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spk05: Greetings and welcome to the Interparfums, Inc. 20 and 23 fourth quarter and full year earnings conference call and webcast. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. At this time, I'd like to turn the call over to Karen Daly, Vice President at the Equity Group and Interparfums Investor Relations Representative. Thank you. Please go ahead.
spk03: Thank you, Diego. Joining us on the call today will be Chairman and Chief Executive Officer, Jean Madar, and Chief Financial Officer, Michelle Atwood. On behalf of the company, I would like to note that 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 results. These factors may be found in the company's filings with the Securities and Exchange Commission under the headings Forward Looking Statements and Risk Factors in their most recent annual report on Form 10-K. Forward Looking Statements speak only as of the date on which they are made, and Interparfums undertakes no obligation to update the information discussed. As a reminder, the company's consolidated results reflect its two business segments, European-based operations and United States-based operations. Certain Prestige Fragrance products are produced and marketed by their European-based operations through its 72% owned French subsidiary, Interparfums S.A. When the company refers to their U.S.-based operations, they are talking about their wholly owned subsidiaries. It is now my pleasure to turn the call over to Mr. Jean Mazar. Jean, you may begin.
spk00: Thank you, Karine. Good morning, everyone, and thank you for participating in today's call. We are seeing ongoing momentum in the fragrance market, particularly within the prestige and premium category in which we play. Much of the growth we have seen can be attributed to premiumization as consumers are increasingly seeking high quality, and higher concentration fragrances in today's market. The ongoing demand in our prestige portfolio of brands led to a record net sales of $1.3 billion in 2023, an increase of 21% compared to 2022. At comparable foreign currency exchange rates, Net sales increased 20% in 2023, of which 5% was related to new brands. Similar to 2022, our successful growth during the year was attributable to our established brands and our new product pipeline dominated by extensions. Sales for each of our largest brands, Jimmy Choo, Montblanc, and coach rose above $200 million for the year, representing 49% of our total sales. Our fourth largest brand, Guess, grew sales by a robust 23%. And with a strategically planned pipeline of innovation, we believe Guess is well on its way to also surpassing 200 million sales in the coming years. In our European brands, there were also significant gains made by our mid-sized brands in 2023, including Rochas, Karl Lagerfeld, Van Cleef & Arpels, increasing respectively 11%, 24%, and 12%. As you may recall, Donna Karan-DKNY joined us in July 2022. This explains the significant 200% growth in 2023. We anticipate that the substantial growth rate will normalize but will remain healthy and the brand will well exceed 100 million in sales in 2024 as it continues to benefit from our expertise. Relative to our newest brand, we began shipping Lacoste fragrance in January of this year after rebooting the brand's existing fragrance portfolio and creating all new, freshly developed goods for our retail partners and consumers alike. Our Cavalli fragrance reboot coincides with the fashion house renaissance efforts to invent the powerful creativity of their apparel, while opening new stores and increasing visibility. We have blockbuster launches in the works for both brands later this year. As you may recall, our entry into Italian operations in 2021 was strategically timed coinciding with the signing of the Ferragamo license. This decision, I think, was well-founded as the Italian fragrance market witnessed a plus 12% sales growth in 2023. In fact, Ferragamo fragrance sales had performed the market, achieving 21% sales growth in the last year. Cosmetica Italia noted that they expect to see similar sales expansion in 2024. While we have seen new entrants into the Italian market across the industry recently, driving healthy competition, we are confident our Italian affiliate will take advantage of the booming demand in Italy and across its borders. We have also leveraged this new affiliate to serve as an anchor point to attract other Italian brands and increase company scale. After starting to distribute all the brands from the United States-based operation in January 2023, our team in Italy has also started to distribute the brands from our European-based operation since January 2021. With our Italian operations managing our distribution for both segments, we will expand cross-company synergies in that market and continue to improve gross margin as we sell directly rather than for a distributor. The team in Italy also started shipping Roberto Cavalli's fragrance at the beginning of February 2024, and we look forward to fully capturing the potential of this brand. Abercrombie & Fitch also achieved significant sales growth of 25% in 2023, in part due to the sustained popularity of their legacy scents, Our initial success in the Phase 1 distribution rollout of FIRST was a leading contributor to the brand's growth in the back half of the year, and we expect to see further sales expansion as we commence Phase 2 in the first quarter of this year. On another note, I've spent a lot of time traveling to meet with retailers, buyers, and wholesalers across the globe. 