Grove Collaborative Holdings, Inc.

Greetings and welcome to the Grove Collaborative Holdings fourth quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during this conference, please press star zero on your telephone keypad. Please note that this call is being recorded. I will now turn the conference over to our host, Alexis Tessier, Investor Relations Advisor. Thank you. You may begin.

Hello, and thank you all for joining us today. With me on today's call are Grove's co-founder and CEO, Stuart Landisberg, and CFO, Sergio Cervantes. Before we get started, I'll quickly cover the forward-looking safe harbor statement. Some of the statements that we make today about our future prospects, financial results, business strategies, industry trends, and our ability to successfully respond to business risks may be considered forward-looking. Such statements involve a number of risks and uncertainties that could cause our actual results to differ materially. All of these statements are based on our view of the world and our business as we see it today. As described in our SEC filings, the underlying facts and assumptions for these statements can change as the world and our business changes. For more information, please refer to the risk factors discussed in our most recent filings with the SEC, which are available on our investor relations website at investors.grove.co. During today's call, we will also discuss certain non-GAAP financial measures. Reconciliations of these non-GAAP items to the most directly comparable GAAP financial measures are provided in our earnings release and supplemental earnings presentation, which are also available on our investor relations website. With that, I'll turn it over to Stu.

Thank you, Alexis. Hello, everyone, and thank you for joining our earnings call today. In 2022, we laid out our value creation plan with a goal of achieving profitable growth in 2024. And I'm pleased to report that progress against this strategy drove full-year results that were ahead of our guidance on both top and bottom line for 22. Our value creation plan is built upon four pillars, improved marketing efficiency, omni-channel expansion, net revenue management, and operating expense discipline. And we made progress on each during the fourth quarter. We have leveraged this value creation plan to make important strides to profitability over the course of the second half of 2022. Now, you will hear our growth talk more about the growth drivers for 2024 and beyond, starting with today's call. In 2023, we will have challenging comparables to 2022 when we overspend on marketing. That marketing overspend will benefit cohorts through the beginning of 2023. But as revenue stabilizes in the back half of this year, we are working to set ourselves up for growth in 2024. Our strategy for 2023 is to drive our core business to profitability while investing in three levers for material upside potential. The first is channel expansion into retail, which I've discussed previously and will talk about more on this call, category expansion into wellness on our GTC site via Grove Wellness, the launch of which we announced today, and three, mergers and acquisitions, including through our partnership with Humanco that we announced last quarter. We think this approach allows us to continue to push the overall profitability and growth while leveraging our unique market position for above-industry long-term trends. Now, onto our fourth quarter results. Marketing efficiencies continue to improve on lower spend levels across channels, particularly in paid social and organic. In fact, our fourth quarter saw the lowest CAC since 2020. In addition, we have further enhanced our segmentation, targeting, and creative with the new marketing technology stack we rolled out in 2022. We are pleased with the initial impact on customer engagement and anticipate that results will accelerate through the year as we further refine our capabilities. We continue to make progress in our omni-channel distribution expansion, though the retail rollout has been slower than initially anticipated. We recently announced the official launch of Groveco, our flagship zero-waste home care brand on Amazon, at select Walmart stores nationwide and on walmart.com. The Amazon launch was facilitated by learnings gained from our plastic-free personal care brand, Peach Not Plastic, which is approaching $1 million in lifetime sales on Amazon since its November 2021 launch. We remain excited about this growth strategy that is not only extraordinarily capital efficient, but puts Grove products in the places where over 90% of purchases in our category are made. During the fourth quarter, we also implemented several net revenue management initiatives focused on strategic pricing, both on third-party and Grove brand products, and on optimization of DTC net revenue priorities. These initiatives are particularly important in this environment where inflation remains stubbornly high, and while consumer response has been in line with our expectations, we are continuing to monitor our consumers' price elasticity in response to these actions. Lastly, by maintaining strict expense discipline, we've been able to streamline our operations and redirect resources towards initiatives that are most aligned with our objective of maintaining profitability while investing for long-term future growth. Successful execution of this four-part value creation plan drove market improvement in our financial results throughout the year. Adjusted EBITDA loss in the second half of 2022 was $19.1 million as compared to a loss of $60.7 million in the first half of 2022, a staggering improvement of $41.6 million as we implemented our VCP. In the fourth quarter, adjusted