The J.M. Smucker Company

Hello, and welcome to the J.M. Smucker Company's Fiscal 2022 Second Quarter Earnings Question and Answer Session. At this time, all participants are in listen-only mode. During the Q&A, please limit yourselves to two questions and re-queue if you have additional questions. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Aaron Broholm, Vice President, Investor Relations. Please go ahead, sir.

Thank you, Kevin. Good morning and thank you for joining our fiscal 2022 second quarter earnings question and answer session. I hope everyone has had a chance to review our results as detailed in this morning's press release and management's pre-recorded remarks which are available on our corporate website at jmsmucker.com. We will also post an audio replay of this call at the conclusion of this morning's Q&A session. During today's call, we will make forward-looking statements that reflect our current expectations and future plans and performance. These statements rely on assumptions and estimates and actual results may differ materially due to risks and uncertainties. Additionally, we use non-GAAP results to evaluate performance internally. I encourage you to read the full disclosure concerning forward-looking statements and details on our non-GAAP measures in this morning's press release. Available today on this call are Mark Smucker, President and Chief Executive Officer, and Tucker Marshall, Chief Financial Officer. We will now open up the call for questions. Operator, please queue up the first question.

Thank you. If you'd like to be placed into question queue, please press star 1 on your telephone keypad. As a reminder, we ask that you please limit yourselves to two questions and re-queue if you have additional questions. Once again, that's star 1 to be placed into question queue. If you'd like to remove your question from the queue, please press star 2. One moment, please, while we poll for questions. Our first question today is coming from Andrew Lazar from Barclays. Your line is now live.

Great. Thanks so much, and good morning, everybody. I guess the first one is on elasticity. Thus far, volume elasticity has been lower than what you'd forecast and below, I guess, what you've seen historically, and we've seen that for the group more broadly. It sounds like, for at least the way you're thinking about modeling for the fiscal second half, that you're building in somewhat greater elasticity than you've seen thus far as pricing kind of kicks in, that could start to hinder volume growth a little bit more. And I'm trying to get a sense whether this is more out of conservatism or if you've started to see maybe more volume impact from pricing more recently as it's kind of kicked in in a bigger way.

Andrew, good morning. Good morning. With respect to your question, we are increasing our full year net sales guidance by approximately $160 million, or 2%, at the midpoint. It really relates to half associated with over-delivery in our second quarter, or $80 million. Of that $80 million, what we really saw was underlying business momentum against our brand and growth imperatives. along with better than anticipated elasticities from our initial round of pricing actions over the summer and early fall. As we think about the back half of the fiscal year, we are anticipating incremental growth of $80 million against our prior expectations. The prominence of that is coming from continued momentum of volume mix and those better than elasticities. However, in our fourth quarter, we do have significant pricing actions, particularly in coffee, and to a lesser extent in pets associated with cost inflation. As a result of that additional round of pricing that will take place in the fourth quarter, we have factored in elasticities against that pricing waiver action. And so, therefore, that is all factored into our guidance.

Great. Thanks for that. And then, secondly, you recently announced the plan of construction of a new facility for Uncrustables, which I think is going to expect it to double brand sales to a billion in the next five years. And, you know, it looks like that could essentially drive about sort of one point of sales growth for the overall company per year, I guess, or about half of Smucker's 2% annual organic growth target kind of on its own. So clearly the brand is now big enough to sort of matter and move the needle. And I guess my question is, with the brand now at about 70% ACV, I guess, how are you thinking about driving the growth in this brand in terms of incremental distribution opportunities, you know, at current customers? versus expanding ACV by entering new customers? Thank you.

Hey, Andrew, it's Mark. Thank you for the question. You know, the first headline in response is that this is fundamentally about our strategy of investing where the growth is. In other words, we've talked about reshaping our portfolio, which is not only about M&A, but it's also about making sure that we're – Putting resources against our largest opportunities and Uncrustables is clearly one of those. If you think about 30 consecutive quarters of growth, mostly and almost every one of those quarters has been double digit. This last quarter was about 33%. We're going to hit our half a billion dollar target a year early. which is fantastic, and that has been supported by the investment in our second facility in Longmont, Colorado, which we continue to invest in and add lines there to support getting to, of course, over a half a billion. And yes, you're correct, the investment in the Alabama facility, which we will break ground on in the next couple months, will support obviously further growth to what we believe could be north of a billion. And so the reasons why, the reason to believe is there's just a ton of runway on this brand. I mean, household penetration, number one, is still low. It's only about 11%. There's significant room for growth in household penetration. Number two, we have not invested significantly in marketing. And so we have not turned on any significant consumer spend. And then there is runway, even just on our core peanut butter and jelly offerings, whether that's in particular places in U.S. retail, certain locations and away from home. We have not turned on Canada yet. And then there's opportunities in the convenience space. channel. So if you think about all of those, plus the fact that we haven't done any really meaningful innovation, we just think there's a ton of growth, uh, opportunities and momentum for that brand.