2024 is off to a great start. In fact, I recently visited Mexico to meet with buyers, and I was very encouraged by what I saw, including empty shelves representing healthy sell-outs, particularly for Ferragamo, Montblanc, Guess, and DKNY. With the holiday season behind us and strong reorders, We are enthusiastic of the growth prospects in that region. Turning to our stimulating pipeline of innovation, during the first quarter of 2024, we debuted new fragrance collection. For Montclair, we introduced five new ultra-luxurious unisex fragrances called Les Sommets Montclair. And we developed also a premium collection quartet of eau de parfum for Donna Karan called Kashmir Collection. These layered and more concentrated fragrances were unveiled in conjunction with the relaunch of Donna Karan fashion business and the reveal of the Spring 2024 campaign. These premium fragrances debuted in more than 200 department stores across the United States. We have an invigorating lineup of products set for the balance of 2024. In addition to the new blockbuster fragrance for Cavalli & Lacoste I mentioned earlier, there is a new guest fragrance planned for the second quarter, as well as a Romo flanker in the first quarter. Extensions of Jimmy Choo Iron Shoe, Montblanc Legend, Koch Dreams, and Roberto Cavalli Signature are set to debut throughout the year. Furthermore, brand extensions are also in the works for Ferragamo, MCM, Abercrombie, Hollister, and Oscar de la Renta. With ongoing innovation in the development and marketing of our portfolio of fragrances, coupled with the overall strength in the fragrance market, we are poised for a dynamic year ahead. we have successfully onboarded over 18 new team members just for our United States-based operations, exemplifying our unwavering commitment to developing robust operations capable of effectively managing and optimizing our diverse portfolio of prestige brands. In the ever-changing world of beauty, fragrance innovation is at the forefront for our brand's ethos. With category penetration on the rise in the United States and in Asia, and the continued shift towards more premium fragrances, we believe that the consumer's heightened appreciation and curiosity for fragrances will be a compelling force for the future. I will now turn the call over to Michel for a more detailed financial review. Michel?
spk06: Michel?
spk05: Mr. Howard, you may be muted. Go ahead.
spk06: I'm sorry. Thank you, Jean, and good morning, everyone. As we reported yesterday, consolidated net sales grew 6% in the final quarter. reflecting 13% and 2% growth in our U.S.-based and European-based operations, respectively. For the full year, we are pleased to have achieved record sales and earning results. As previously disclosed, the quarterly growth rate in comparison to the full year reflects the elevated sales baseline from the preceding year. Compared to 2019, which was a much stabler year, Our sales were up 85% both for the fourth quarter and the full year 2020-2023. On a consolidated basis, gross margin expanded 30 basis points from the fourth quarter of 2022 to 64.7%, leading to a full year gross margin of 63.7%, broadly in line with the prior year. with higher selling prices and channel product mix offsetting the inflation headwinds and segment mix. In 2023, European operations gross margin eroded by 100 basis points from 68.2 to 67.2%. However, as previously disclosed, the bulk of the erosion was attributed to the inventory write-off in the second quarter. Excluding this impact, gross margins would only have eroded by 20 basis points with pricing and regional mix almost entirely upsetting higher inflationary costs in Europe. U.S.