EBITDA loss was $9.5 million as compared to $9.6 million in the third quarter of 2022 and $25.2 million loss in the fourth quarter of last year. Margins declined 50 basis points sequentially and improved 1,610 basis points year-over-year and came despite lower revenue as we strategically cut back on advertising spend to focus on the most efficient channels. It's also worth noting here that once we removed the impact of non-cash items, gross margin and EBITDA margin went up both sequentially and year-over-year. Sergio will give more detail on that in his sections. Revenue in the fourth quarter was $74.0 million as compared to $77.7 million in the third quarter of 2022. While the reduction in advertising spend has resulted in year-over-year comparative pressure on revenue, our current efforts to improve advertising efficiency have driven strong results, and we remain confident that it is the right step to position ourselves for profitable growth in the future. During the quarter, we continue to make progress towards our goal of being free from single-use plastic waste by 2025. In the fourth quarter, 65% of Grove Brand's net revenue came from either zero plastic, reusable, or refillable products, meaning the company's beyond plastic standard, up significantly from 49% in the fourth quarter of 2021. We also improved on plastic intensity, or pounds of plastic for $100 in revenue. Sitewide and through our retail partners, plastic intensity improved to 0.98 pounds of plastic per $100 in revenue from 1.21 in the fourth quarter of 2021. And across all Grove Brands, plastic intensity moved from 0.80 pounds of plastic per $100 in revenue from 0.99 in 4Q21. We challenge others to disclose the same metric as we lead the industry in our move away from plastic. And I'm pleased to report that every sustainability metric in this paragraph is a record for growth. As I mentioned, one of the things I am most excited about is that we have line of sight to stabilizing our core business despite the challenging environment as we lap advertising as we lap the advertising overspend in the first half of 2022. We are investing in new capabilities in our communication stack and doubling down on benefits for our best customers to improve retention and set the stage for growth. I've already touched on the omni-channel distribution opportunity, so I'd like to take a minute to discuss the two other growth levers, wellness and M&A. Today, we announce the launch of Grove Wellness. Wellness is a massive market with dietary supplements alone expected to reach 53 billion in the US in 2023. Grove has always been known for curation on the basis of efficacy, sustainability, consumer centricity, and innovation in a complicated world. As we investigated our consumers pain points, an exciting 89% of respondents said they would trust Grove over other brands to provide them with wellness products. Consumer trust has never been more important as claims and bad practices abound And there is no true sustainability leader across the wellness space. And we are excited to help our consumers find products to improve their lives and see how they can drive sustainability into yet another category. Since our founding, our mission has been to make the CPG industry a positive force for human and environmental health. And we are excited to further this goal through our strategic expansion into wellness. I look forward to sharing more about this in future calls. The other future growth lever is Strategic M&A. During the quarter, we announced that we entered into an agreement with Humanco Investments, a subsidiary of Humanco, the mission-driven health and wellness holding company co-founded by Jason Karp and Ross Berman. Under the agreement, Humanco will help us identify, evaluate, and fund material M&A opportunities that can accelerate Grove's business and mission impact by quickly driving scale and shortening our path to profitability. Humanco has deep operational and capital markets expertise, and their founders have deployed billions of dollars in public and private companies. Importantly, Humanco shares our passion for making it easier for consumers to live healthier and more sustainable lives. After extensive diligence, Humanco acquired single-digit percent ownership in our company. We partnered with the intention of finding one or more highly synergistic M&A opportunities that has meaningful impacts to accelerate our profitable growth strategy. And to this end, Humanco has agreed to consider funding up to $100 million of new capital, as previously announced. While we remain laser-focused on continuing our path, to improve profitability as an independent entity, as demonstrated this quarter, we believe the difficult macroeconomic environment will provide step change opportunities to advance our mission and create meaningful shareholder value over the coming quarters and years. We plan to leverage our capital and strategic partnership with Humanco to evaluate exactly those opportunities that would allow growth to emerge stronger and better positions for growth, and that we think could create step changes in shareholder value. We are confident that we will achieve stable profitability of our business through continued execution of our value creation plan, and that we are investing in the right strategies to drive future growth and increase market leadership. Before I turn the call over to Sergio, I want to thank all of our team members for the hard work they do each day. Your commitment to our customers and to our mission is what makes everything possible. It is a true privilege to work alongside each of you. And now, I'd like to turn the call over to Sergio to review our financial results in more detail. Go ahead, Sergio.