Great. Thanks very much. And have a great holiday.

Thank you. You too.

Thanks. Our next question is coming from Ken Goldman from JP Morgan. Your line is now live.

Hi, thanks so much. Um, quick question on free cash. Um, I think the implication is that you're expecting maybe around $80 million less in operating cash flow than you previously expected, just looking at your guidance for that in CapEx. And you had highlighted inventory as the biggest headwind. Can you just maybe elaborate a little bit on what's driving that expected inventory increase and how long you anticipate it lasting?

Good morning, Ken. So our free cash flow target for the fiscal year is now $700 million. Really what is driving that is the decrease in year-over-year earnings along with the building of inventory associated with working capital requirements, as you've noted, inclusive of us taking up capital expenditures in support of the Uncrustables facility expansion. With regard to the inventory levels, what we're trying to do is make sure that we have the right both raw materials and finished goods within our network in order to ensure that we are in stock and on shelf and that we're also managing through supply chain challenges, shortages, along with business continuity. And so in the near term, we should expect elevated levels of inventory. As we work through the balance of the fiscal year and think about next year, we can provide an additional update on sort of the longer-term implications of inventory levels. But right now, it's just ensuring that we have product to supply.

Makes sense. Thank you. And then just a quick clarification. I think you mentioned that productivity will help offset some of the inflation you're experiencing. Are you increasing the amount of cost savings that you were looking for, which I think was around 50 million? Has that number gone up or is that still around the same amount that we should be thinking about for the year? Thank you.

Ken, we are not changing our annual savings target of $50 million when we talk about productivity savings associated with cost inflation. What we are describing here is that we are seeing low double-digit year-over-year cost inflation that needs to be covered through rounds of pricing actions in this fiscal year. We also acknowledge that over time to support both dollar profitability and percent profitability, we will need to continue to advance productivity in the form of savings across both our cost of products goods sold and our SG&A environments to support the overall long-term health and profitability of the company, which we remain committed to.

Thank you. Our next question today is coming from Laurent Grandet from Guggenheim. Your line is now live.

Hey, good morning, everyone, and congrats on the strong quarter. So, My first question is really a follow-up from Andrew's question on Uncrustable. You experience very good and strong sales with that brand, but you mentioned in your pro-mark that you will be finalizing the construction of the second line by the end of next fiscal year. So will that constrain Uncrustable sales in the short term or more into next fiscal year?

Laurent, you are correct. We expect by the end of our fiscal 23 to have the phase two of the Longmont, Colorado facility complete. And that will enable the ongoing expansion above $500 million sales target. And so therefore, we do not see a constraint in the near term associated with the continued growth of that brand and business.

Okay, perfect. Thanks. My second question is about the guidance. You are one of the very few food companies to not only increase the top-line guidance this quarter, but also, I mean, your EPS, despite a very volatile environment. So what can give you that level of confidence, or in other words, what's the level of caution you've got built in? Thanks.

Laurent, you are correct, we did raise both the low end and the high end of our guidance range by 10 cents. That really is broken down as follows. We over-delivered our second quarter by 40 cents, which was primarily driven by favorable business momentum and better than anticipated elasticities, along with some cost savings. We anticipate an additional 30 cents in the back half from that ongoing momentum. being offset by $0.60 of additional costs, partially offset by fourth quarter pricing actions. And so therefore, that $0.70 over delivery or increase to our expectation is being offset by $0.60 of cost price impact, therefore supporting the dime that we increase both the low and the high end of the range. We do feel that we have a balanced guide at the midpoint at this point from both the top line standpoint and the bottom line that gives us a balance in delivering the fiscal year.