-based operations gross margin, on the other hand, continued to expand significantly from 54.7% in 2022 to 57% in 2023. The U.S. margin expansion stems from several factors, including price increases we took early in 2023 that were not fully offset by higher costs of goods due in part to our ongoing cost containment efforts. We also had favorable brand and channel mix as a larger portion of our higher price fragrances are being sold directly to retailers as opposed to third-party distributors. An example of that is what Jean explained is happening in Italy. We're also seeing that in the U.S. with the U.S. market growing faster than the rest of the other regions. And then lastly, a significant increase in sales in 2023, which has allowed us to absorb fixed costs, namely manufacturing and depreciation of tooling. As expected, selling and general administration expenses as a percentage of net sales were 59% for the quarter, which is 450 basis points higher than the prior year period, mainly due to higher promotion and advertising spending. For the full year, SG&A expenses as a percentage of net sales were at 44.6% compared to 45.3% in 2022. This decrease was largely driven by continued sales growth during 2023, allowing for better absorption of fixed operating costs and favorable segment mix. As previously disclosed, we continue to invest heavily in A&P to build brand awareness, remain competitive, and sustain our growth. During the year, we dedicated 19.7% of net sales to advertising and promotion. And while we again spent below our target A&P of 21% of net sales, due in part to higher than expected sales growth, we continue to deliberately converge towards this figure. In fact, in the critically important fourth quarter of 2023, spending was 23% higher than in the prior year period, representing 33% of net sales up from 28% in the fourth quarter of 2022. As you know, our fourth quarter, we typically spend double what we spend in the other quarters. Royalty expenses are included in SG&A and average approximately 8% in 2023, generally in line with the last three years. And finally, our operating margins aggregated to 19.1% for 2023, or 120 basis points improvement from 2022. We closed the year with working capital of $514 million, including approximately $183 million in cash and cash equivalents and short-term investments, resulting in a working capital ratio of 2.6 to 1. A long-term debt at December 31st, 2023 was $128 million. Associated with the Paris headquarters and Lacoste license acquisitions were our two main investments on the last couple of years. From a cash flow perspective, accounts receivable was up 19% from year end 2022. The balance is reasonable based on 2023 record sales levels and reflects a strong collection activity as day of sales outstanding decreased slightly to 60 days in 2023 as opposed to as compared to 64 days in 2022. Additionally, inventory levels are up 25% from year end 2022 of which inventory days on hand increased to 249 days in 2023 from 231 days in 2022. This increase was fully anticipated and is primarily explained by the buildup of inventory related to the newly acquired licenses for Lacoste and Cavalli, which began shipping to customers in 2024. We expect inventories to start normalizing now that we have sales and these inventory in our base. And finally, touching on our 2023 execution and 2024 guidance, not only did we surpass our sales target of $1.3 billion in 2023 and achieve our all-in bottom line goal of $4.75 earnings per diluted share, but on an adjusted basis and excluding the one-time tax assessment undergone by our European operations, we largely beat our bottom line guidance and achieved $4.82 earnings per diluted share, representing a growth of 22%. For 2024 guidance, as we reaffirmed in yesterday's earnings release, the fragrance market, particularly in the prestige and luxury category, remains robust. This, coupled with healthy stock and trade level, gives us the confidence we can continue to grow and achieve approximately 10% annual sales growth to $1.45 billion. We expect first-half growth to be a more modest high single-digit due to the seasonality of our pipeline of innovation and the selling of the newest brands of our portfolio. However, we expect double-digit growth in the second half. This will lead to an 8% increase in earnings per diluted share to $5.15. Of note, including our guidance, the Lacoste non-cash amortization impact of the acquisition cost is expected to reduce our 2024 earnings per diluted share by approximately 11 cents. Excluding this impact, we are projecting EPS growth of 11% versus 2023. While we are confident in the strength of the market and our ability to gain share with our overall portfolio, we have always taken a conservative stance in our guidance. And this year, we are particularly keen on being cautious, especially in light of the ongoing conflicts in the Middle East and in Eastern Europe. Given the potential for volatility and the lack of visibility at this time, We will revisit the subject of guidance as the year progresses and as we attain greater clarity on the market and the successful offtake and expansion of our two new licenses. Lastly, as announced in our press release, given our strong results, future prospects, and robust financial standing, our board of directors authorized the company to continue to purchase up to 130,000 shares through 2024 They also approved a 20% increase in the annual dividend to $3 per share from $2.50 per share. The next quarterly cash dividend of $0.75 per share is payable on March 29 to shareholders of record on March 15, 2024. With that operator, please open the line for questions.
spk05: Thank you. We'll now conduct our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press the star key followed by the number two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, to ask a question, press star one. One moment while we poll for questions. Our first question comes from Linda Bolton-Weiser with DA Davidson. Please state your question.
spk04: Yes, hi. Good morning. So I was just wondering if you could comment a little more, give us some color on those two regions of the world that you mentioned, a little bit of lack of visibility, the Eastern Europe and the Middle East, and specifically on the Eastern Europe. I know you had been shipping some, excuse me, still to Russia, I think, in 2023. How much was that, you know, kind of roughly in revenue in 2023? And is that going to go down a lot in 2024? Can you just give us some more color on that? Thank you.
spk00: Yes, I can try. Good morning, Linda. Yes, we see, of course, like everybody, distance in Europe. And even though today they do not... It doesn't have a real impact on ourselves. It makes us put some conservative light regarding the guidance. When it comes to Russia, for Russia it's very simple. It does not change. We ship to Russia from the products that are made in Italy or in France. We do not ship to Russia products that are maybe USA. The business, Michel, in Russia is what, 4% of our total sales, something like that?
spk06: Yeah, it's 50 million, Linda. Yes, Linda, it's about 50 million, and that's kind of what we've, it's actually disclosed in our 10K.
spk00: Do we expect this business to grow? No, but what we see is that the news are not great from this part of the world and any sparks could not only stop the business that we have in Russia, but it's also a tension in this region, Poland, etc., which represents a nice business. That's why even though business is very strong, we have no reason to I prefer to have an approach that is more conservative. When it comes to the Middle East, we do business, as you know, we have a very strong business in Saudi Arabia, in Kuwait, and the Emirates. This represents, Michel, can you give me a percentage? Sure.
spk06: Yeah, it's about 8%. It's about 8%.
spk00: I was there. I was in the region two or three weeks ago. Everybody is fine. We continue to sell. But we think that if anything happens, immediately we'll see an impact on the region. So that's why we prefer to to wait and see. But our business, for instance, on Cavalli, Roberto Cavalli, more than 50% of the business is in the Middle East. So this is to give you some color of our conservatism.
spk06: Yeah, just to build on Jean, I think the tone of caution is not relative to our business. The tone of caution is more coming from the macroeconomic environment, which we obviously don't control. But we're certainly feeling very good about the health of our brands, the level of offtake that we've had over year-end, and our ability to replenish and to successfully launch our two brands. But again, we are being proven more because of the macro environment than by any concerns we might have with our business.
spk00: Thank you. We will wait a couple of months before, I would say, when we review the first quarter, we will review, I hope we'll be able to review the guidance. But not now.
spk04: Okay. Thanks. I know, Michelle, you were giving some color, I think, previously that you felt growth margin in 2024 could be flattish. And then are you still shooting also for the A&P ratio to be about that 21% target in the year? Thanks.
spk06: Yeah, so hi, Linda. Yeah, certainly we're working towards a flat gross margin for next year with pretty much the carryover of the pricing that we took this year, offsetting some of the inflationary costs that we might still expect. But broadly, I think the costs are contained and looking good for now. On the A&P, I think we've been very clear. We want to remain competitive. Some of the reasons why we've been below our 21% goal is because we continue to see a lot more market growth than potentially anticipated, and that obviously has an impact on our denominator as we divide the spending via lower sales. We continue to plan more. We're gating and gating our investments. so that we can land that number better, and I think I've been very clearly indicating that now for a few quarters, that we're refining our ability to forecast and plan these expenses as the sales come in. So yes, you should assume that we will continue to work in that direction. There's another element that's actually quite important to keep in mind here, and it's not always very obvious, but if you compare our European operations to our U.S. operations, while the margins are roughly the same, overall operating margins and have been converging. There's a big difference in our operating model, which is European operations has much higher gross margins, but also much higher A&P spending. And if you compare that to US operations, it's the opposite, lower margins and lower A&P spending. As the US operations becomes more and more like the European operations, you're starting to see the gross margins converging, but you can also expect to see the A&P also increasing as that business starts to look more and more like the European one. That creates some segment mix, both on the COGS, which was going to be favorable, but on the ANP, which will be unfavorable.
spk00: If I may add, in 2023, our operating margin was a high of 19%. I think it's a great label. It's a It's higher than what it was in 2022. But one of the reasons, you know, Linda, that we want to spend this money in advertising is that this advertising is spent a lot in the fourth quarter to ensure the sell-through. And when I see that our gift sets and all our programs are sold through by the end of the year, it's very reassuring for the year after. So I think it's very important to continue to spend at this level.
spk04: Yeah, thank you. And then my final question has to do with capital allocation. And, you know, that's a nice, healthy dividend increase, 20%. And you've had big increases in the last few years. You know, quite frankly, your free cash flow in 2023 was not too much above the dividend amount. So I'm wondering, like, you know, kind of are you expecting to have more robust free cash flow and a better, a bigger margin of safety? I just wonder if we should worry that your dividend is getting actually too high relative to your cash flow. Thanks.
spk06: Yeah, so, you know, if you look at really, you know, what's been going on for the last couple of years, right, is I think we've been delivering very healthy operating profit growth. The challenge is that a lot of that has been consumed in free cash flow, either through the inventory and the AR buildup, which is commensurate with our growth. Particularly, I would say inventory. So inventory has consumed a lot of cash. What we're seeing at this point in time is that we're getting to a level of inventory that we feel is quite comfortable We have now, as I laid out in my prepared remarks, we have built the inventory now for Lacoste and for Cavalli. And so we are expecting going forward that a lot less of our operating profit will be consumed through an increase in inventory. And so that will definitely provide us with some good tailwinds. And then the last piece is we have made two significant investments that have consumed cash in the last couple of years. There's been the acquisition of our of our headquarter in Paris. And there's also the Lacoste purchase, which, you know, as you all know, is not typical in this industry. But so overall, we're feeling very, very good about our prospects for next year and our ability to generate more free cash flow from our earnings.
spk04: Thank you. Thank you very much. That's it for me.
spk00: Thank you, Inda.
spk05: Our next question comes from Corinne Wolfmeyer with Piper Sandler. Please state your question.
spk02: Hey, good morning, and thanks for taking the questions. I'd like to touch on how you're thinking about the outlook for both the Lacoste and Cavalli licenses this year. It does seem like the guidance you laid out is factoring in maybe a little bit more conservatism, and it does sound like you're being more prudent with expectations, especially with what's going on in the Middle East. But can you just provide a little bit more color on how you're thinking about the trajectory for both these licenses this year and maybe how we could, how or when or in what areas could we see some upside to both these licenses this year?
spk00: So I can answer. Go ahead. Go ahead, Michel.
spk06: So, Corinne, hi. Right now we are assuming in our forecast about $90 million in combination both for Lacoste and for Cavalli for the total year. You know, so far, we've been able to get some healthy sell-in. And so, overall, that's kind of the number we're working towards. As Jean explained, you know, the Middle East remains a, you know, pretty volatile region, and half of Kavali, you know, is pretty much going to be in the Middle East. So, you know, while we currently have about $90 million in our forecast, you know, we're probably, you know, you know, in our guidance, assuming a slightly smaller number than that. So right now, if you look at our building blocks to the 10%, we're looking at about kind of four to 5%, you know, coming from the base, the base business, and then the balance coming from the new licenses. And we understand that that's a little conservative right now. We do expect the market to be more around, you know, high, you know, you know, mid single digits, call it around 6%. But again, we are, we are being proven at this point in time.
spk02: Very helpful. Thank you. And then can you just touch on kind of your longer-term expectations for ANP spend? And I know you're not guiding beyond 2024, but how should we be thinking about, like, the proper run rate for operating margin, you know, beyond this year if you are keeping that ANP spend heightened? And specifically, like, is it reasonable to think we could get to levels delivered here in 2023? over the coming years, or is it going to be sustainably a little bit lower due to the spend? Thanks.
spk06: At this point in time, we're comfortable with the level of margins we have. I don't think we're necessarily looking to further expand. I think we've had a really, really good run. We're comfortable with the level we have. I think as the business continues to grow, we'll continue to have operating efficiencies and scale gains. I think that would potentially drive a little bit of margin appreciation. But we are being very vigilant. And, again, as I was explaining before, we have a lot of, you know, there's some, you know, there's some mixed impacts, segment mixed impacts that can kind of, you know, throw some of these things off. You know, if you look at our A&P, you know, right now we're at 19.7%. But if you look at, you know, our European operations, they're at 22. You know, and the reason why we're lower than that is because U.S. operations is more in the 15 to 16 range. And it's the same thing on COG. So I think what you can probably expect to see really over the long term is, you know, U.S. operations gross margins will probably continue to, you know, improve. A&P will continue to increase. And that, you know, but overall margins will remain roughly the same.
spk02: Great. Thank you.
spk00: Excuse me, I would like to, if we have time, I would like to go back to this interesting point of Lacoste and Cavalier, which are the two new licenses that just started. We took them over January 1. I think we're going to see some good surprise on both because the former licensee didn't put a lot of inventory in the markets. and there is from the orders that we are receiving in the first quarter, we see that there is a large appetite for Lacoste existing products and also for Cavalli. From the trips that I make, we see an empty shelf and we have to replenish this shelf quickly. So there is If it continues at the level that we are seeing now, we have a lot of chance to make bigger numbers than that for Cavalli and for this year.
spk05: Thank you. And our next question comes from Ashley Helgens with Jefferies. Please, your question.
spk01: Hi, this is Sydney on Twitter. I was just wondering if you can talk a little bit about what you're seeing in terms of consumer price sensitivity and maybe just also sensitivity to promotion and then any kind of color you can give in terms of what you're expecting for the broader fragrance category promotional environment looking out through 2024.
spk00: Well, I can try to answer, but as I said before, we have seen a premiumization in the market for sure. there are more and more consumers willing to spend more for higher quality fragrance. When I say higher quality, meaning more concentrated fragrance. So instead of buying eau de toilette, they will buy eau de parfum, so it could be more expensive. We see no real price resistance when it comes to fragrance. We see also Worldwide, more people buying larger size, which is also a sign. Our fragrance comes usually in three sizes. Let's call it small, medium, and large. More than 50% of the sales are in the large size. So this, of course, helps the business. It has not always been like that. And we see this trend. Trying to continue. We see it in the brick and mortar business and, of course, in the very important e-commerce business. Michel, you have something to add?
spk06: Yeah, no, I think I would say the market has been generally very strong. So even if there were to be any price elasticity related to pricing, you know, we're certainly not seeing it. Or there's a very strong underlining trend that's kind of pushing the market up. You know, that would be offsetting that. And on the promotion side, we're not really seeing any significant increases in the promotional levels. You know, typically holiday, you get your normal gift sets. You know, there's some you know, various events throughout the holiday season to facilitate sell-through, but we haven't really seen any significant increases in promotional activity either.
spk01: Got it. That's helpful. And then just one more from us was any updates you can kind of give us on the travel retail channel and what you're seeing there.
spk00: Yes, travel retail is really back. We have all the operators, the largest operators, and there is less than... a dozen of them. Going back, they're strong with a lot of programs at a higher price. And in Europe, in the U.S., and in Asia, except China, we will see a nice increase in our travel retail.
spk01: Got it. Thank you so much.
spk05: Thank you, and our next question comes from Hamed Korsan with BWS Financial. Please state your question.
spk07: Hey, good morning, or good afternoon, John. So first thing I want to ask you is are you seeing any difference? Can you hear me?
spk00: Yeah. Yes.
spk07: Are you seeing any difference in – your relationship with the retailers and, and what's going on with you going direct and how beneficial that is for you? Are they buying more because you're having established some relationship or how is it different?
spk00: Uh, I am not sure.
spk06: Um, so let me, let me try to take that and enjoy. You can, you can, you can maybe fill in. I mean, Obviously, there's always a benefit in going direct because if you go direct, you can obviously pick up a piece of the overall value that is out there if you can do it obviously efficiently. The second benefit that you get is effectively you're closer to the business. You're closer to the pulse of the business. When you're selling to a distributor, You don't necessarily have as much visibility on what the retailers are doing. Obviously, you have ongoing conversations with your distributor. You track stock and trade. You track their stock levels. You look at offtake. But when you're one step closer to that consumer, to that retailer, it definitely helps the relationship. You also are the one talking about your brands. Obviously, we always know how to talk about our brands even if our partners are also very well trained. We definitely are one step closer as well. I think all of that just creates positive momentum and inevitably helps us.
spk00: We have a direct relationship with retailers in many countries. Of course, we can respond much more faster than when you have a distributor in the middle, for sure.
spk07: Okay. And then have you changed up any of your timeline for new releases this year? Or are you staying put?
spk06: Yeah, I think there's some, you know, if you really look at the business overall, typically what you see is from a seasonality standpoint, you know, I mean, a lot of, you know, if you look at a stable FMCG business, you know, it's pretty much everybody's buying every quarter, roughly, you know, a quarter, a quarter, a quarter. What you see on the fragrance business, it's much more skewed, you know, to the second half of the year. If you look at what we did this year, roughly 47% of our business was in the first half and 53% was in the second half. Normally, it's more like a 46-54 split. This year was a bit of an outlier because we had a very, very strong Q1 last year with a lot of innovation, particularly on Mambo and Jimmy Choo. This is one of the reasons why we're guiding to a slightly slower growth relative to last year. It's more driven by seasonality of this market and this industry, which was a little bit off last year versus what we normally see.
spk07: Okay. Thank you.
spk05: Thank you. And there are no further questions at this time. I'll turn the floor back over to Michelle Atwood for closing remarks.
spk06: Okay, well, thank you really all for joining our call today. Really, before I end the call, I wanted to take this opportunity to really thank our teams. You know, they're really the unsung heroes here. They're not on this call, but they're all behind us. For those that have been following us for a while, I think you've all seen the pace of growth and transformation over the last few years. It's been really considerable, and we could not have achieved this, not only achieved and sustained these record results without all of their hard work and dedication. So really, again, wanted to really thank you our teams today to all of you. Last thing I would like to do is just also maybe announce some upcoming events. So first, Jean and I will be joining DA Davidson's inaugural Best of the Breed Bison virtual conferences on March 8th. And separately, Jean will also be attending the Raymond James Beauty Leaders Dinner in London on March 19th. So please reach out to the respective sales representatives if you're interested in partaking in these events. Obviously, if you have any additional questions, you can contact Karen Daly from the Equity Group, our investor relations representative. Her telephone number and email address can be found on our most recent earnings release, and obviously I'm always available as well to answer any questions. We look forward to the next conference call, and I really wanted to thank you again and wish you all a great day.
spk05: Thank you. And that concludes today's conference. All parties may disconnect.
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