Thank you, Sue. Similar to previous calls, we'll provide quarter-over-quarter comparisons in addition to the year-over-year changes, as we believe the sequential comparisons better reflect the trends in the business and the steps we have taken to position ourselves for sustainable, profitable growth. Four-quarter net revenue was $74 million, down 5% from the third quarter of 2022, and 15% year-over-year. Both comparisons were impacted by the strategic decision to reduce advertising spend as the company focuses on achieving sustainable, profitable growth in 2024, as soon discussed. Similarly, total orders were down 9% quarter-over-quarter and 25% year-over-year to $1.1 billion. And active customers were down 6% quarter-over-quarter and 16% year-over-year to $1.4 billion on a three-in-12-month space. Partially offsetting the declines in total orders were continued positive trends in DTC net revenue per order, which was of 5% quarter over quarter and 11% year over year to $63.4. This increase was driven primarily by the impacts of net revenue management initiatives, including the implementation of strategic price increases on both growth brands and third-party products, and the introduction of a supply chain fee at the end of the third quarter, as well as by strong performance from seasonals. We expect this long-term trend to continue, though we note it will be seasonally strong in Q4 and softer in Q1. Gross margin was down 210 basis points from the third quarter of 2022 and up 200 basis points year-over-year to 47%. Excluding the full impact of the inventory reserve in the fourth quarter, gross margin would have been 51.7%. The year-over-year increase was driven primarily by the positive impacts of the above-mentioned net revenue management initiatives, as well by the improved promotional strategy, partially offset by increased shadow costs, including inbound freight costs. Growth brand as a percentage of net revenue declined 140 basis points quarter-over-quarter and 220 basis points year-over-year to 45.5%. The year-over-year decline was driven by the launch of a large number of new third-party products to our website as compared to growth brands, as well as by a decrease in new customer orders, which tend to include more growth brands' products. Advertising expenses fell 20% quarter-over-quarter and 59% year-over-year to $6.9 million, reflecting our strategic pullback in advertising spend and focus on improving marketing investment efficiencies. Of note, we are pleased that as we reduce advertising, the impact to revenue is much less severe. We are pleased with improvement in advertising efficiency resulting from this change, which drove our lowest CAC since 2020. SD&A expense increased 12% quarter-over-quarter and 12% year-over-year to $51.7 million. The year-over-year increase was driven by a $7.2 million increase in stock-based compensation, largely from charges related to our use, from which we started to record related expenses in June 2022 when the performance condition related to going public was met, as well as by $5.3 million expense related to operating these right-of-use asset impairments and an increasing cost related to being a public company. This was partially offset by a decrease in fulfillment costs driven by lower oil volume and lower salaries and benefits due to a reduction in headcount, largely attributable to the rifts that occurred in 2022. Excluding stock-based compensation, severance, and the right-of-use asset-based impairment, SD&A's expense in the quarter would have been $35.1 million, or 5% less than the third quarter of 2022, and 17% less than the same period last year. The quarter-over-quarter decline was driven by lower salaries and benefits due to reductions in force, partially offset by an increase in costs related to being a public company and other professional fees. As a percent of net revenue, SG&A expense would have been 47.5% compared to 47.4% in the third quarter of 2022 and 48.8% in the fourth quarter of 2021. Our adjusted EBITDA loss was $9.5 million, a slight improvement from the $9.6 million loss in the third quarter and a material improvement from the $25.2 million loss in the fourth quarter of 2021, despite lower sales. Our adjusted EBITDA margin declined by 50 basis points quarter over quarter and improved by 1,610 basis points year over year to minus 12.9%, inclusive of the impact of non-cash inventory reserves. The year-over-year improvement was primarily due to the reduction in advertising spend. Net loss in the quarter was $12.7 million, compared to net income of $7.7 million in the third quarter of 2022, and a loss of $32 million in the fourth quarter of 2021. Net income in the third quarter and fourth quarter of 2022 was inclusive of $32.6 million, $22.4 million, respectively, in gains of the re-measurement of derivative liabilities. Turning now to the balance sheet, we finished the quarter with an inventory balance of $44.1 million, down $11.9 million from the end of September 2022, fueled by our year-long efforts to improve working capital, coupled with increasing the inventory reserves. We ended the quarter with $96 million in cash, cash equivalents and receivables cash, down $7.8 million from the previous quarter, mainly from adjusted dividend losses, partially offset by improvements in working capital. As previously announced, during the quarter, we also refinanced our debt obligation to extend maturity. The new 72 million term loan facility does not have any maturities or amortization until summer 2025, has limited operating covenants, and was executed at third terms in a challenging market. Subsequent to the end of the quarter, we close on an asset-based loan facility with 35 million total capacity, for which borrowing capacity is calculated from our inventory and account receivable balances. The loan is for a term of three years and will support our strategic initiatives and working capital needs. We feel good about our current liquidity position and plan to continue our aggressive push to profitability in addition to actively managing our capital structure. Now turning to our outlook. We made considerable strides towards profitability in 2022, ending the year at a significantly lower rate than the rate we began it with. Yet the macro environment remains challenging. Consumers continue to feel pressure, and we are seeing the impact across our businesses, particularly in the retail channel. We view 2023 as a transitional year for growth, during which we will continue to focus on profitability, stabilize our core business, as we love the reduction in advertising spend that began in the second half of 2022, and generate new sources of growth to position ourselves for profitable growth in 2024. Factoring our performance to date and our expectations for the remainder of the year, we are offering the following guidance. For the 12-month period ending December 31, 2022, we expect Net revenue of 260 to 270 million. Adjusted EBITDA margin of minus 9% to minus 11%. In conclusion, while the environment remains challenging and the headwinds for our strategic reduction in advertising spend will drive revenue down year-over-year in 2023, the year-over-year improvement in adjusted EBITDA give us confidence that we're starting the right way. We continue to invest in future road drivers such as open channel expansion, the health and wellness vertical, and the strategic M&A, and are excited about the future as we position ourselves for long-term success and leave the CPG industry away from plastic. I'd now like to turn the call back over to Sue for some closing remarks. Go for it, Sue.

Thank you, Sergio. We're very pleased with the improvements that we have made in our push to profitability. rapidly moving the company towards positive diva dot despite the challenging environment we are also very pleased with our efforts to ensure strong liquidity through restructuring our balance sheet with no maturities until 2025. as sergio stated we plan to continue our aggressive push to outperform especially on the bottom line throughout 2023 and set ourselves up to drive growth once we are past the challenging variables to over investment in marketing in 2022. That, combined with opportunities for growth in retail, wellness, and M&A, should make this a very exciting year for Grove, for our mission, and for all stakeholders. We are now happy to answer any questions you may have. Operator, please open the line for questions.

Thank you. And ladies and gentlemen, at this time, we'll be conducting 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 star 1 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. One moment, please, while we poll for questions. Our first question comes from Susan Anderson with Canaccord Genuity. Please state your question.

Hi, good evening. Thanks for taking my question. Nice job on improving the profitability this quarter. So I was wondering maybe if you could give some more color on the new health and wellness category that you talked about. I guess, will you be creating your own new brands for this category or distributing third party? And I assume it's going to be through your own DTC site, at least in the beginning?

Thanks for the question, Susan. When we look out at the categories that are within our overall desire to create impact, we think that wellness is incredibly compelling for a few reasons. I mentioned market size on the call. It's also one that has incredible retention and regimen build when you get a consumer a product they truly love. And when we surveyed our consumers, something like 78% of consumers are already taking vitamins and supplements. And the stat I mentioned on the call blew us away, 89% of them, would trust Grove over other brands to provide them. And so when you look at that and the lack of sustainability leadership in the space, we were sort of compelled, almost forced to do it. And from a business perspective, when you look at the P&L, these are higher average unit revenue products than our core home care category. And when done well, it can also be a higher margin category. There's a lot of really exciting business elements for us. In terms of how it will come to life, it'll come to life first for folks who are already existing customers of growth, and we'll start through our direct-to-consumer platform. We have a vitamins brand called Honu, I shouldn't say vitamins, just a supplements brand called Honu, which is a sort of legacy brand that does pretty well. I think it's unclear if that one will be the future for us, but what we are certain of is that the playbook of gathering data from a direct-to-consumer business model to allow us to create real innovation that answers a customer need is one that works in home care, works in personal care, and we are certain will work in VMS. So the way that you should expect wellness to roll out is first as an enhancement to the direct-to-consumer offering, and then hopefully over not too much time, a place where we can leverage the learning in the second pillar category to not just improve our P&L today, but really help us build brand through innovation, from a sustainability and efficacy perspective, just like we did in home care, in a second category that can drive expansion. And you know as well as I do, the timeline for product innovation can be long, so I don't want to say that's going to come out and impact our 2023 financials. But certainly we expect to use the same playbook that's been really successful in driving customer satisfaction, loyalty, and innovation on the home and personal care side. We expect to bring that same playbook to wellness, and I think there's a huge opportunity here both on the sort of direct to consumer side and over the long term on the brand building side.