Laurent, this is Mark. I may just add that just to your point about confidence, clearly we're operating in a very dynamic environment where there have been a number of challenges, whether it's supply chain related or inflation, what have you, I think fundamentally the reason that we have continued to deliver is because our execution has been excellent. Our people have been extremely agile and been able to pivot and react or in many cases anticipate challenges before they happen. And so it's a combination fundamentally of detailed supply chain management and then the combination of both consumer and customer execution. So marketing and sales execution working together in concert along with our supply chain management, I think has truly allowed us to continue to deliver consistently over the last few quarters.

Thanks, Mark, and keep up the very good execution. Thank you.

Thank you for the support.

Thank you. Our next question today is coming from Chris Crow from Stifel. Your line is now live.

Hi, good morning. Good morning. Hi. I just had two questions, if I could. And the first was just to understand in the quarter, to understand how pricing's keeping pace with inflation. If we were to look at PNOC, pricing out of cost, that was negative in the quarter. Are you seeing that catch up then in the second half of the year where pricing should continue to accelerate? Or is it more so in the fourth quarter when more of that pricing kicks in?

So as you think about the walk for the year, we took an initial round of pricing in the mid-summer timeframe that is really benefiting the back nine months of the year. And so that is coming in to help support sort of the initial look that we had of cost inflation coming into the fiscal year. When we came through our first quarter, we had additional cost increases that we were seeing that we have taken subsequent rounds of pricing that we will start to see benefiting primarily the fourth quarter, to your point. And then lastly is we have seen increased costs since our last call, primarily in green coffee and in transportation, which is having us to take an additional round of pricing in our coffee portfolio and pet portfolio as well, and we believe that benefit will come through in Q4. So to your point, yes, we are seeing a predominant of the benefit coming through our Q4, and then we will pick up sort of the lapping effect into the balance of FY23.

Okay, that was helpful. Thank you. I had one other question perhaps for Mark, and I guess I'm just curious how you see the health of your core consumer today. I know it's a broad question and a broad view, but when we see the brands in general doing so well, your brands gaining share, private label losing share, we had some iri data to confirm that again today um and this is all occurring amidst you know a high level of pricing so elasticities have been low and almost non-existent for most companies does that change as we continue to move maybe into 2022 do you take a more you know conservative view of elasticity as a result of just all the pricing into the consumer and and and they're what has been to this point very strong growth in the brands sure chris you know i think tucker in a

One of his previous answers talked a little bit about some of our elasticity assumptions going forward. But the success that we've experienced is a couple things. First and foremost is what I just said in Laurent's question about the firing on all cylinders of managing the supply chain through all of its dynamic changes as well as continuing to invest in our brands during this time, not cut marketing in a material way, but in continuing to invest. We've had some world-class marketing campaigns, notably GIF, most recently, as well as just this store-level execution to make sure that we do our best work trying to keep our brands in stock. So I think it's those things plus what we believe is an ongoing tailwind of elevated at-home consumption driven by the fact that folks are not going to go back to work the way that they once did. There is going to be, we believe, a hybrid work model that is going to keep people in their homes more than they used to. And so since we clearly are, you know, breakfast and lunch oriented, that is definitely going to continue to support our business, as well as, as you know, focusing on pet snacks. Milk bone alone was up 17% in the quarter. So we've just had some very nice results supported by both our execution and then some of this, what we view as a persisting tailwind of at-home consumption.

Okay. Thank you for that, and happy holidays. Thank you. You too.

Thank you. Our next question today is coming from Steve Powers from Deutsche Bank. Your line is now live.

Hey, great. Thanks, and good morning, everybody. Good morning. Maybe just circling back to productivity, I think in response to, I believe it was Ken's question earlier, you said you were not taking up productivity targets for 22. But you have updated your SDNA forecast lower despite what I would assume is upward pressure on some of those components, right? So maybe you could just help me out there in terms of where those savings are coming from and if they're just sort of a pullback on more discretionary items as opposed to corporate activity.

Yeah, I think it's to the latter of what you said. It's more of a pullback on discretionary items and just year-over-year favorability. So SD&A expenses are now projected to decrease by approximately 7%. That's really due to the benefits of our cost management and organizational restructuring programs that we initiated a year ago. It's also the benefit of lower marketing spend. And that's really because we're lapping a pretty strong fourth quarter spend from the prior year as well. And also it's from reduced incentive compensation and other reductions in discretionary expenses. And so I think it's more of the latter of what your question asked as opposed to the former.

Okay, that's helpful. Thank you. And I guess maybe shifting gears, just if we could circle back to a topic that was sort of in focus last quarter and maybe just if there are any updates in your thinking around Nutrish on the dry dog food side and what you're planning to drive some future reinvigoration there.

