram, Snapchat, TikTok and WeChat, influencers in the beauty, music, actors and sports fields as well as TV and billboards. Throughout 2021, one of the biggest challenges we faced was the disruption in the supply chain. So far this year, we are feeling continued pressure for sourcing components and finished products. In general, we are taking the steps we deem necessary to have sufficient inventory to meet our sales goals for 2021 - 2022, I'm sorry, and beyond. As we have stated, we have been carrying more inventory overall. We had also sourcing similar components from multiple suppliers and when possible, manufacturing products closer to where they are sold. We have had to become better forecasters of future needs as some items that require almost one year lead time. At the same time, we have been investing in more sophisticated inventory management systems and added more people to the inventory management function. In that regard, our U.S. distribution subsidiary for European-based product has encountered some shipping-related issues following a change in the distribution software by a partner. It should be resolved soon, but 2022 first quarter U.S. sales could be impacted. As planned, our operations in Italy have helped mitigate some of the supply chain disruptions. For example, the labor shortage in the U.S. and France are far less a factor in Italy. So we are moving some of our manufacturing to Italy. Well beyond our Ferragamo business, Italy is playing an important role as a point of manufacturing and distribution. Supply chain disruptions have and for the foreseeable future will have an impact on costs in raw materials such as glass, cardboard, wood and aluminum, plus rising energy costs and of course, shipping costs. Some items have increased only 5% to 10%. Other items have doubled in price. So on January 1 of this year, we enacted price increases ranging from 3% to 5% and another price increase of a similar magnitude will be enacted in August. As we approach $1 billion in annual sales, we have conducted a self-examination in all functions. In addition to rectifying shortcomings in inventory management that I just mentioned, we have elevated HR to a C level and recruited a Chief Human Resources Officer reporting directly to me. Attracting and retaining the best talent throughout our operation is as important as new product launches are to our future success. 2022 is poised to be another record year. The official launch of scents for Moncler, The Moncler Pour Homme and Moncler Pour Femme has begun, and the rollout will ultimately reach 3,000 doors. We have major new men's fragrance launches for Coach with Open Road, for GUESS, Do More and for Boucheron with Single. Most of the new product launches are brand extension or strong selling lines. For example, Montblanc is adding this quarter Legend Red. Jimmy Choo is adding I want Choo Forever. And we have also new sister scents coming to market for GUESS, Lanvin Clada Page, Kate Spade New York, and Oskar, et cetera. We will also have sales of Ferragamo fragrance for the full year as opposed to three months last year. And Dona Karan and DKNY fragrance will start on July 1 of this year. With no significant, Ferragamo fragrance are being sourced and produced in Italy and the brand's travel amenities business continues uninterrupted. To keep consumers, retailers and distributors engage with the brand, we have extension and billing for the Senior and Bright Lever collection later this year and the new pillar is being readied for full 2023, beginning of 2024. Among our objectives for Ferragamo is to streamline distribution, elevate brand perception and to establish a clear business focus regarding brand market distribution and investment. While the outlook for our business in 2022 is exceedingly good, there may be further upside as international travel resumes in earnest, supply Chain disruptions are largely behind us and the spread of COVID-19 wanes. Of course, the duration and impact of the heartbreaking war in Eastern Europe is a big unknown. But if you have questions, I will be happy to answer after. We remain on the lookout for additional brands. Our targets are names with established business reserve and start-ups. That said, we are also open to IDs with great potential that could be said about MCM in 2021 and back in time, Jimmy Choo, neither of which had established fragrance business when we teamed up. In 2021, MCM blew through our sales budget, 3x over, and Jimmy Choo is our second largest brand. Italian fashion brands are a priority for us, both ones with established fragrance business and fragrance. I was in Milan last week for Fashion Week, exploring potential opportunities. Finally, many of our existing licensors have multiple brands under their control and they may seek to have us partner with them on several of their brands. That brings me to what makes Inter Parfums an attractive partner for brand owners. As we have said before, we are small but not too small. So that we are able to devote the attention and resources necessary to grow a licenser fragrance business, which translate into higher royalties and broader brand recognition. Brand owners value the fact that we are a pure play in fragrance. Our distribution network has deep roots in 120 countries with expertise in their local market. And Inter Parfums also has a very strong balance sheet. We don't need to raise money to execute any business plans. Our new Paris headquarters will be operational end of this month, giving us greater brand capacity and enhanced coordination of our teams. And as I just mentioned, our office in Florence is now fully functional and ready to support and optimize the fragrance potential of possible additional brands. Now operator, you can open the lines for questions.

[Operator Instructions] Our first question comes from Linda Bolton-Weiser with D.A. Davidson. Please state your question.

Well, congratulations on a great year, and I would agree your business is like the strongest I've ever seen it in all these years. So it's really a great story. So I guess I just want to start out by asking about Russia because you do have a little bit more exposure than some of the other companies we cover. What are you seeing right now? I mean are you still shipping to Russia? Can you remind us that you a distributor there? Can you just kind of give us like kind of what you're seeing right now?

Yes, of course. Hello. The question, we are using a distributor and the distributor that we're using is owned by major - by a major retailer called, that has 45% market share in Russia. So owns more than 1,000 stores and all our products are sold in Litwin. As Russ said in his remarks, sales in Russia for 2021 represented, Russ, you said $40 million, something like that?

Yes, about $43 million, a little less than 5%.

$43 million. Yes. So in our projections, we are comfortable with the numbers in our guidance. We think that we will not be able to ship as much as last year. We have shipped already in January and February a good amount of products to Russia, but we will have to think that this will have to stop. For how long? We don't know. Is it three months, six months, the whole year, two years? Honestly, nobody knows. When I spoke to Russia yesterday, there were a lot of people in the stores, buying products. The devaluation of the ruble has not been seen by any customers yet. But of course, it's a main concern for the company. Russ, you want to add something?

No. I think we're approaching it very cautiously. We are monitoring the situation. As Jean indicated, we've revisited our budgets, and we're still comfortable with our overall projections. But it is something that has to be monitored on almost a daily basis. We are working with our distributor and with our sales teams to make sure that we have as much information as we possibly can.

Another thing also, as we are reducing our forecast for shipments in Russia, we are going to, of course, reduce our advertising expenditure in Russia. I'm thinking of a couple of TV campaigns that we are supposed to happen this year that we have put on hold for now. So it's a pity because we had a good position in Russia. We had some important launch. Ferragamo has a good positioning in Russia, but if the business is interrupted, we'll have to wait.

What is your biggest brand in Russia besides Ferragamo?

Is number one, then Jimmy Choo, then Ferragamo, then GUESS.

Okay. And then can I just ask about the pricing? You gave a lot of details on that. And so you've got another round coming in August. I'm curious if you've already announced that to customers? And if so, do you think that's going to pull forward some sales as they try to buy ahead of that price increase in the first half of the year?

This is a very good question because. When we announced the price increase that will happen in January of this year when we on that six months before the price increase. We had certain people who wanted to buy in advance, and we refuse to ship to a level that is higher than normal. It will happen again, and we will monitor that carefully. Basically, let's not forget that we still have a lot, a lot of supply chain issue. So the idea is not to overstock anybody. Right now, the inventory is fierce. We have to be very smart on where we put this inventory. So I will not accept for people to pile up on inventory in order to avoid the price increase or something like that. But it could happen. Not too many people had a problem with the price increase. Let's not forget that it's the first price increase that we've done in at least five or six years. Our products are still positioned at a retail price that is a little bit lower than the competition. So we do not feel any problems, it was absolutely accepted by all our partners, retailers or distributors.

Great. And then just one last one for me. I was just curious about the gross margin. I mean, why was it kind of down year-over-year and down versus third quarter? Was it just - I mean, why was that? Because I thought the distributors - the direct distributors would help the gross margin, and that would be kind of sustainable?

The gross margin was 63% in - for the year for 2021, which was higher than 2020. Russ, do you want to go in the details of the quarter?

Yes. With respect to the margins, our margins have been consistently better pretty much quarter by quarter. When you look at the fourth quarter itself, yes, there is a slight decline in the total from 64% to about - just about 63%, a little bit under 63%. A lot of that is really just timing and mix of product. When you're analyzing it and getting that close, it's very, very difficult. Most of the shipping activity from the U.S. distribution subsidiary, as I mentioned, its sales were up almost 80%. That is really what was driving the increase in the margin. There is also a little bit of a negative impact because of currency fluctuation. And that currency fluctuation really kind of raised its head towards the end of the year. Other than that, I really - I can't dissect it. I don't really believe I can dissect it any further than that.

And going forward for this year, for 2022, we do not anticipate a margin lower than what we had in 2021. We are working on improving the margins. So Russ, you're forecasting about 63% or 64% margin, something like that?

Yes, almost exactly the same as what we have in 2021. Our goal really is to raise the margin in the U.S. to bring that closer and closer to the type of margin that we can see in our European operations.

And this is underway. I looked at the numbers for the first two month. And in the U.S., where our margin is lower than in Europe, we are doing better in the first two months of this year comparing to last year in terms of margin.

Our next question comes from Wendy Nicholson with Citi. Please go ahead.

Congratulations on an amazing year. But I wanted to follow up. I know Jean, you said you've been in Milan and the fashion shows. But clearly, lots of folks are seeing sort of the great growth in fragrances generally. And I just wanted to sort of qualitatively. I mean it looks like you guys have the bandwidth to take on more licenses and maybe acquire some more brands. But are you seeing anything different in the marketplace sort of either from a royalty payment that the brands are asking for because it feels like it could get more competitive in terms of sort of the hunt for more brands? Or is that - are you not seeing that right now?

No, no, no, we see definitely some competition from other players. Let's not forget that we are not the only one, and we are maybe one of the smallest one. So we are - the hunt is on. People are looking for - more groups are looking for more brands. L'Oreal is looking for more brands and other groups also. So what we see is - what I'm selling to this new potential licensor is our success story. We took some brands that were handled by much bigger companies, and we were able to make it much bigger. For instance, Montblanc was with Procter & Gamble doing $50 million a year. We are now $250 million. Coach was handled by Estee Lauder doing really nothing. Coach is over $100 million under enterprise. So even though some brands where with bigger companies than us, I think that the attention that we can provide will make the difference. So this is - this is my pitch to them. And I think that Italy has still some fabulous fashion companies that do not have yet fragrance. But again, there is no guarantee. And again, we are not the only company competing for this business. So let's wait and see. But I think that the company is enjoying a nice momentum. People feel comfortable. We have also the resources to handle more. In New York and in Paris, we can absolutely take one, two, three, four, more brands and still not increase tremendously our G&A. So it will be interesting to see what we can do this year.

And that actually was - leads me exactly to the second question. I mean, Russ, the statistic you threw out in terms of sales per employee is off the charts and fantastic. But is there any part of the organization where you're feeling stretched, whether it's on the distribution side, the sales side, the creative side? Is there any part where - because obviously, I think you're a partner of choice because you've been so successful with so many brands. But is there any place where you're feeling stressed or pressured or you might need to reinvest more? Would it be on the COGS side or on the SG&A side?

It's really interesting that you mentioned that. With the success that we've seen over the last couple of years, especially moving through 2020 and into what is a record year in 2021, human resources has really been a very, very key focused area. As Jean mentioned in his remarks, we've created a C-level position for human resources here in the United States. Finding qualified people is a very difficult job function today. The world is a different place. We have open positions that we are looking to fill. There are opportunities. And although we are hiring and will continue to hire, this is an area that we really need to concentrate on very, very, very insightfully. The U.S. - from the U.S. operations business, we've practically doubled the business just in the last couple of years. And the growth trajectory is even greater than that going forward. So the human resource element is very, very important to us. We are really challenged with it and dealing with those challenges on a daily basis.

We have increased the human resource also in France. We've increased the department in order to make sure to attract the right talent to keep the talent. We have also created the HR function in Italy for the same reasons. So definitely, looking at the people, hiring the right people, strengthening the department. And if you ask me, where do we have some stretch? I will say, more in operation than anything, especially in the U.S., operations are becoming a little complicated, and we need to have more people, like I mentioned in my remarks, in inventory management and planning. This is key. Also, we are improving our IT systems, making some investments in this - in the department. The idea will be to get ready for the next step. We are, let's say, okay for now. But if a company is going to - if we want the business to grow above the - and well above the $1 billion, we'll have to continue to improve.

Perfect. And then, Russ, just last question, I'm sorry. The promotion and advertising as a percentage of sales for 2022, just phasing of it. Do you still expect, obviously, this year, it was heavily weighted to the fourth quarter? Do you think it's still going to be that heavily weighted? Or are we going to see sort of return to a more normal pattern in 2022?

I think it's still going to be heavily weighted in the fourth quarter again because that is the holiday season spending in that period, not only facilitates your sales for the holiday season, but it also supports your sales coming for the following year. So again, we will target our 21% that is the target for 2023 - I'm sorry, for 2022. And - but it may not be as high as the 36% that we spent in this particular fourth quarter, but certainly will be a relatively high number.

Our next question comes from Steph Wissink with Jefferies. Please state your question.

I wanted to just ask a little bit about some of the data statistics we've been seeing out there around some of the more high potency juices outperforming maybe some of the more neutralized fragrances. So talk a little bit about in your portfolio, did you see the same thing? Did you see some of your higher potency perfumes and colognes outperforming the other juices? And then secondly, related to that...

I'm sorry, I didn't hear. But can you repeat it slowly?

Yes. Just wondering about within the mix of your fragrance business, did you see sales of perfumes and colognes, the more high potency outperformed - outperform versus maybe some of the? So I think some of the industry statistics were saying there was a trade up yet or higher potency. Can you just share a little bit about what's happening within the category relative to kind of what's happening fragrance versus other categories?

Absolutely, absolutely. It's interesting that you ask this question. Absolutely. The more concentrated and by the way, more expensive fragrance are definitely in higher demand. We see that started actually a year ago, beginning of last year. We see - and that's why we are coming up with more extreme concentration and things like that in order to go after this market, definitely.

And any intention to extend some of your fragrance licenses into the home fragrance category?

Our home fragrance, we do have - by extension, we do have some home fragrance business. We do some candles. We make some diffusers. It's not a big business for us, and we make it as a peripheral products to our smell. No, the company does not intend to make it a subsegment by itself.

And my last one is really quickly, John, you were mentioning that your A&P spend continues to shift more digital. And I think in your opening remarks, you also talked about e-commerce was one of the strongest channels. Talk a little bit more about how you expect that to evolve over the next several years? Do you expect bricks and mortar to gain back some share from commerce? And does that change your marketing budget in terms of where the dollars are spent?

Yes, thank you. Yes, I think this trend is not going to reverse. It's going to be - today, we are at 80% digital and TV, we continue to spend on TV in certain markets, but this will continue. We have started also some good business with Amazon, and we are advertising also on Amazon and the return on investment is great. So I think that these trends are definitely here to stay. We are still - we still have to do some work on our penetration on e-commerce. But when you put together all the brick-and-mortar partners that have websites such as sephora.com or macys.com and you added to the business that we do with the pure e-commerce player, it's starting to become a very interesting piece of business. And we have hired, by the way, people just to take care of this part of the business. That's what I can tell you for now.

Our next question comes from Hamed Khorsand with BWS Financial. Please state your question.

Could you just talk about your ad strategy, especially at the beginning of '22 given that most of your - such as a higher degree of spending occurred in Q4, I would expect that you would see some sort of sales benefit in '22. So how are you going to adjust your ad spending given that kind of high degree of spending to happen in Q4?

Yes. We saw the - Russ, if you want to answer? Go ahead.

Yes. I mean, clearly, one of the reasons for spending as much as we usually do in a normal year, in Q4, is not only to drive the holiday season, but also to help drive reorders going into the new year. As we approach because of the spend, in - that we did at the end of Q4 2021, we're already seeing the benefits from reorders and increased sales just in January and February. We're clearly on target with respect to our internal projections. And clearly, it is the spend that we did at the end of 2021 that is driving the increase in that business. As John mentioned, too, there's a greater proportion of our spend is in the digital side. So we're dealing with working with influencers, working with other websites like WeChat and Instagram and so on and so forth. This is where we create content so that our customers can actually see and interact, if you will, with the different brands. And that happens throughout the year. It's just that there's a much bigger push at the end of the year because of the holiday season, sales season.

Yes. I think that by - we can see just in January, February and March, we are seeing the positive impact of this overspending that we've done in the last part of 2021. Sales are higher than expected in January and February, higher than projections and of course, much higher than last year. So definitely, we will continue to do this strategy, which is to overinvest in certain markets. And the markets that we have chosen is America and China for now. It was Russia as of two weeks ago, but we put Russia on hold. But this is where we think we have the best return on investment dollars.

Got it. And then the other follow-up I had was given your success that you had last year at 19.5%, 20%, any reason to gain a 21% spend? Are you overcrowding the ad market with spending?

No, no. I want absolutely to continue at this level. And why not more? If we are able to - if we're able to increase our gross margin, if we are able to leverage our G&A, I want to spend more and more in advertising. Again, this advertising is insurance that will have new customers that products will gain market share. So this is absolutely necessary. And I prefer to spend it and to keep it in our pocket. Let's put it this way. I think that with this type of operating margins that we have now 16%, 17%, it's good enough. Of course, we can always increase and maybe will increase. But if we increase, I would like to take some of this increase and put it in advertising. It's working, so we shouldn't stop. Is there any other call or any other questions, I mean?

Sir, there are no further questions at this time. I'll hand the floor back to you for closing remarks. Thank you.

Thank you. Thank you, operator, and thank you all for tuning in to our conference call. I just want to add that Jean and I will be presenting virtually on March 10 at the D.A. Davidson Consumer Conference. And hopefully, we will dive at the Jefferies Conference - Consumer Conference, which runs from June 21 and June 22 in Nantucket. Thank you, Linda and Steph for those invitations. And as usual, if anyone has further questions, please contact me by e-mail. Thank you for joining the call. Stay well and stay safe.

Thank you. This concludes today's conference. All parties may disconnect. Have a great day.