Great. And do you, I guess, just thinking about, you know, kind of ramping that business up, like how should we think about the investment needed, if any, to kind of ramp that category on your site?

I think the investment is, really comes in the form of being willing to invest in brand building on the site, even if it takes a little bit of time to build awareness. And so you've probably heard Sergio and I talk a lot about profitability on this call, on the last call, and that absolutely is our focus. As I said earlier today in the team meeting, the first word in profitable growth is profitable. So we are cautious of over-investing here and feel really fortunate to have an extraordinary base of customers that we can build brand with organically. So that's where we are going to start. If you do see us make a big investment here, it'll be one that we have a ton of conviction in. And because we have the data to support that, that's an investment that can really step change what's happening for us in the category.

Great. Okay. And then if I could just add one more. I'm curious, I'm not sure if you talked about just the growth in wholesale versus DTC in the quarter, if there was any big divergence there. And then also the recent rollout to Amazon, Walmart, et cetera. I'm curious if there's any early reads there and if you're seeing any impact on the other channels that you already did business in, such as like your own DTC site or Target.

Sure. So we're not going to comment on the relative growth of channels just yet. But to answer the question about Walmart and Amazon, it's too early to say in those channels. I mean, obviously, we're excited about both of them. But in both cases, we're thinking long term, not short term. And so we will see how they go. I'm excited, but I'm also very aware it's too early to understand exactly which direction those will go in. From a cannibalization perspective across channels, we've now gone from 1,600 target doors to well over 5,000. We haven't yet seen any reason to believe there's a cannibalistic impact from one channel to the other. In practice, what's probably happening is we are losing some customers to Target and other places, and there's probably other customers who find us in Target and then come to our direct-to-consumer site. What we really do see is the biggest result of growing our retail presence is that our awareness is growing. And we think that will have long-term benefits across the omnichannel footprint, but we don't have any reason yet to think that we're trading customers off among channels.

Yep, okay, great. Thanks so much. I'll let someone else hop in. Good luck this year.

Thanks, Susan.

Thank you. Just a reminder to ask a question, press star 1 on your telephone keypad. Our next question comes from Dana Telsey with Telsey Advisory Group. Please state your question.

Hi. Good afternoon, everyone. As you think about the adjustments to the earnings for this upcoming fiscal year with the lowered sales guidance but the lesser EBITDA loss, how much of this is due to the reduced marketing spend? And as you go forward with the new business with health and wellness, how much is invested in marketing there? And then just lastly on the expansion into retail, how do you think of that expansion into 2023? When do you add more doors? How do you assess it? Is it different with each particular company? And how are you planning inventory? Thank you.

Hey, Dana. Thank you for the questions. I'm going to do my best to answer them in sequence, but I may need a reminder after question one. So I'll give a high level of how we think about the priorities in terms of revenue and bottom line. And then Sergio can speak more specifically to your question. I think when we look out across our push to drive profitable growth in 2024, and we do still think we will grow that year, and we do still believe it's possible that we will hit profitability that year, very optimistic. The goal for us really is to understand what we where our cohorts sort of imply that we will hit the bottom of the curve and start growing. Talked a little bit about on the call, the big marketing spend in the first half of 22. And just as a reminder to folks, if you haven't seen our first investor presentation, really the first six months of the cohort's life are particularly strong. And then the first 14 months are strong. And then after the first 14 months, you really don't see a whole lot of degradation. So if we are lapping high marketing spend through June, 14 months from there is where we'll stop having the particularly tough comparables on a year-over-year basis. So we can look at that and say, gosh, what builds the best P&L for 2024? And also, how do we build the right muscles around improving marketing efficiency, which I've been extraordinarily pleased with our progress, and pushing for faster payback, and improving metrics up and down the P&L, including gross margin. And you can see revenue came down on a year over year basis, but gross margin came down less because we're really doing a nice job controlling margin. So I'll let Sergio speak to the specifics, but our overall goal really is to make sure that we emerge from 2023 with a healthy P&L and an incredibly healthy set of practices and metrics across the business that can drive sustained profitable growth. And we think we're putting the building blocks in place now. Sergio, if you want to speak specifically to the question of marketing investment.

Yeah, of course. And Dana, probably I will need some reminders as I answer the question. Okay. So first of all, I think the answer to your question is yes. So one of the biggest impacts that we have seen and it's a conscious decision as we move into the future for previous discussions is prioritizing profitability. So reducing the level of investment, yes, is impacting. It's impacting the growth that we have projected before and that we have put out as guidance for 2023. So the first answer to that question is yes. Second answer, which I believe you said is so, how much is coming from reducing marketing basically and how much is coming from other factors? I would say at this point, because I'm not going to digest and clarify, split specifically the question, but I'm going to tell you that the majority is coming from the reduction in advertising, as you could imagine. And the second part of that one is a slower retail environment that is not pacing at the level that we want it to be. It's still favorable, we're still winning, but it's not growing at the pace that we wanted it to grow. So that answers that part of the question there. Can you remind me of the reminder?

The other one is just when you're thinking about the retail expansion, what allows you to expand more or less? What's the assessments of how you're progressing forward with that, with the new businesses you just added?

Yes. So I'm going to take part of that question, and Sue is going to complement the answer. So basically, as we Of course, part of the strategy as Stu was describing, we have three levers for that growth, and it's pretty important for us to continue pushing for the growth. So we want to get the growth to expand the business, and one of those opportunities is the retail environment, as you know. So expanding retail, the decisions that come to the where to expand, how to expand, and how much to expand is basically based on the decision of which are the big players, what are the changes that can give us the labor action, the return on investment, the fastest, and whether we want to create long-term partnerships. So those together with the assessment of volumes, the assessment of how they go to market, what type of businesses they carry in the different regions, that's part of the assessment. How much would that cost? And of course, at the beginning of each of those investments, you would imagine that we have impact in the profitability. And as we go and grow in the different channels, we expect these to become profitable by having better leverage on the levers that we can pull, by reducing the level of investment that is required at the beginning of each launch, and also by having more awareness of our brand out there. But I'm going to leave also some space for Stu to answer these questions.

I think that's well said, Sergio. I will just say, I think at a high level, Dana, we see that the push towards zero waste from consumers is continuing to be a big tailwind for us. And I think that's something like 84% of U.S. consumers want to see action taken on single-use plastic. And our brand is such a clear market leader in the push away from single-use plastic that it keeps us in every conversation. And I think, you know, when I look at partnerships across the board, I think, you know, look, we're learning into retail. We have a little over a decade of experience in DTC and, you know, not even two years in retail. And so as we continue to learn into the channel, I think the core thing that allowed us to be so successful in gaining distribution, in growing SKU count and continuing to put up good velocity numbers, really is that intrinsic consumer value proposition of being a product that answers an unmet need in terms of zero waste that can be available at a really approachable price point. And that has extraordinary efficacy that drives high repeat. And so I think, you know, Sergio is right. The rollout has been a little bit slower than we had originally anticipated, but growth rates in this segment are still very healthy. We expect them to continue to be healthy. and the core thesis that's allowing us to grow is very much intact. I think you had a third question there, Dana, and I think I lost it somewhere in the front.

We can take that offline. No problem. I'll pass it on. Thank you.

You got it. Thank you. And there are no further questions at this time. I'll hand the floor back to Stuart Landisberg to conclude. Thank you.

Thank you much. Well, thanks, everyone, for listening. Really looking forward to a very exciting year through 2023. Many thanks to you all for your support, and I hope you all go check out growth.com backslash wellness for our new wellness launch today. Thanks very much.

Thank you. And that concludes today's conference on Parties May Disconnect. Have a great day.