Sure, Steve. So, First of all, as we talked last quarter, and this will probably be a little bit repetitious, our pet strategy, you'll recall, is really contingent on three legs of the stool. The first and priority is PetSnacks because we are the leader in PetSnacks and continuing to direct resources to our PetSnacks business. Our cat food business, where we are a solid number two, and MeowMix has experienced significant growth. continues to see quarter-over-quarter growth, even sequentially. And so those two, clearly where we have stronger leadership positions are priorities. And then, of course, the third leg is our dog food, where we are not as much in a leadership position and recognize that and acknowledge last quarter that we are not going to experience the same level of growth on our dog food business as we would on the others, but it still serves an important role. Nutris specifically, albeit a relatively small portion, did do well in the quarter with about 5% growth total over the entire brand. And actually, Dry Dog saw about 1% growth in the quarter. So we did experience some growth. And we remain committed, if you recall, to the entire Nutrish brand, which includes both snacks as well as some wet products as well. And let me correct myself. I thought I was right. Four percent was our growth on dry dog. So we did have a solid quarter on dry dog on Nutrish this quarter.

Very good. Thank you very much.

Thank you. Our next question today is coming from Brian Spillane from Bank of America. Your line is now live.

Hi. Thanks, Operator. Good morning, everyone. Tucker, maybe just to follow up a little bit on the inflation, you know, we're at a, I guess, now low double-digit run rate year-to-date. And so I guess what I was trying to get some perspective or would like to get some perspective on, you know, do we think at this point that we're you know, closer to a peak in terms of just where cost elevation goes and maybe underneath that, just so we're thinking about maybe the next 12 months even, just what are the pieces that continue to be areas of pressure and may continue to put pressure and what might actually, you know, be a source of maybe more moderation as we look forward? Just really trying to understand, you know, continues to elevate and, you know, What are the probabilities that that rate of inflation, as we come back a quarter later, continues to move higher?

Brian, good morning. As you've noted, we are experiencing low double-digit year-over-year cost-of-products goods sold inflation. That's going to equate over $550 million against our total cost basket at COPS. And the key elements of that that we've been pretty consistent since the beginning of our fiscal year are commodity and ingredient inflation, packaging and transportation inflation as well, and you are also now seeing some labor-related inflation as well. Part of that, too, is also just the discontinuity and the disruption of the overall supply chains that are factoring into that. But as we see the balance of our fiscal year, we think it's, It still continues to increase, but it's sort of increasing at a decreasing rate, and we're able to sort of get our arms around the balance of this fiscal year based on what we see to date. We continue to successfully execute and manage through this overall environment, but I think looking much beyond our current fiscal year is probably not prudent at this time, just as we continue to understand the signals beyond the current fiscal year. I just want to, again, acknowledge the tremendous work that our teams have done to manage this overall inflationary environment, not only on the price side, but also on the productivity and production front.

Okay. Thanks for that. And then I guess as we're thinking about the incremental pricing actions, right, you know, the incremental price that you're going to take back half of the year, is that – Are those price increases really matching the inflation that you know now? And I guess if inflation continues to go higher, would it maybe suggest that at some point you'd have to come back for additional rounds of price increases?

Yeah, Brian, it's Mark. The short answer is our playbook fundamentally hasn't changed. And so the intent is to fully recover over time, acting as a leader in our categories, right? And so, you know, list price movements, as we have seen over these last several months, are not unusual. And because they are so ubiquitous, obviously the tide sort of raises all boats. So everyone is experiencing it. I would also just highlight that in addition to these list price increases and our intent to fully recover, within that we can use other levers like optimizing our trade spend and obviously some of the productivity initiatives that Tucker previously mentioned. But yes, over time our intent is to fully recover. And as you've heard us say over the last couple quarters, there is some timing lag from when those actions hit the marketplace. All right. Thanks, Mark. Thanks, Tucker.

Have a happy Thanksgiving, both of you. Same to you.

Thank you. Next question today is coming in from Alexia Howard from Burns Senior Line. Is that live?

Good morning, everyone.

Good morning.

