e.l.f. Beauty (ELF) Q4 2026 Earnings Transcript

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DATE

Wednesday, May 20, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chairman & Chief Executive Officer — Tarang Amin
• Senior Vice President & Chief Financial Officer — Mandy J. Fields
• Vice President of Corporate Development & Investor Relations — Kristina Casey Katten

TAKEAWAYS

• Net Sales Growth -- Q4 net sales rose 35% year over year; full-year net sales increased 25%.
• Organic Sales -- Q4 organic net sales, excluding Rhode, were up approximately 1% year over year and within prior guidance.
• Rhode Contribution -- Rhode delivered $113 million to Q4 net sales growth, accounting for about 34 percentage points of the total increase.
• International Performance -- International net sales climbed 75% in Q4 and grew 38% for the year, aided by launches in 14 countries with 8 retail partners.
• Gross Margin -- Q4 gross margin reached 73%, up 140 basis points from the prior year, primarily due to pricing, partly offset by higher tariffs.
• Adjusted EBITDA -- Q4 adjusted EBITDA was $59 million, compared to $81 million a year earlier.
• Adjusted Net Income and EPS -- Adjusted net income was $19 million, or $0.32 per diluted share, versus $45 million, or $0.78 per diluted share, last year.
• Tariff Impact -- The average tariff rate in fiscal 2026 was approximately 55%, more than double the previous year; 2027 guidance assumes a 35% tariff rate.
• Marketing & Digital Spend -- Q4 investment in marketing and digital reached 31% of net sales, compared to 23% in the prior year; full-year spend was 24% of net sales.
• Rhode Performance -- Rhode delivered over $500 million in global retail sales and $390 million in net sales, achieving 80%-plus net sales growth and the #1 beauty brand ranking at Sephora North America.
• Brand Diversification -- Non-e.l.f. brands now represent 30% of global consumption, up from 0% three years ago; skincare has increased to 23% of global consumption from 9%.
• Unit Volume Trends -- Unit volumes declined 5 percentage points in Q4, driven by a more pronounced drop in units following the August 2025 $1 price increase across all e.l.f. SKUs.
• Value Pricing Test -- Price reduction of e.l.f. Halo Glow Skin Tint from $18 to $14 led to a 38% lift on Amazon and a 36% increase across all retailers, including a triple-digit lift on TikTok shop.
• Leadership Changes -- Kory Marchisotto was appointed President of e.l.f. Brands, Oshiya Savur named Chief Marketing Officer, and Ekta Chopra became Chief Technology and AI Officer.
• Product Innovation -- Two of the top ten innovation launches this year were e.l.f. Lip Oil Sticks and Melting Lip Balms, offering premium features at a significantly lower price than prestige brands.
• Financial Position -- Year-end cash on hand was $290 million, an increase from $149 million the previous year; $400 million remains available under the share repurchase program.
• Supply Chain Shift -- Manufacturing outside China now comprises over 45% of production, up from 1% three years ago.
• Fiscal 2027 Outlook -- Net sales growth projected at 12%-14%, with organic net sales expected to rise 4%-5%; Rhode to contribute about nine percentage points of full-year net sales growth.
• Adjusted EBITDA Guidance -- Fiscal 2027 adjusted EBITDA targeted between $379 million and $385 million, implying 13%-15% growth and a margin of approximately 21%.
• Tariff Refund Potential -- e.l.f. Beauty is pursuing a $58.5 million tariff refund; guidance does not factor in the potential impact of these proceeds.

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RISKS

• e.l.f. Brand Growth Slowdown -- "e.l.f. brand's global consumption has moderated from high single digits in fiscal 26 to low single digits in the last 12 weeks."; management is "not satisfied with these results" and is implementing corrective actions.
• Unit Volume Decline -- Noted "a more pronounced decline in units" after the August 2025 price increase, prompting a renewed focus on value and unit velocity.
• Cost Headwinds -- Management expects "$15 to $20 million of incremental cost headwinds in fiscal 27," contingent on oil prices averaging $100 per barrel, citing inflationary pressure on commodities and transportation.
• Profitability Decline -- Q4 adjusted EBITDA and net income dropped to $59 million and $19 million, respectively, from $81 million and $45 million a year ago, primarily due to higher investment in marketing, digital spend, team, and infrastructure.

SUMMARY

e.l.f. Beauty (NYSE:ELF) delivered its twenty-ninth consecutive quarter of net sales growth, with significant contributions from the Rhode and Naturium brands, while organic sales growth slowed sharply and profitability metrics fell due to elevated marketing spending and investment. Management detailed major brand, category, and leadership diversification initiatives, highlighted the shift toward international markets and non-e.l.f. brands, and emphasized direct price actions and accelerated innovation in response to softening e.l.f. brand unit trends. The fiscal 2027 outlook incorporates substantial contributions from the Rhode acquisition and explicit plans for increased investment in value, technology, and marketing optimization, excluding potential one-time tariff refunds and unquantified impacts from additional pricing initiatives.

• Rhode, acquired less than one year ago, is projected to drive roughly $140 million in net sales in the first four months of fiscal 2027, with further growth expected from global retail expansion.
• Manufacturer diversification, with over 45% of production now outside China, aims to mitigate tariff exposure and aligns with evolving global supply strategies.
• Operational risk is indicated by management's explicit concern about recent unit volume declines and a slower start to spring innovation, which have not been fully incorporated into forward-looking guidance.
• Key leadership appointments, including a newly established President of e.l.f. Brands and Chief Technology and AI Officer, reinforce the strategic focus on brand expansion and digital transformation.

INDUSTRY GLOSSARY

• ERP: Enterprise Resource Planning; integrated software used to manage core business processes such as finance, supply chain, procurement, and services.
• Connected Commerce: Integration of digital and physical shopping experiences to create seamless consumer engagement across channels.
• IEPA Tariffs: Refers to import/export tariffs specific to products or components, addressed as a key cost headwind in the company's supply chain.
• Linear Foot: Retail industry metric representing the amount of shelf space allotted to a brand or product in stores, a key driver of category growth and space gains for e.l.f. Beauty.