So two questions here. First of all, the guidance for fiscal 22 has obviously been changed quite a bit over the last couple of quarters and now there's a modest guy down to the third quarter and things should get better with pricing in the fourth quarter so there's a lot of moving pieces here um if you had to summarize the key uncertainties sort of you know what what are the biggest uncertainties here uh in in your mind as we look out uh for the remainder of fiscal 22 and even into 2023 uh what would you how would you rank order them

Alexi, it's Mark, and I'll start here. So first of all, I think it's what we've been saying in terms of just the supply chain uncertainties, how dynamic that is, some of the labor challenges that exist across multiple industries. I think if you think about those components, those are probably going to persist for the foreseeable future. I think that's been a pretty consistent theme. The way I would describe it is when I say dynamic, what we mean is the challenges that exist can change week to week, month to month. It could be an ingredient or a packaging component. At one point, it could be some isolated labor challenges in a particular geography. So it really is somewhat of a moving target. And the fact that we... you know, about six months ago did actually change some of our organization structure. We became a flatter organization, which truly has allowed us to be very agile and pivot to those where we do see challenges very quickly. And again, I think it's that ability to be agile and to respond to this very dynamic environment that has allowed us to stay on top of it and continue to deliver products ultimately to our end customers.

Great. Thank you very much. That's incredibly helpful. The follow-up question, you mentioned in, I think, the prepared remarks that you have an improved commercial model and you have investments in data capabilities. Can you just describe what you can do now as a result of that that you couldn't do before so we get an idea of really how the capabilities are developing? Thank you, and I'll pass it on.

Sure, Alexi. Thanks for the question. So the general headline is what I said before. It's just a combination of both consumer and customer marketing and sales execution. Those two things working together has been incredibly successful. If I recall, we may have spoken a bit at Cagney last year about some of our new online capabilities that actually, just by way of an example, with our retail customers, we have rolled out a capability where we are able to actually see outages, for example, in store clusters or geographies and are able to react to potentially those out-of-stocks quickly. and make sure that if we're in, say, a major metropolitan area with one customer, that we can actually go in and target specific groups of stores and actually ensure that we're getting product on the shelves, whether that's even out of the back room or not. It's truly very tactical, but we believe that that capability is one example of how we're able to quickly react, and we do believe that that's best in class.

Great. Thank you very much. I'll pass it on.

Thank you. Our next question today is coming in from Robert Moscow from Credit Suisse. Your line is now live.

Hi. Thanks. One of the bigger surprises for me, and there were several of them, was to see PetSnacks' growth so strong in the quarter. The Nielsen tracking data doesn't really indicate that. And I was wondering if you could be more specific as to which channels you're seeing the snacks growth come in. And then I had a follow-up on labor. When you talk about labor challenges, to what extent is that challenges within your own four walls, or is it really mostly at the distributor level and at the retail level? Thanks.

Rob, it's Mark. Let me start with your second question around labor. It is systemic, as you know, and as I mentioned to Alexia, it is a moving target in terms of where we might experience certain labor shortages. I think it depends on the geography of Sometimes in certain geographies, we may be competing for skilled labor. What I would tell you in general is that less skilled labor, which sometimes would be in distribution centers, is the labor that probably moves around the most, and we see probably the most turnover. But again, I think we've been... very agile at adapting to the challenges and being able to stay on top of things for the most part. But it is, again, it varies and it can shift over time. Pet snacks, I think in terms of a little bit more specifics, obviously we have been supporting our pet snacks business with advertising, which has been very effective. And again, some of the other capabilities around sales at the store level have allowed us to remain in stock. And MilkBone specifically has been supported by some new innovation, which has actually done reasonably well also. So it is a combination of all of those things that has been supporting our snacks business, as well as MilkBone specifically. The one other comment I would make, and just from a channel, I think we might have to follow up with you on the specifics of that, but what we are seeing in our numbers is typically growth across all channels and that the consumption growth that you're seeing is generally in line with our sales growth.

Okay. I'll follow up later. Thanks.

Thanks. Our next question is coming from Pamela Kaufman from Morgan Stanley. Your line is now live.

Good morning. I was wondering if you are making any adjustments to your marketing and promotion strategy for the year, given the stronger than anticipated demand that you've seen.

No, we are actually moving forward and basically sticking to our guns on our marketing plans. Given the inflation... across our portfolio more broadly, the percent of sales that you would see will be down slightly versus last year, but our marketing budgets are very much in line with what they were last year. Coffee is actually up slightly, and so we continue to invest in our brands.

Thanks, that's helpful. And clearly there's a lot of investment behind Uncrustables given the strong growth that the brand is seeing. Are there other products in the portfolio where you see opportunity to step up investment? And maybe you can touch on some of the innovation that you're working on. You mentioned in pet treats, but are there other areas where you see particular opportunity to step up investment and innovation?