Full Conference Call Transcript

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Kristina Casey Katten: Thank you for joining us today to discuss e.l.f. Beauty's fourth quarter and full year fiscal 26 results. I am Casey Katten, vice president of corporate development and investor relations. Melinda today are Tarang Amin, chairman and chief executive officer and Mandy J. Fields, Senior Vice President and Chief Financial Officer. We encourage you to tune into our webcast presentation for the best viewing experience, which you can access on our website at investor.elfbeauty.com. Since many of our remarks today contain forward looking statements, please refer to our earnings release and reports filed with the SEC where you will find factors that could cause actual results to differ materially from these forward looking statements.

In addition, the company's presentation today includes information presented on a non GAAP basis. Our earnings release contains reconciliations of the differences between the non GAAP and the most directly comparable GAAP measure. With that, let me turn the webcast over to Tarang.

Tarang Amin: Thank you, Casey, and good afternoon, everyone. I am proud of the e.l.f. Beauty team for delivering our 7th consecutive year of industry leading results. In fiscal 26, we grew net sales 25% and adjusted EBITDA 13%. Q4 marked our 20-ninth consecutive quarter of net sales growth. We are 1 of only 6 public consumer companies out of 546 that has grown for 29 straight quarters, with over 20% sales growth per quarter. We have an incredibly strong portfolio of brands. Out of approximately 1.8 thousand cosmetics and skincare brands tracked by Nielsen, only 14 have surpassed $200 million in retail sales. We have 4 brands that surpass this threshold.

Each built on the same winning combination our value proposition, powerhouse innovation, and disruptive marketing engine. Our fiscal 26 results by brand reflect the strength of our portfolio. Starting with e.l.f. Cosmetics. E. L. F. Cosmetics delivered approximately $1.8 billion in global retail sales this year, and we continue to drive industry leading market share gains. In fiscal 26, we increased our US market share by 115 basis points, the largest share gain among the nearly 1 thousand cosmetics brands tracked by Nielsen. This marked our 20-ninth consecutive quarter of market share gains. A 29 basis point increase over these past 7 years, For perspective, the next highest brand grew 240 basis points during the same period.

As great as our share gains have been, we still see significant runway for growth. Nationally, e.l.f. has 13% share in mass color cosmetics, At Target, our longest standing national retail customer, we have 21% share. Our aim is to bring other retail to this level of performance over time. Looking into e.l.f. SKIN. e.l.f. SKIN delivered approximately $200 million in global retail sales this year. We are applying the same innovation strategy with e.l.f. SKIN that fueled e.l.f. Cosmetics. Tarang inspiration from our community and the best products in prestige and bringing to market at an extraordinary value with our signature e.l.f. Twist. The strategy is working. Over the last 5 years, e.l.f.

SKIN has risen from the #25 mask care brand in the US to the #11 brand. We believe there is plenty of opportunity for further share gains. As e.l.f. SKIN today holds about a 2% share of the mass skin category as compared to the #1 brand holding a 13% share. Turning to Naturium, the clinically effective biocompatible skincare brand we acquired almost 3 years ago. Naturium delivered nearly $250 million in global retail sales this year. Double its pre acquisition levels. In Q4, Naturium was the fastest growing among the top 50 skincare brands, and we see plenty of white space ahead. Moving to Rhode.

The high growth beauty brand founded by Hailey Bieber, which we acquired last August, continues to exceed our expectations. On an annualized basis in fiscal 26, Rhode delivered over $500 million in global retail sales, and approximately $390 million in net sales. Growing net sales over 80% year over year. In fiscal 26, Rhode achieved the #1 beauty brand ranking in Sephora North America and executed record breaking launches with Sephora in the UK and Mecca in Australia and New Zealand. With Rhode in less than 20% of Sephora's global stores, we see tremendous opportunity in the coming years. Our acquisitions of Rhode and have meaningfully diversified our business across brands, categories, and supply chain.

Over the past 3 years, we have seen non-e.l.f. brand sales increase from 0% to 30% of our global consumption. Skin care increased from 9% to 23% of our global consumption. And manufacturing outside of China increased from 1% to over 45% of our production. As we look to our results in fiscal 27 to date, we are continuing to see strength in Rhode and Naturium, with slower than expected growth on the e.l.f. brand. e.l.f. brand's global consumption has moderated from high single digits in fiscal 26 to low single digits in the last 12 weeks.

Our Spring 26 innovation is off to a slower start than we expected, and as a result, we are not seeing the lift across our core items that Spring Innovation has historically delivered. We are not satisfied with these results. We are taking action to further strengthen e.l.f. brand growth across 4 key areas: value, innovation, international, and leadership. First, value. Since our founding over 20 years ago, we have democratized access to the best of beauty, by delivering exceptional value to our consumers, In August 2025, we took a $1 price increase across all e.l.f. brand SKUs, in response to several factors, including tariffs and inflation.

As we look at the state of the consumer today, we have recently seen a more pronounced decline in units. As a result, we are keenly focused on how to deliver better value and improve unit velocity. To that end, we recently reduced the price of e.l.f. Halo Glow Skin Tint from $18 to $14. Initial test results show a 38% lift on Amazon and a 36% lift across all retailers, including a triple digit sales lift on TikTok shop. Given these results, we are exploring other pricing opportunities to deliver value to our community. Second, innovation. Our community led innovation model is 1 of our key competitive advantages.

We listen to our community, quickly translate their request into premium quality products at extraordinary prices. We have fast tracked innovation that was not part of our original fiscal 2027 plans and aim to have these in market before the holidays. Third, international. In fiscal 26, international net sales grew 38% behind the strength of our expanding brand portfolio. In fiscal 2026, we launched in 8 international retail customers, across 14 countries. For the year ahead, we are focused on growing share for the e.l.f. brand in our largest markets, the UK, Canada, and Germany, by activating our marketing efforts. We have already started to see green shoots in the UK and Germany as we exited Q4.

In addition, we will continue to selectively seed the e.l.f. brand in new markets. Fourth, leadership. We recently announced key leadership changes to sharpen focus on the e.l.f. Brands. And accelerate our next phases of growth. Kory Marchisotto has been appointed to President of e.l.f. Brands. A newly created role that will leverage Kory's ability to lead teams, scale brands, and drive cultural relevance. Corey will focus on expanding the e.l.f. brand across categories and geographies. We are excited to welcome Oshiya Savur as Chief Marketing Officer, e.l.f. Brands. Oshiya brings a combination of global perspective, omnichannel expertise, and a proven ability to build brands and drive growth across both mass and prestige.

Ekta Chopra was appointed into a newly created role of Chief technology and AI officer. Ekta has been instrumental in the digital transformation we have seen over the last 10 years. Including most recently spearheading our successful ERP upgrade to SAP. Her new role reflects how we see the future. Technology and AI as core drivers of transformation and growth across every part of the business. Finally, we recently made the decision to transfer the Keys Soulcare brand to Alicia Keys. Alicia has a genuine passion and a clear vision for this brand. This decision also allows our team to better focus on our 5 brands, all of which grew in fiscal 26.

We remain bullish on our overall portfolio and the white space opportunity we see across our brands, categories and geographies. Starting with brands. We are leaning into our disruptive marketing engine to fuel brand awareness across our portfolio and deepen the connection we have with our community. Our marketing initiatives have expanded e.l.f. unaided awareness from 13% in 2020 to 45% in 2025. And have supported the strength of our market share gains year after year. e.l.f. today is the most purchased brand among Gen Z, Gen Alpha, and millennials, and we continue to pick up additional households. We believe we have significant opportunity to build awareness and household penetration with road and naturium.

We have a unique ability to engage our community combining experiential moments and product innovation to drive cultural impact. e.l.f. Cosmetics and Rhode took over the 2026 Coachella Festival, Coachella is 1 of the most influential cultural events for Gen Z and Millennials, serving as the launch pad for trends across beauty, fashion and social media. And creating a content pipeline far beyond the real time event. e.l.f. was the first beauty brand to activate across all 3 weekends of Coachella and Stagecoach, a companion country music festival creating an immersive brand experience. Rhode drove momentum at Coachella, connecting headline talent Justin Bieber, with the limited edition Rhode with the Biebers collaboration drop.

Amplifying impact with its unique Rhode World activation. e.l.f. Beauty was a clear leader on social conversation at Coachella. Looking at categories, The skin care category remains a core area of focus behind Rhode, Naturium and e.l.f. SKIN, 3 of the fastest growing skincare brands. RHOAD's recent product launches in skincare the Caffeine Reset Mask and Peptide Lip Boost, underscore the team's ability to consistently translate focused product innovation into outsized consumer demand. Both launches followed Rhode's proven playbook: tightly edited product drops, strong ingredient led positioning, and a highly coordinated digital rollout. The combination translated into Rhode's biggest skincare launch day ever on its DTC site.

We are seeing strong early reads as these new products roll out into retail with Sephora and Mecca. We are tuning into the community signals at e.l.f. is elastic beyond the cosmetics and skincare categories. Following our first fragrance partnership with H and M in January, we took e.l.f. Power Grip to the hair care category for the first time in March, launching a limited edition Power Grip styling collection. The collection sold out in 48 hours, generating 95% positive consumer sentiment. And the bundle attracting 65% new-to-e.l.f. Consumers.

Video: Girl, I will be honest. Have not you ever wanted to put your power grip primer in your hair because it holds that good? Well, e.l.f. Literally said, say less. They now have Power Grip but for your hair. The price is actually crazy. there is the Power Grip hair bundle with the stick-it-and-slick-it gel pomade and brush. Y'all when I say this stuff grips, smooths, and every flyaway, but it is not crunchy, not flaky, or stiff, like, you see that. Wait until you meet the power grip styling wand. Like, do you see how it just slides my hair flat down onto my head? Her primer was a hair gel. Literally, it is the perfect set.

Let's go ahead and dig right in. cannot even separate my fingers. that is how sticky this is. She is thick, and so sticky. I am just gonna run the gel through my hair. This is usually what I do when I put it in an updo.

Tarang Amin: You guys, And finally, geographies. Looking across our brand portfolio, we are in the early days of international expansion. For context, international drives approximately 20% of our net sales as compared to legacy peers having over 70% of their sales outside the US. there is significant pent up global appetite for our brands. 50% of e.l.f. brand social followers are outside the US, and 74% of Rhode's followers are outside the US. As we look to new markets, Rhode's launched in Australia and New Zealand with Mecca was another record breaking milestone. It was Mecca's biggest launch in history. This September, we are excited to further expand Rhode's global presence, launching with Sephora in Europe across 19 countries.

In summary, fiscal 26 marked our 7th consecutive year of consistent category leading growth, a track record that reflects the strength of our team, strategy, and portfolio of brands. We are taking targeted actions to strengthen our core e.l.f. Brand, and remain confident in the growth potential of our portfolio. I will now turn the call over to Mandy to talk more about our fourth quarter results and our initial outlook for fiscal 27.

Mandy J. Fields: Thank you, Tarang. Q4 net sales grew 35% year over year. The acquisition of Rhode contributed $113 million or approximately 34 percentage points to our Q4 net sales growth. This better than expected performance was supported by strong retail demand and a record breaking launch with Mecca in Australia and New Zealand. Looking to organic sales excluding Rhode, our Q4 net sales were up approximately 1% year over year. Within the range we provided in February. Looking to our geographic regions, US net sales grew 26% in Q4, while international net sales grew 75%. Pricing and product mix added approximately 40 points to net sales growth in Q4, while unit volumes were down approximately 5 points.

Q4 gross margin of 73% was up approximately 140 basis points compared to the prior year. The year over year increase was largely driven by benefits from pricing, partially offset by higher tariffs. On an adjusted basis, SG&A as a percentage of net sales was 67% in Q4, as compared to 52% in Q4 last year. The primary driver was higher marketing and digital spend, along with continued investments in team and infrastructure. Marketing and digital investment for the quarter was 31% of net sales. In line with our expectations as compared to 23% in Q4 last year. We ended the full year with marketing and digital investment at 24% of net sales.

In line with the 24% to 26% range we outlooked. Q4 adjusted EBITDA was $59 million as compared to $81 million in Q4 last year. Adjusted net income was $19 million or $0.32 per diluted share compared to $45 million or $0.78 per diluted share a year ago. The decrease across profitability metrics was primarily driven by higher investment in marketing and digital spend, team, and infrastructure. Now let's turn to our full year results. In fiscal 26, we grew net sales 25% and adjusted EBITDA by 13%. We also delivered 20% adjusted EBITDA margins. A result that speaks to the underlying strength of our business despite the meaningful tariff pressure we faced this past year.

In fiscal 26, we have navigated an average tariff rate of approximately 55% more than double the 25% rate we faced just a year ago. Moving to the balance sheet and cash flow. Our balance sheet remains strong and we believe positions us well to execute long term growth plans. We ended the year with $290 million cash on hand compared to a cash balance of $149 million a year ago. During the year, we repurchased approximately $50 million of our outstanding common stock given the disconnect we see between e.l.f. Beauty's market valuation and the strength of our business fundamentals. At fiscal year end, approximately $400 million remained available for repurchase under our previously authorized $500 million repurchase program.

Our liquidity position remains strong with less than 2x net debt to adjusted EBITDA. We expect our cash priorities for the year ahead to support the growth of our brands, technology investment, including AI and automation, as well as investment in infrastructure to ensure our brands show up their very best in our retailers across the globe. Now let's turn to our initial outlook for fiscal 27. For the full year, we expect net sales growth of approximately 12% to 14%, adjusted EBITDA between $379 million to $385 million adjusted net income between $198 million to $201 million and adjusted EPS of $3.27 to $3.32 per diluted share.

We expect our fiscal 27 adjusted tax rate to be approximately 25% to 26% and a fully diluted average share count of approximately 60.5 million shares. Let me provide you with additional color on our planning assumptions for fiscal 27. Starting with the top line. For the full year, we expect net sales growth of 12% to 14% year over year. We expect the annualization of the Rhode acquisition to contribute approximately 9 percentage points to full year net sales growth. With Rhode adding approximately $140 million in net sales, in the first 4 months of our fiscal year. We expect organic net sales in fiscal 26 to be up approximately 4% to 5% year over year.

This includes road contributing to organic net sales growth starting in August. Looking to the first half, we also expect organic net sales within our 4% to 5% range, with variation on a quarterly basis. In Q1, we expect organic net sales down high single digits as we lap a busy shipping period at the end of Q1 last year as we prepared for our ERP cutover in Q2. We expect organic net sales growth to rebound strongly in Q2, in the mid teens range as we annualize the acquisition of Rhode and lap our decision to temporarily stop shipments in Q2 last year on orders that did not reflect our price increase. Now turning to gross margin.

In fiscal 27, we expect our gross margin to be approximately flat year over year. We expect gross margin benefits from lower tariff costs and price increases, particularly in the first half of our fiscal year, to be offset by mix as road continues to transition further into retail. From a tariff standpoint, our outlook assumes tariff rates remain at the 35% level we are facing today. As we consider the conflict in The Middle East, we are starting to see some inflationary pressure on commodities and transportation costs. like many other companies have spoken about.

Assuming that oil prices remain around $100 per barrel, on average, we estimate we could face $15 to $20 million of incremental cost headwinds in fiscal 27. In addition to cost savings initiatives as a potential offset to these headwinds, we are also pursuing a refund on the IEPA tariffs we paid last year. Which stand at approximately $58.5 million Our outlook does not factor in the impact of oil prices or tariff refunds given the situation remains fluid. From an expense standpoint, we expect to deliver leverage in adjusted SG and A in fiscal 27. We expect marketing and digital spend at approximately 23% to 25% of net sales.

And plan to thoughtfully invest in our team and infrastructure with a non-marketing SG&A to go after the white space opportunity. Ahead of us. From a profitability perspective, our full year fiscal 27 outlook implies adjusted EBITDA growth of approximately 13% to 15% versus prior year. And adjusted EBITDA margins of approximately 21% up about 20 basis points year over year. From a cadence perspective, we expect high teens adjusted EBITDA margins in the first half with gross margin improvement offset by the timing of SG and A spend. In summary, Q4 marked our 20-ninth consecutive quarter of net sales growth. Capping a year of strong execution across our brand portfolio.

The fundamentals that have driven our results over the last 7 years remain intact. Our value proposition, powerhouse innovation, and disruptive marketing engine. We believe these are durable competitive advantages that position us well unlock the white space we see on the road ahead. With that, operator, you may open the call to questions.

Operator: Thank you. We will now begin the question and answer session. If at any time your question has been addressed and you would like to withdraw your question, The first question comes from Sydney Wagner with Jefferies. Please go ahead.

Analyst (Sydney Wagner): Hi, thanks for taking our question. Just wondering if you can talk a little bit more about maybe what missed on the spring innovation and kind of the steps that you are taking to make sure that the fall innovation pipeline performs better. Also curious maybe what you are seeing on the Prestige side in terms of newness that excites you the most. And then maybe just comment a little bit more on the adjacent category opportunity. Thank you.

Tarang Amin: Hi, Sydney. This is Tarang. So I would say first of all on innovation. Innovation is still strong relative to the category. In fact, in spring, we already have 2 of the top 10 innovation launches so far this year. Our Lip Oil Sticks are off to a great start priced at $10 relative to the only other item like it is an item at $48. Continue to also see continued strength in our melting lip balms at $9 versus prestige at $24. So this is really relative to our own expectations in terms of the offtake that we are expecting and what that does to our overall core.

We talked on the call about 2 specific actions that we are doing regarding innovation. First of all, we have our fall innovation going out the door in the next month. And so that fall innovation we are feeling particularly good about. And in addition, we are known for our ability to take signals from our community. Put our ElfQuest on them, quickly bring them to market. So we are gonna be bringing additional innovation that we had previously not planned for FY 2027 into this fiscal year. So overall, I would say we are feeling good about innovation going forward with the plans that we have both in fall innovation as well as incremental innovation we are bringing.

Second, on the prestige side, I would say our model is not dependent on any given season of prestige. We have seen some softness in the spring season. From an innovation standpoint. But if you take a look at some of our biggest launches ever, they took inspiration for prestige items that have been around for at least a decade. If I go back to our lip oils, our lip oils were fashioned after a prestige item that had been in the market for about a decade that gone viral in the last couple years.

If you look at our concealer franchise, our Camo Concealer franchise, that ended up taking inspiration from items that is been around or a franchise that is been around for over 15 years. So we have a broad array of inspiration from a prestige standpoint that excites us. In fact, some of the incremental innovation we are bringing into this year that have very clear frames of reference with prestige items that are doing quite well in addition to going with our--with our consumer. And then finally, on adjacencies, as we talked, we did a collaboration with H and M in January in the fragrance category that was very well received.

What we just did with Power Grip in March, taking into hair care also had good signals. What I tell you is our brands are across our portfolio are highly elastic. We get consumer demands across multiple categories, but we are gonna use the same disciplined rollout strategy across our brands. We have such a big opportunity in terms of color cosmetics as well as skincare. We now have 3 of the fastest growing skincare brands and that will be our first focus while we selectively look at additional categories going forward.

Operator: The next question comes from Olivia Tong with Raymond James. Please go ahead.

Analyst (Olivia Tong): Great, thanks. I was wondering if you could provide some perspective on the fiscal 27 outlook, particularly on Rhode. It looks like you embedded road growth a little bit below where it was this year despite having only rolled out to about 20% of Sephora doors. So could you give a little bit more color behind that, what you are seeing so far with the brand, particularly, I mean, Q1's more than half in more than half in the books at this point.

What you are seeing in terms of new markets, And then similarly on the core e.l.f. brands, can we talk a little bit about the you know, when you know, what you are hearing with respect to the pull forward of innovation and the retailer response to that. And then just following up on the tariffs, I think you said that you are not assuming any tariff refund, but the rates have obviously changed. So to the extent that changes has gone through, what are you what are you factoring in on the gross margin line? Thank you.

Mandy J. Fields: Right. Olivia. Thanks for the question. I am going to go ahead and take the first 1. On the FY 2027 outlook and what we have assumed for Rhode, so we talked on the call, we are very excited about what we are seeing on Rhode. You know, we talked about seeing 500 million in global retail sales on the brand and are very excited for what to expect in fiscal 27. So what we have baked in is about 9 points from now through August, really, until it turns into organic sales. And then it becomes a part of our organic sales growth as we move forward.

You know, if you heard that we are launching into the EU with Rhode across 19 countries, very excited about that. Also wanna take that a quarter at a time as we go through. And so excited for what we have built in on Rhode, but I believe there could be more to come on that brand just given the momentum behind it.

Tarang Amin: And then on your second question regarding innovation, we are hearing real excitement from our retail partners on our innovation, both the fall innovation we have planned as well as the incremental innovation. Again, all of them have been anchored on what consumers are asking us for and the relevant frame of reference from a prestige standpoint. So there is a lot of excitement as we are taking a look at our innovation coming up. Both in the fall as well as incremental we will have before the holidays. And then in your last question, while tariff refunds are not part of our outlook, we absolutely expect refunds from tariffs.

I think it was about $58.5 million that we are expecting. And our plan on those 1 time tariff refunds is really to go back and invest in value and accelerated unit growth. Those are the 2 areas we are particularly focused on, and feel really good between the innovation we have coming as well as plans we have on both value. And what we can do against units, to be able to continue to accelerate the business.

Mandy J. Fields: And maybe just to add, Olivia, if you ask on the gross margin impact of tariffs, this year. So last year, on average, we were paying about a 55% tariff. What we have assumed in our outlook is a 35% tariff. For this year. that is the rate that we are currently at, and we will just continue to watch that as we go throughout the year.

Operator: The next question comes from Dara Mohsenian with Morgan Stanley. Please go ahead.

Analyst (Dara Mohsenian): Hey, guys. So it sounds like it is still early days here on the potential price adjustments in the portfolio. But can you just give us a sense for what range of the business, what percent of mix you might be considering price adjustments are and how deep the ranges of price adjustments might be in those areas? And then second, if we could just focus on the base e.l.f. brand value shares come under some pressure in the U.S. Do you think that is just the innovation that you mentioned? Or are there other factors there such as more crowded marketplace, etcetera? And just obviously, you mentioned a number of focus points going forward in driving improvement.

What do you think is most important in revitalizing dollar share for the e.l.f. brand? Thanks.

Tarang Amin: Hi, Dara. We talked on the call. We have already started looking at various price adjustments. The experiment we did with our Halo Glow Skin Tint taking it from it from $18 to $14, we saw almost a 40% unit lift. We are looking at other families. Have not disclosed which families we are looking at, but over the next few weeks, you will see us do some pricing actions on various families to drive greater unit growth on those families. As we take a look. But our overall pricing strategy remains consistent and every day great value.

We take quite seriously our ability to deliver superior consumer value to consumers, and so you will see us take that targeted approach across our portfolio. And then in terms of the late most recent kind of value share pressure you are seeing, I think you are seeing really a couple different factors. 1, spring innovation was below our expectations, so we did not see the same level of halo that we typically see on our core business. In addition, if you recall last year, we moved up 1 of our big launches, our melting lip balms. Into this period. So you are basically lapping a period that had very strong innovation. Without the commence renovation.

That fall innovation for us will go out in about another month. So it will be another month or so before you start seeing us actually comp innovation. With innovation along those fronts. And then what we are most excited about, I would say what we are most excited about is the consistent of what is driven our business over time. Number 1 is value. Already talked about the actions we are doing on the value equation. Number 2 is innovation. I have talked about the actions we are doing from an innovation standpoint. To bring in even more innovation. And the third is our disruptive marketing engine, which we see work hand in hand with both value and innovation.

And so you will continue to expect those 3 drivers to continue to propel our business, not only on e.l.f., but across the portfolio. I think 1 of the things that is been missing recently has been the strength of the portfolio overall. Every 1 of our brands grew in fiscal 26. Naturium and Rhode in particular have very strong growth and we continue to fuel them. A big part of Notorium's growth is we put, for the first time, awareness building on Naturium. We saw a major acceleration in that business.

As I mentioned in the prepared remarks, Naturium is the fastest growing brand amongst the top 50 skincare brands, and Rhode is just phenomenal with so much more potential, particularly with our expansion coming up with Sephora in Europe.

Operator: The next question comes from Andrea Teixeira with JPMorgan. Please go ahead.

Analyst (Andrea Teixeira): Thank you. I appreciate the color on the $140 million in sales that you expect for Rhode's contribution in the 4 months. So and then the high single digit organic sales decline for the first quarter. So just to think about the cadence of the rest of the year, so assuming at the midpoint, you are adding about $214 million in sales, So out of that, a 140 is Rhode itself for the first 4 months. So embedded in that guidance, how you are thinking about organic as we go through the year. Organic meaning, organic e.l.f. right? Organic, obviously, you gave guidance of organic 4% to 5% positive.

So if you take out the first quarter, how we should be thinking of the sales you know, the pricing repositioning, and how we should be thinking about the cadence of after the first quarter, the second quarter, the ERP impacts through the year?

Mandy J. Fields: Thank you. Hi, Andrea. I will take that question. So on an organic basis, we talked about 4% to 5% for the year. Q1, we called down high single digits because of the SAP kind of pull forward that we had and the base that we are cycling through. For Q2, we talked about seeing organic sales growth in the mid teens. As a reminder, we are gonna be cycling when we had certain customers we were not shipping to, And so we will have that we are cycling through in Q2. Plus we have the addition of Rhode being added to our organic growth in Q2 as well.

So that is as we think about the first half, really still see the first half around that 4% to 5% same as we see for the year. And in terms of the pricing repositioning that you spoke to, the initiatives that Tarang mentioned on value, the innovation, those actually are not yet baked into our outlook. We wanna see how things progress before we add those into our numbers.

Operator: The next question comes from Anna Lizzul with Bank of America. Please go ahead.

Analyst (Anna Lizzul): Hi, good afternoon. Thank you so much for the question. I wanted to go back to the pricing discussion and was wondering if you could call out any channels that were particularly better or worse than others in fiscal Q1 so far? I know you mentioned the pricing improvement on Amazon providing a lift in sales, which outperformed some of the other retailers. But overall, it sounds like this was pretty focused on the color cosmetic side. Just wondering if you could also comment on the innovation that you have seen from Naturium and on skincare and how that is performing versus color cosmetics? Thank you.

Tarang Amin: Hi, Anna. So I would say on the overall pricing discussion, we have not seen big changes on our main retail customers. Channel by channel. We have been seeing, and we have seen this for a while now, outsized growth in our digital channels. So if you take a look at the strength that we have had at Amazon, that is been ongoing for quite some time. We are also 1 of the leaders in connected commerce. You take a look at the strength we have in TikTok shop, in fact, the pricing action I talked about on our Halo Glow Skin Tint, we actually started on TikTok shop. And got incredible consumer response.

And part of the reason why we are using that strategy is we are seeing a lift across all of our retailers. When we do that and bring that the strength that we have in social and be able to apply it to Connected Commerce as we are going through. Then from the balance of innovation, we have very strong innovation. Naturium has had a good cycle of innovation. it is being very well received. I talked about it seems like every launch we do on Rhode is the biggest launch we have ever done as we are going through. So we are seeing good results on innovation across Naturium and Rhode. Even with Well People as we go forward.

So we feel good about innovation for the rest of the year.

Operator: The next question comes from Steve Powers with Deutsche Bank. Please go ahead.

Analyst (Steve Powers): Okay. Thank you so much. Tarang, I guess, the first question, even though a little confused because it is I know that this is based on what Mandy just said, it is not in guidance, but given what you are contemplating in terms of pricing and innovation, how would you be thinking about what you would start to see those interventions take shape in consumption, and, I guess, is there a way to think about what you have baked into guidance in terms of the consumption assumption for the year on core e.l.f. versus what you are hoping to achieve assuming success on pricing and innovation? that is number 1.

And then number 2, Mandy, just a just a quick cleanup. On the AIPA tariffs, if those refunds do come through, would that be a p and l item or is that just a cash balance sheet item? Thanks for both.

Tarang Amin: So I will take the first 1. I would say, the way we are thinking about focused interventions on pricing and innovation, is those would be in addition to the plan. The current assumptions we have that are baked into our outlook is that we continue to see e.l.f. consumption around the rates that we have seen really in the last 12 weeks or so. So they definitely would be upside. And in terms of the timing of when you would expect to see them, we will start the pricing actions in the next few weeks here. So I would say, it takes a few weeks to see them really take hold.

So I would say in the next couple of months, you would start to see kind of the impact particularly on units with some of the pricing moves that we are gonna make. And then innovation, as I mentioned, about a month from now, our fall innovation comes out. And then the incremental innovation that we have slated, we slated to get in before the holidays. So kind of think of it in our Q2, Q3.

You should start seeing the impacts of a couple of those interventions, but they would be in addition to the base outlook that we have provided, which is similar to the approach we have taken in prior years where we start with a baseline outlook and adjust that as each quarter comes in as we see the results.

Mandy J. Fields: And then on the AEFA tariffs, it would be a p and l impact. So the way that we are approaching that is as these refunds come through, we would flow through a portion through cost of goods. For any inventory that has been sold through that carried those IEFA tariffs anything remaining in inventory would go back into inventory and flow through as we sell through those items.

Operator: The next question comes from Peter Grom with UBS. Please go ahead.

Analyst (Peter Grom): So 2 questions. 1, just maybe more housekeeping. The organic sales in the quarter of 1%, is there a way to break out what you saw in the U.S. versus international I think it is the 20 rule. For US versus international held true this quarter, we would seen international did much better. So I just wanted to quantify that. And then I guess just on the organic sales outlook, it sounds like you are anticipating relatively, you know, obviously a lot of movement quarter to quarter, but 4% to 5% first half versus second half, pretty similar.

I am curious why the second half would not be stronger just because Rhode moves into organic sales growth, and I would imagine the growth rate there is much stronger versus the base business.

Mandy J. Fields: Right. Yep. Alright, Peter. Maybe let me start with the second question on the organic outlook of 4% to 5%. Again, this is our first guidance of the year, and so we want to make sure we are taking a balanced approach. We feel great about the opportunity that Rhode presents as we go through with the big EU launch. Played it for this fall, Again, wanna see how that goes before we start to bake any additional upside in there. But like I said earlier, the momentum that we are seeing behind Rhode is quite strong, and so there could be some further opportunity there. And then on the organic of 1% in the quarter, look.

We talked on the call about the US and international both showing strong growth overall as a company. We really have not broken out the organic piece between US and international. I have just focused more on the 75% growth that we saw in the quarter on international, which was quite strong.

Operator: The next question comes from Anna Andreeva with Piper Sandler. Please go ahead.

Analyst (Anna Andreeva): Great. Thank you so much for taking our question. To Teran, just, I guess, a kind of philosophical 1. On testing the lower prices and highlighting value. What gives you guys confidence that it is about the price and not perhaps relative maturity? Of the brand in some of the categories you play in or lack of that compelling innovation, which you mentioned for spring a couple of times. And can you talk about the margin impact from that? I think, Mandy, you said it is not contemplated in the guide. So are you thinking that would be off by the tariff refund? And then we had a follow-up as well. Thank you.

Tarang Amin: So hi, Anna. I would say the reason why we have confidence on the lower pricing is what we saw with the pricing action. From an external standpoint, the pricing action was successful. Obviously, we had 55% tariffs even higher than that at the time we made the pricing move. Plus inflationary pressures that caused us to take a $1 price increase. Overall, as everyone's seen, our dollars increased with that but our units fell off. So we saw a pretty big fall off on units from where we before we took pricing to after we took pricing.

And then as we started doing some of these tests, we have seen really strong unit recovery on for example, the skin tint at $18 and $14, a 40% lift almost right away and across all customers. That we tested that in gives us confidence. Again, we are test and learn brands, so we will test our way into which are the right families to be able to make that action on, but we are known for our phenomenal value, and value is always a place we go to first. And then second, pricing relative to maturity. We still see tremendous white space for the e.l.f. brand even in The US, our home market.

And we talked our national share is 13%, at Target, our share is 21%, and the only difference between Target and everyone else is they had a 5- or 6-year head start. As we look across our customer base, we recently were I think, the only beauty company that was nominated for Walmart's Excellence in Experience Award that for the work that we had done on our highest vision sets and their overall new beauty concept, which is very excited about. In that beauty concept, e. F. Anchors the entire department with increased space, more points of distribution, We love what we are seeing coming off of that.

We have rolled out the first phase of those highest vision sets, and over the coming years, we would expect to roll out more on the highest vision sets. We see a massive opportunity with Walmart Same with Ulta. We recently expanded space in Ulta takes us a couple cycles to optimize that space, but we see additional opportunity there. But really across every 1 of our customers, our objective is how do we take that 13% share we have nationally. Actually, a little bit less than 13% on balance of customers. And bring it up closer to the target range of 21%.

So even in our most mature category and our most mature we still see a tremendous amount of white space. You then add on the we have in skincare and international. We just see a lot of white space ahead of us.

Mandy J. Fields: And in terms of the margin impact, Anna, yes, we would plan to use any AEFA refund to help offset some of those investments that we want to make behind value. As we go throughout the year.

Tarang Amin: I would say value as well as really taking a look at how we are accelerating units. Our focus is on units and pricing is just 1 lever. there is obviously a significant amount of onetime tariffs coming back that we really would look to invest against the consumer and the things that work with the consumer.

Operator: The next question comes from Susan with Canaccord Genuity. Please go ahead.

Analyst (Alec Edward Legg): Hi, good afternoon. Alec Edward Legg on for Susan. Just a broader question. How should we think about the competitive landscape for the e.l.f. Beauty brand? Obviously, units started trending down after the price increase. I mean, do you think that e.l.f. consumer is moving to? Are they, you know, trading up, trading across? Maybe buying less often, all of the above? I guess, how to get those customers to come back?

Tarang Amin: Yeah. So I would say, first of all, even since the time of our price increase, we continue to pick up market share. In FY 2026, we picked up 115 points of market share in color cosmetics. So I would say we are still a net gainer overall, and that is really the 29 basis points of share we have picked up over the last 7 years. So we are still confident of our ability to continue to build market share. You are gonna see periods where the market share does not grow, other periods where it is stronger.

But overall, we still see the opportunity to build market share, and we are sourcing that market share across, really, across the category. We usually do not call out the competitors we are sourcing from, but it is a pretty broad array of where we see that We also continue to pick up additional households from a consumer standpoint. Not only are we the #1 brand amongst Gen Z, Gen alpha, and millennials, but we have also picked up more Gen Xers and more households throughout the year. So we like the core fundamental dynamics we see from a consumer standpoint, including all of our equity ratings. That gives us confidence as well.

Operator: The next question comes from Bonnie Herzog with Goldman Sachs. Please go ahead.

Analyst (Bonnie Herzog): All right. Thank you. I just had a quick follow-up question on the slower innovation this spring. Could you talk to space and whether you gained or possibly lost shelf space? And then are there any idiosyncratic factors to keep in mind with respect to sell in versus sell through trends over FY 2027 or do you expect shipments to track more in line with consumption trends? Thanks.

Tarang Amin: So I would say, Bonnie, overall, we continue to pick up space. The #1 driver of our growth over the years has been our productivity growth dollars per linear foot. But we have had a good track record of consistently picking up space. We have never lost space. Even in this latest cycle. We talked about picking up pretty significant space at Ulta Beauty. We started rolling out those Walmart highest vision sets. We have additional space. We will talk about some of the other space we have coming in subsequent calls, and then the focus we have. And it is not just on e.l.f., but across the portfolio. Naturium also picked up additional space.

At Boots, and we continue to expand to Walmart, entering Walmart with Naturium in a subset of their doors We are really pleased, and Walmart is as well in terms of what they are seeing. So it gives us even greater opportunity there, and certainly, Rhode with our big expansion coming in Europe, is going to continue to pick up. So we do not anticipate any space. We do not we do not see any signs of any space losses, if anything. We still are dramatically under space when retailers take a look at their sales relative to the space allocation. e.l.f. is still dramatically under space relative to any of our competitors. So we still see more room there.

Mandy J. Fields: And then on the sell-in, sell-through trends, Bonnie, we expect that to track much closer this year. As we have said over time, consumption and net sales will balance out. And certainly, you know, we talked about some of the dynamics between Q1 and Q2, but as we go throughout the year, you should see you should see that much closer.

Operator: The next question comes from Filippo Folorni with Citi. Please go ahead.

Analyst (Filippo Folorni): Hi, good afternoon everyone. I wanted to ask on some of the international markets that you called out in the past, especially The UK and Germany. You had some weakness there in prior quarters. Have you seen some improvement or are you expecting some improvement in fiscal 27? And then, Mandy, just a quick housekeeping. Between EBITDA and net income, is there any particular driver that gets you to a much lower growth in net income versus EBITDA, whether it is DNA net interest, or other income? Thank you.

Tarang Amin: Hi, Filippo. So, first, on international markets. We definitely have seen a pickup in both The UK and Germany. Recall last year, really, even more than the last year,, we have been facing a particularly heavy promotional environment in The UK, the state of The UK consumer. Our teams would focus action in place, including awareness building and marketing support, as well as really good retailer support across Superdrug Boots and other retailers. So UK, we have definitely seen pickup In Germany, we were just lapping the massive launch we had with Rossmann Germany. Our launch into DM has gone well, and we are seeing Better Trends In Germany overall as well.

We still have further to go in both markets, but I am encouraged by the trend that we have and where we are headed particularly with the support that we have in both those markets while we continue to selectively see additional markets.

Mandy J. Fields: And then just on a housekeeping item, things to keep in mind. The amortization of intangibles related to the Rhode acquisition and interest expense--higher interest expense as we go through. Now carrying a full year of the higher debt. Also related to the Rhode acquisition.

Operator: The next question comes from Rupesh Parikh with Oppenheimer. Please go ahead.

Analyst (Rupesh Parikh): Good afternoon. Thanks for taking my question. So have 2 questions on Road. So first, as you lap some of the launches in markets such as The U. S, just curious what type growth rates you would expect in consumption? And then second, just as you look at Rhode in the intermediate term, curious in the types of growth rates you would expect for the brand. Thank you.

Tarang Amin: So Rupesh, we have talked about Rhode growing at about 80% year over year. In this past fiscal year. We continue to expect very strong growth rates on road. We have not disclosed the specific amount What I can tell you is when I take a look at The US versus international markets, the US, as we said in our prepared remarks, Rhode is the number 1 brand that Sephora carries. And we have continued to see very strong momentum in Sephora in North America. And if you go into many of the Sephora doors, we are doing that with 1 bay. Relative to competitors with as many as 2 or 3 different bays.

So it is a very similar story to e.l.f., dramatically under space, relative to the productivity. The biggest issue we have had on Rhode is keeping up with the consumer demand. We have enough capacity to making sure those stores stay replenished is probably the #1 complaint we get. So we still have a ton of opportunity even within The US both in terms of our footprint as well as from a replenishment standpoint. Continue to fuel that. And then particularly excited about the launch we have coming up with Europe, 19 countries. Sephora is going all in on road based on the success that they have seen of the brand.

We have very high expectations of that, so you will continue to see momentum. So I we feel good about lapping both the North American launch The UK launch in Mecca, and then having additional markets on road in addition. And, it goes back to the momentum that we are seeing on that brand. Every single launch we have done has been bigger than the prior 1. And you continue to see the level of consumer demand that is unlike any other brand. I have seen, at least, and Sephora has ever seen.

Operator: The next question comes from Oliver Chen with TD Cowen. Please go ahead.

Analyst (Oliver Chen): Hi, thank you very much. As we think about marketing spend as a percentage of sales and it moderating, what is happening there in terms of decisions you are making to optimize, you know, incremental return on ad spend? Yet pull back, yet you know, you are undergoing some innovation changes. And then second question is thinking about Naturium and your skin care excellence there. Are there synergies that you can leverage across the platform with that continue to push forward with Corelf skincare. Thank you.

Mandy J. Fields: Hey, Oliver. So on marketing spend, we have outlooked at 23% to 25% range. And last year, we spent around that 24% range. And so you know, it still gives us room to go up to 25% if we wanted to be you know, lean into that. You know, Tarang talked about maybe leaning into some more consumer facing things and with the tariff rebate that may be coming through here this year. And so that we feel that 23% to 25% gives us the adequate room that we need from a marketing perspective. And so certainly an opportunity to optimize, but also room for us to lean in. If we if we saw the need there.

Tarang Amin: And, you know, I would add to that. The team is constantly When I take a look at the mix within our marketing. A few years ago, getting into awareness building advertising was a big unlock for us. We continue to see unlock as we go across each of our vehicles, and the team's constantly taking a look at that. We feel really good about it. Our marketing works best when it is paired with really great innovation, too. So I think a little bit what you are seeing is us looking at marketing as we have some of these launches coming up.

Making sure we are putting enough support behind the key launches while protecting the core as we go through. But the ROIs continue to remain exceptionally high multiples above the category. So we feel great about our marketing investments. And we feel great about what they have done for our businesses long term. And then in terms of Naturium, I would say, look. Each of our brands from a consumer facing standpoint are separate. They are unique. Complementary, distinct brands, but we certainly think it is been really helpful having Naturium as part of the portfolio. there is a ton we have learned from Naturium on the skincare side that is benefited e.l.f. SKIN and vice versa.

Same is true with Rhode as we have taken a look across each of these brands, 3 of the fastest growing skincare brands. There are definitely opportunities to cross share learnings, but each brand has its own unique focus and opportunity ahead.

Operator: The next question comes from Javier Escalante with Evercore ISI. Please go ahead.

Analyst (Javier Escalante): Hi, good afternoon everyone and thank you for taking my question. I would like to double click on Rhode again, perhaps from a different perspective. And perhaps Mandy could help us with this. So, basically, road in fiscal 26 So because there is a pro form a versus under, reported Rhode, So, basically, what is the number that we shall use for fiscal 26 would imagine, would be pro forma. So that $390 million is a pro forma or is it a reported?. So if you can help us with that, and also trying to understand the evolution of road business model. So there is a D2C, direct-to-consumer, to consumer.

Aspect to it, and then there is the wholesale aspect to it that goes to Sephora US. Etcetera. So if you can help us at least know what percentage of whatever number you are gonna give me for fiscal 26, is wholesale versus d 2 c. Thank you.

Mandy J. Fields: Yes. So I will start with the fiscal 26. So the $390 million is a pro forma number. The incremental post acquisition was around $290 million that Rhode delivered in fiscal 26. Yep.

Tarang Amin: And then we have not broken out DTC versus wholesale. But I would tell you the DTC, we always modeled as part of our acquisition economics what type of falloff would we see in D2C given how much retail we are going into with Sephora and with Mecca, and that is held up except well. We continue to see real strength in our DTC business, primarily because part of the strategy is we do have unique items that show up first on our DTC site. That get, particularly some of our new innovation that get, disproportionate amount of attention and interest. So DTC has actually performed quite well.

Over time, we would expect, we have not said where the percentage is right now, but over time, footprint that we are building in Sephora and Mecca, we would expect the retail side of the business to be bigger, but both would be pretty significant.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Tarang Amin for any closing remarks. Please go ahead.

Tarang Amin: Okay. Well, thanks for joining us today. I am so proud of our incredible team at e.l.f. Beauty for delivering another core year of industry leading growth. We look forward to seeing some of you at our upcoming investor conferences over the next few weeks and speaking with you in August when we will discuss our first quarter fiscal 27 results. Thank you, and be well.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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