Yeah, sure. The milk bone, for example, is really around premiumization, and there's a number of New MilkBone products, you know, think about biscuits being dipped in some other product. Peanut butter, for example, you know, peanut butter on a dog biscuit is one. Those do very well, and those are relatively easy line extensions for us to do, and so we've done well on MilkBone. That's a really good example. MeowMix, we've continued to invest in marketing there, so we've seen good growth on MeowMix. And then Dunkin' and Bustelo in coffee, both have maintained their households. In fact, what we're seeing is that they are the two brands in the whole coffee category that have maintained their households, both of double digit. And so continuing to invest in those brands as well. And then finally, just on Folgers, You know, as we know, the category continues to shift to K-Cups. Keurig has done a great job just in terms of selling more brewers, and we think there's going to be probably a couple million more brewers coming online. And our Folgers brand has been doing fantastic in the K-Cups space. So just shifting our portfolio again to where the growth is going has really benefited us.

Thank you.

Thank you.

Thank you. Our next question today is coming from Rebecca Scheunemann from Morganstar. Your line is now live.

Great. Good morning. So, you know, taking a look at Smucker's history of innovation, and Crustables has been a clear home run, but there have been a few stumbles of late. And I'm just wondering if you could kind of share your product development process And what Smucker's does to set itself apart from others in this highly competitive industry?

Sure, Rebecca. The first is, as you mentioned, we have been focused a few years ago on fewer, bigger. And I think we did have a couple stumbles there. Our 1850 brand, notably, is still in the market and is sort of steady. And so our 1850 brand, which was a relatively big launch in coffee as an extension of Folgers, has done decent and remains in market. What we learned through that process is that you have to have a combination of smaller and larger vets, and if you get the mix right, it works. I would highlight that even when we have had stumbles, our growth, from new products has been consistent with our algorithm over time. And so even in the years where we feel like some of our larger bets may not have been as successful as we hoped, we still delivered against our growth algorithm on new products. And we really feel like right now we've got the mix right. I've already mentioned several times about some of the milk bone and some of the other innovation that we've been seeing. And just getting that mix right, Jif Squeeze is another really good example of just taking peanut butter and putting in a different, more convenient packaging has been very successful as well. So it's just, at the end of the day, it comes down to knowing your consumer and getting the balance right.

That's very helpful. Thank you. And also, so it was about a year ago now at your investor day, you laid out your new plan to redesign your marketing model. And I was wondering if you could provide an update on how that strategy is progressing. And as part of that, if you can share, like, what percent of your media spend is allocated to digital mediums?

Okay, I'm going to, the last part of your question, it varies by category, but it would be roughly 60-40% It's in the 60-40 to 50-50 range, and what that means is mass media is important because it's all about reach. It's about reaching as many consumers as you can. Digital is more about targeted, so you already have consumers and you're trying to make sure you keep them in your brand franchises. That's an oversimplification. But that's sort of how we think about it. So you have to have both. The question more specifically about marketing was, and I'll try to do this in the broadest terms, we needed to fundamentally think about how we partnered with our external partners. We had many, many agencies. We essentially consolidated down to one. We partnered primarily with Publicis on consumer marketing. In doing so, it afforded us the opportunity to restructure how we are organized and line up with them. And maybe most importantly, really making sure that we We're giving our partners the license to create very bold and consumer-relevant creative. So the example I would use, again, is GIF, the most recent campaign where we have partnerships with Ludacris and Gunna, both rappers from two different eras. There was a TikTok rap challenge as part of that, which we actually earned $7,000. billion views, which is unbelievable. And it's certainly a record for us as a company in terms of the number of impressions that we made, but also probably a record in a number. I think TikTok gave us, we were in the top 12 most influential campaigns this past year. So clearly, this has been a journey over the last three years. The consumer marketing piece is definitely working, and now with the combination of a more focused and refined sales execution model, the combination of those two things is very powerful and, again, a key to our success.

Great. Thank you so much.

Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to management for any further or closing comments.

Well, first of all, I want to wish everyone a very happy holiday and very happy Thanksgiving this week. Thank you for being with us this week. I know it's a holiday week, and I think the most important thing is just to pause and thank our employees who have truly done yeoman's work managing this company through a tremendous number of challenges and really delivering results. Thank you most of all to our employees, and thank you to our shareholders for your support.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation.