Please stand by. Good afternoon, everyone. Welcome to the Jamieson Wellness conference call to discuss the financial results for the first quarter of 2022. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. Please be advised that the reproduction of this call in whole or in part is not permitted without written authorization from the company. As a reminder, today's call is being recorded. On the call today from management are Mike Pilato, President and Chief Executive Officer, and Christopher Snowden, Chief Financial Officer and Corporate Secretary. Before I turn the call over to Mr. Pilato, please note that a press release covering the company's first quarter financial results was issued this afternoon, and a copy of that press release can be found in the investor relations section on the company's website.
Please note that the prepared remarks, which will follow, contain forward-looking statements, and management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance, and therefore, undue reliance should not be placed upon them. We refer you to all risk factors contained in Jamieson's press release issued this afternoon and in filings with the Canadian Securities Administrators for a more detailed discussion of the factors that could cause actual results to differ materially from those projections and any forward-looking statement. The company undertakes no obligation to publicly correct or update the forward-looking statements made during the presentation to reflect future events or circumstances, except as it may be required under applicable securities laws. Finally, we would like to remind listeners that the company may refer to certain non-IFRS financial measures during this teleconference.
A reconciliation of these non-IFRS financial measures was included in the company's press release issued earlier today. Also, please note that unless otherwise stated, all figures discussed today are in Canadian dollars and are occasionally rounded to the nearest million. I will now turn the conference over to Mr. Pilato to get started. Please go ahead, sir.
Thank you, Sarah, and good afternoon, everyone. Thanks for taking the time to join us today to discuss our first quarter financial results. I'll begin with some high-level comments about our business, a brief overview of our first quarter results, and then I'll turn it over to our CFO, Chris, to go through the financials and guidance in more detail. We had another solid quarter led by revenue growth in Jamieson Brands, reflecting strong demand across our portfolio as consumers continue to seek high-quality brands and innovative solutions to optimize their health and wellness needs. Our strategic growth initiatives remain firmly on track, and I'm very pleased with our ability to drive improved margins and profitability despite significant inflation and other global headwinds. Let me share some additional highlights from our first quarter results.
Total revenue increased by nearly 6% to CAD 104 million, and adjusted EBITDA was up 13% to CAD 21 million. Our domestic branded business remained a key driver with revenue up over 9%, reflecting continued robust demand as evidenced by strong point of purchase activity. We also benefited from timing factors relative to seasonal promotions as well as last year's price increase. China continued to set the pace for our international branded business, where revenues rose 12% on a constant currency basis and 14% on a reported basis. Strategic partners revenue was down 8%, which was slightly better than planned as we cycled a significant increase last year while focusing on a more balanced approach to manufacturing volume more evenly throughout the year.
We had another outstanding quarter from a gross margin standpoint, reflecting operational efficiencies and the strength of our growing global platform. First quarter consolidated gross margin increased 160 basis points on a normalized basis due to the impact of segment mix, along with our focus on optimizing volume growth across our production assets. Looking forward, we are maintaining our outlook for 2022, which reflects current and ongoing supply chain and inflation pressures, as well as anticipated increases to raw material, freight, and labor costs. Our commitment to our mission of becoming the world's most successful and trusted health and wellness company is stronger than ever. Over the past 100 years, we've built a legacy of high-quality, innovative products, creating powerful brands that consumers love and trust.
We have established a leverageable platform to support significant future growth by expanding our market-leading position in the domestic Canadian market, building the strength of our brand in China, and driving growth in other new and existing international markets. We have also laid the groundwork to ensure we grow in a responsible and sustainable manner for people and the planet. Despite our number one rank domestically and steadily outperforming the industry, there is still significant headroom for continued share gains, particularly in several key trending categories like immunity, sleep, stress, and energy that have been growing rapidly. As we look to continue our leadership into the next hundred years, we will continue to invest in our robust science-based innovation pipeline to ensure we are meeting consumers at every step of their health and wellness journey.
Our marketing approach is forward-leaning and deeply rooted in consumer insights, including 360-degree touch points across traditional digital and social media. In China, our reputation for the highest quality products, coupled with a 100-year heritage brand, continues to resonate strongly with consumers. The Chinese vitamin mineral supplement market is growing faster than the rest of the world, and our three-pronged strategy ensures we are well-positioned to continue capitalizing on this major expansion opportunity. We continue to explore opportunities to expand our global presence by entering new markets and supporting the growth of our brands in countries and regions which we already have a presence. While our highly scalable platform presents these opportunities for growth, I'd be remiss not to stress the importance of our foundation. Our world-class team, exceptional production capabilities, and global multi-channel distribution continue to make all of this possible.
In closing, I'd like to reiterate our confidence in our direction and ability to deliver long-term value for shareholders. I'm thankful to our entire team for their hard work, their energy, and their passion for helping to improve the world's health and wellness. Their collective efforts led to another outstanding quarter. With that, I'm going to turn the call over to Chris to discuss the first quarter financial results in more detail. Chris?
Thank you, and good afternoon, everyone. As Mike discussed, consumer demand remained a primary driver in our first quarter results. In the first quarter, revenue increased 5.5% to CAD 103.7 million, driven by continued growth in our Jamieson Brands segment, partially offset by expected lower revenues in our strategic partners business. Top line growth continued to be driven by Jamieson Brands, where revenue increased 9.6% to CAD 83.2 million, including domestic growth of 8.9%, reflecting strong point of purchase sales velocity, the timing of inventory replenishment relative to normal cadence of seasonal promotional activity, and pricing factors.
International revenue for Jamieson Brands increased 12.4% on a constant currency basis, and 13.5% on a reported basis, and continued to be led by growth in China, partially offset by a challenging comparable as we cycled strong non-immunity shipments in a year earlier, having grown by 55% during that period. Strategic partner revenue declined by 8.4% to CAD 20.5 million, reflecting the timing of quarterly shipments versus prior year growth of nearly 52%, which had been impacted by our desire to rebalance manufacturing demand into the first and second quarter, and more evenly throughout the year. As Mike mentioned, we are very pleased with our ability to further expand our gross margin in the face of inflationary challenges.
On a normalized basis, gross profit margin increased by 160 basis points as margin improvements and positive mix factors in the Jamieson Brands segment were partially offset by expected lower margins in the strategic partners business. In the Jamieson Brands segment, normalized gross profit margin improved by 120 basis points to 42.8%, driven by operating efficiencies and leverage stemming from higher volumes, partially offset by elevated supply chain costs as well as the sustained safety measures related to the pandemic. Gross profit margin in the strategic partner segment decreased by 130 basis points to 11.4%, reflecting our planned efforts to normalize quarterly production volumes as well as unfavorable customer mix during the quarter.
Selling, general, and administrative expenses were CAD 21.6 million on a reported basis, an increase of CAD 0.9 million versus last year. On a normalized basis, SG&A was CAD 20.7 million, up 7.4% or CAD 1.4 million versus a year ago, reflecting strategic growth for international expansion and the timing of marketing campaigns associated with our 100-year anniversary. First quarter operating income increased by 44.3% to CAD 15.2 million due to revenue growth, improved gross margins, and lower fixed costs as a percentage of revenue. Operating margin improved by 390 basis points to 14.6%. On a normalized basis, first quarter operating income increased by 28.8%, while operating margins improved by 280 basis points to 15.5%.
Reported EBITDA increased 32.1% to CAD 18.4 million, while adjusted EBITDA increased 13% to CAD 20.9 million, driven by higher volumes and contribution margins. Adjusted EBITDA margin increased by 130 basis points to 20.2%, aided by margin improvements in our Jamieson Brands segment, along with its proportional mix impact. Net earnings increased by 50.8% to CAD 9.7 million due to higher revenue and improved margins. Adjusted net earnings, which excludes specified costs and foreign exchange, increased by 24.4% to CAD 10.7 million. Our earnings per diluted common share was CAD 0.23, and adjusted earnings per diluted common share was CAD 0.26, an increase of 53% and 24% respectively.
A reconciliation of adjusted EBITDA and adjusted net earnings is provided at the end of today's press release announcing the first quarter results. Turning to the balance sheet and cash flow, we generated CAD 17.1 million in cash from operations during the first quarter compared to cash used of CAD 5.1 million in the year earlier period. Cash from operations before working capital considerations of CAD 15.3 million was 28.3% higher due to increased earnings in the quarter. Invested in working capital decreased by CAD 18.8 million, driven by the timing of receivable collection and a slight reduction in our continued acceleration of inventory purchases. Accelerated inventory purchases will scale back throughout 2022 as supply chain risk and lead times are expected to normalize throughout the year.
Capital expenditures during the first quarter were CAD 3.5 million, mostly related to investments in manufacturing and packaging to continue to expand our capacity. We distributed approximately CAD 6.1 million in dividends during the first quarter. We ended the quarter with CAD 140.4 million in cash and available operating lines, and net debt of CAD 134.6 million. Based on our strong cash flow position and earnings growth, today, we have announced a dividend of CAD 0.15 per common share for upcoming quarterly distribution. Now, turning to guidance.
We are maintaining our initial outlook for fiscal 2022 that we shared with you in the fourth quarter conference call, which includes the following. Net revenue in the range of CAD 474 million and CAD 491 million, representing top line growth of between 5%-9% versus 2021. Adjusted EBITDA in the range of CAD 108 million-CAD 112 million or 8%-12% growth over 2021. Adjusted earnings per fully diluted common share of between CAD 1.42 and CAD 1.48, representing approximately 8%-12% growth compared to 2021. Let me share some additional perspective on second quarter specifically. We anticipate overall branded revenue to increase by approximately 3%-6% in the second quarter.
This represents a 3%-6% growth in our Jamieson brands domestically based on the timing of promotional activity and shipments made earlier in the year at approximately 5% growth internationally on a reported basis, reflecting the normalization of order fulfillment versus the prior year. Strategic partners revenue is expected to decline by up to 10% in the second quarter due to order timing and rebalancing factors impacting the second quarter in the prior year. We anticipate normalized SG&A expenses to increase by approximately 5% in the second quarter at the low end of our guided range for the full year. A complete discussion of our outlook and factors impacting our expected performance in 2022 is included in the outlook section of our MD&A that was filed today. In closing, I would like to thank the entire Jamieson team for their efforts.
Our 100 years is off to a strong start, and I appreciate their hard work, and we look forward to 100 more successful years. With that, let me turn the call back to our operator, Sarah, for Q&A.
Thank you. If you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question, and we'll pause for just a moment. Our first question will come from John Zamparo with CIBC.
Thank you. Good afternoon. I wanted to start with a question we're asking basically every consumer company, and that's about consumer behavior. You've referenced in the past the access to data that Jamieson has through your retail partners and also your e-commerce business. I'm wondering what you can share about what consumers are doing, whether it's trading down or leveraging promotions more frequently or anything along those lines.
Yeah. Thanks, John, for the question. You know, in our category and in our business, we haven't seen any major shift in Q1 to what we were seeing over the last couple years. We saw continued growth. We saw consumers continue to be highly engaged in the category. We continue to see growth off of what we've been calling the new baseline of consumers, and we continue to see elevated usage in the category. We saw growth across pretty much all the channels. We did see a little bit of shifting, I would say, from e-commerce back into brick-and-mortar as you know, regions and provinces and parts of the world have reopened.
We continue to see growth in those channels including e-commerce, just at a lower rate than what we've seen in the past, with that volume shifting back to brick-and-mortar channels.
Okay. That's helpful. Thanks. My follow-up is on the Chinese business. You called out as a source of strength for Q1. I'm curious what, if any, impact you've seen from lockdown situations in China. Given the strength in Q1, is China and maybe uncertainty related to it a reason that gives you pause to be more aggressive on the full-year guide?
Well, Q1 results continue to sell through. Obviously at the end of the first quarter, there was the lockdown in Shanghai and across many geographies. That included an interruption of e-commerce services. Our understanding is that is virtually all back in place now. We don't expect that to impact our overall guidance or velocity in that region in fiscal 2022.
Okay, understood. I'll pass it on. Thank you.
Thank you.
Our next question will come from George Doumet with Scotiabank.
Yeah. Hi, guys. Good afternoon. Of the brand revenue growth, can you maybe comment how much of that was price versus volume? Are we comfortable with the price we took last year or are we gonna need to take more this year to offset some of these additional costs incurred?
Yeah. Thanks, George, for the question. We did see some good growth in our branded business and in our domestic business. A very small part of that in Q1 would have been lapping a price increase a year ago. We priced somewhere in the middle of the quarter of Q1 year ago, so it was a little bit of lapping. Most of that growth that you saw was actually consumer engagement, consumer demand and POS sales through the different channels and accounts. Very little in pricing. As we talked about last quarter, our strategy is always to price to recover longer-term cost increases. We talked about last quarter how we are pricing again in 2022.
We have passed on pricing across our strategic partners business and across our international business at the early part of 2022, and there is pricing planned in the back half of 2022 on our domestic business to offset rising costs, and that's how we're holding our guidance where it is. That was built in last quarter. It's built in continually to maintain our guidance at this point.
Great. Appreciate that. Can you give us some color on how immunity related products from a volume standpoint performed this quarter maybe versus last and maybe versus, I guess, your expectations?
Immunity products have just continued to show resilience through all of these ups and downs and waves of the pandemic. We continued to see strong growth in our business in immunity when we look at Vitamin C and Vitamin D in Q1, and also continued growth at a category level. We outpaced that category level growth, but we did see growth in immunity. It's one of the things that has been just amazing to see through the pandemic is early on, immunity took off, and all the way through the pandemic, it's continued to remain quite resilient in its growth. Hit a little bit of a blip year ago as we were comping the 2020 panic buying period of about eight weeks.
It was a very short-term decline off of a very big comp, and when we got past those eight weeks, it continued to grow, and it continued to grow into Q1 of this year.
Great. That's helpful and it's encouraging. I've got one more. Compared to when we last spoke in March, just wondering if sourcing raw materials from Asia, has that been the same, has that been easier, or has that been harder?
As we've mentioned before, we contract the vast majority of our raw material purchases in the fourth quarter at the beginning of the year. We are operating under the same cost environment for raw materials. The one area where we are receiving pressure, which continues to be included in our guidance, is really around transportation costs, which is not part of that contract that we fix from a supplier perspective. We would see pressure on freight in and freight out, you know, and all of that has been built in and continues to be built into our guidance to date.
Great. Thanks, guys.
Thank you.
Thank you.
Our next question comes from Derek Lessard with TD Securities.
Yeah, good afternoon, everybody. I have a question, maybe touch a bit on the guidance and more specifically on international revenue growth. You know, it was up 12%-13% in Q1. You're guiding to 5% in Q2. Maybe just help me or us bridge the gap with the 20% you're expecting full year and what looks like is gonna be a really strong second half for you then.
Yeah. It really relates to how 2021 deliveries reflected the availability of stock and the fact that at the beginning of 2021, we shipped a lot of products outside of when the consumer would otherwise take the product. The shipment cycle and the consumption cycle became mismatched. What you're seeing in 2022 is that cycle line up again, with deliveries in Q1 and Q2 focusing through that 618 promotional cycle. Deliveries in Q3 and Q4 are really lifting for Singles' Day and consumption through the holidays and Chinese New Year early in 2023.
Okay, that's helpful. One final one for me is just wondering if you can maybe add some color to the, I mean, obviously a very strong margin performance and maybe an expectation against the inflationary backdrop. I know it's a little bit of a different business, but we did see Herbalife yesterday say they got blindsided by inflation and the pandemic. Just wondering what's different with your outlook.
Just going back to the beginning, we lock in all of our prices in Q3 and Q4. That sets us up well to understand when costs will hit us. Entering 2022, we had very high inventory levels of raw materials. All of those raw materials have now been converted to finished goods and are essentially allowing us to delay pricing in the domestic market while meeting the impact of those cost increases throughout fiscal 2022. That allows all of the operational improvements and the scaling back of the pandemic to improve operational efficiency, and that is what is driving increases from a gross profit and margin activity. In addition to that, we did have some favorable mix from a category participation perspective in the first quarter.
Ultimately, that is allowing us to guide to that 100 basis points margin improvement for fiscal 2022.
Yeah, the one more thing I would just add to that, Derek, is in the last few years, we have invested in our procurement team. We have invested both in number of resources and also the talent that we have on that procurement team. We are watching costs every minute of every day and forecasting, talking to our suppliers, seeing what's going on out there, engaging in more robust negotiations than ever. I think you're seeing that both in our results and our guidance, the guidance here today and in the last few quarters.
Thanks for that. Very helpful.
Our next question will come from Endri Leno with National Bank.
Oh, hey, good evening. Thanks for taking my questions. The first one, you guys mentioned that you're seeing strength across the channels. I was wondering if you can talk a bit about product categories. Did any one of them stand out versus the other? I mean, apart from the immunity that you talked, but yeah, anything that stood out?
Sorry, Endri, you cut up a little bit. Were you asking from a channel perspective or a category perspective?
Oh, category perspective.
Oh, okay. Category perspective. You know, we saw, again, continued strength across the board. We see continued growth and strength. I talked about it a minute ago on George's question. We see continued strength around immunity. We see continued strength around energy, stress, and sleep. As we talked about before, the category of Beauty or Beauty from Within continues to show strength. The trends we've talked about over the last, call it four, five, six quarters through the pandemic, continue to remain strong. The same categories are trending, and we've been innovating behind those categories as they continue to trend.
Okay. No, thank you. That leads to my other question, Mike, 'cause you mentioned those categories as potential for expanding share. I mean, the first part of the question is, have they been growing faster? I mean, have they been growing faster than your sales? What product innovation are you planning for those, if you can share?
I mean, we are the clear market leader in Canada across the board when it comes to the entire category. There are subcategories in there where either our shared leadership position is not as strong in others or where we actually are not the share leader, we're the number two player. We continue to innovate in these categories that are trending and growing to grow our share in them. You'll see innovation from us in 2022 across immunity with some more Vitamin D innovations. You'll see a lot of innovation around fun and delicious. For example, in Vitamin D, we have a new extra strength chew, we have a new extra strength gummy, and really continuing to grow in that immunity space.
We continue to see some products around Elderberry, cold and flu immunity with that ingredient, again in some gummy format. Also sleep with some new Melatonin coming out, from an innovation perspective. Under our Progressive brand, we have a new flavor of collagen. A lot of our innovations are lined up around those trends, that I talked about a moment ago, and those are opportunities for us to continue to outpace the market in those subcategories and pick up share as we continue to grow across the country.
Yeah. No, that's great. One last for me. You called out China's particular strength internationally. Can you talk a bit about the other countries? I mean, did you see strength in any other one or were they more or less as expected?
Other markets. Yeah, I'll take it, Endri. We saw strength across a variety of countries for sure. China definitely was leading the growth for us in Q1, continues to be a very strong strategic focus for us. I would say we saw a little bit of softening in Eastern Europe. Obviously, there's a war going on in Eastern Europe. It impacts. We don't do business in Ukraine or Russia, but it does impact the surrounding countries. We're keeping a close eye on our business in Eastern Europe and making sure that we're supporting them in every way we can. We did see strong growth across a few different places. One to note is the Caribbean. We continue to see strong growth in that market.
A couple of countries in Asia, and most notably China.
Yeah, the Middle East.
The Middle East. Yeah.
It's really about comping last year because last year's growth was, you know, more than 50%. That's where Q1 becomes a tough quarter to call.
Yeah. Okay. No, that's good color. Thanks, guys. Good quarter. Thank you.
Thank you.
Our next question will come from Ty Collin with Eight Capital.
Hey, guys. Thanks for taking my question. I know you're constantly testing out the elasticity of customer demand when you're looking at putting through pricing. I'm wondering, have you seen any more resistance from customers over the past couple of months, given the rise in cost of living that would give some pause about the pricing you're planning to put through this summer?
We have not seen any indication of any change in velocity around any of the price increases we put through to date, Ty, and we don't anticipate any in the next round. Our pricing elasticity models are pretty robust. We are selective in where and how we price based on these elasticity models. We have confidence in them. Traditionally and historically, you don't see a big change in velocity or in consumption on our products in a downturn or inflationary period. It is quite resilient. We are a pretty small part of the basket. In most consumers' mind, we would not be considered a discretionary category. In most consumers' lives, they are looking for high quality vitamins, minerals, and supplement.
It's why we're such a leader, and they're not looking to trade down on mass.
What I can tell you is we haven't seen it historically, but we are monitoring it regularly and keeping a very close eye on it and seeing where this market goes in the environment, the economic environment that it's in today.
Got it. That's a great color in this.
The other thing I would add to that as well, just on the side, is while we're taking pricing, so are our competitors. It's not just us pricing in a market in this inflationary period. Our competitors are also taking pricing. The price gaps that you would have seen pre-pandemic are remaining relatively stable.
Okay, thanks. That's great color. Just switching gears, could you provide us with an update on the M&A landscape today, whether you're seeing any movement on valuations or competition since we last spoke, and maybe whether you're getting any closer to doing a deal in the U.S.?
We continue to assess opportunities. Certainly, I think multiples have come down. As the public markets have come down, so do expectations of both PE and privately owned organizations. As you know, we're very fiscally disciplined, and we will only transact in a way that allows us to achieve the IRR that we set out from a target perspective. When we have news, we will certainly share it. Yeah, multiples are certainly becoming more affordable given the current environment.
Got it. Thanks, guys.
Once again, if you'd like to ask a question, please press star one. We'll now take a question from Sabahat Khan with RBC Capital Markets.
Hi. Great. Thanks, and good afternoon. Just I guess a follow-up. We had this discussion at the last quarterly call around working capital for this year. Looks like the year started off sort of slightly positive. What is your updated expectations on working capital for 2022, given sort of where the backdrop is on inflation and some of the other things you talked about earlier?
Yeah. We expect to still spend kind of low double digits working capital for total fiscal 2022. We will continue to maintain high inventory levels while the supply chain risk exists, and we don't expect that to subside until later in 2023.
Okay. Just some of the commentary earlier around China, is that sort of, you know, the way you're going at this point and after kind of years of a push in there? You know, is it still sort of are you still introducing new categories? Do you feel like the product offering or the mix of products you have in the market is set and now it's about just more velocity and things like that? Where would you say sort of the portfolio mix or your offering in China is relative to where you want it to be?
When we talked at the end of fiscal 2021, we talked about key priorities in China as one, take advantage of the velocity of cross-border e-commerce in China. That includes, you know, growing faster than market based on promotional awareness and incremental marketing from a Jamieson perspective. It also includes taking innovation that Mike talked about for the Canadian market and bringing that to China through the cross-border e-commerce market. It includes growing in club as one of our major club customers doubled their footprint at the end of fiscal 2021, which will certainly provide a lift to that business in 2022, as well as continuing to expand in the retail space with our market-leading registrations and our available SKUs in market. All of those are parts of the pie.
We're just managing obviously the environment as COVID is now taking grip in China and managing through those issues.
Yeah. Just a little bit of context on it globally, Sabahat. There's not a market in the world where we will say, "Hey, we're done. We have the portfolio we want." In this category, it is a category made up of many subcategories, many SKUs. Innovation is important. The consumer needs are always changing. There's going to be a lot of opportunity coming out of our portfolio here into Canada into lots of markets we play in, and we'll never sit still on that. Being an innovation, you know, powerhouse like we talk about doesn't just mean here in Canada. It means in all the markets we're in, and we continue to expand and meet consumer needs in the markets where we're growing.
Okay. No, that helps. Then I guess just a more of a housekeeping question. I think in the adjustments, you have a small amount for COVID-related costs. It seems like it might be, I think, maybe overtime expenses. Can you just talk about what drove that and, you know, does that eventually phase out over the course of 2022, those the overtime adjustments as restrictions come off?
That was right when Omicron hit at the beginning of January. We had some, you know, some incremental pay as it related to keeping the, you know, absenteeism at bay and velocity and efficiencies running in our plant. That subsequently ended. Obviously, if the environment continues to improve, you will see no more COVID costs in our P&L.
Okay. Just one last one, if I could sneak it in. It sounds like or it seems like there's a, I guess, a supply chain system implementation that was, I think, referenced in the adjustment. Is this sort of like a multi-year one? Can you maybe give some timeframe on that and how you know, is it just gonna be. Is it, is this kind of the, I guess, the system implementation or the kind of which cycle are we at, and what should we expect for the next couple of years in terms of these adjustments?
We are going to have a few years of broad system improvements. In fiscal 2022, we're focusing specifically on the supply chain aspect of our system. That will be virtually done by the end of fiscal 2022.
It's just the nature of that system that requires those costs to be expensed versus capitalized. As we guided capital expenditures and system improvements through our fiscal year end, we naturally included those costs in capital. Doing the analysis, it's unfortunate that those costs are gonna have to go through the P&L. We will add them back, as they do not pertain specifically to this year's results.
Okay. Would that be the delta between sort of your CapEx of 15-20 versus, I guess, 15 now?
That's correct.
Okay. Thank you.
Thank you.
Our next question will come from Justin Keywood with Stifel GMP.
Hi, good afternoon. Thanks for taking my question. I had a question on the consumer demographic mix recently, and if there's been any change. As I understood, there was many new younger consumers that were trying Jamieson for the first time earlier in the pandemic and possibly setting up for greater lifetime value, and if that dynamic is still occurring.
Yeah, thanks, Justin. I mean, we continue to see strong growth off of this new elevated baseline that we built over COVID, continue to see accelerated adoption of the category into consumers' lives. When COVID really hit two years ago, we saw, you know, an influx of new consumers, and what we talked about was a younger demographic was coming into our brand for the first time. Throughout the COVID period and into Q1 of this year, the growth on top of growth, quarter after quarter, we continue to see these new consumers, you know, at a very high percentage en masse stay in our brand, stay in the category and continue to expand their usage. That would include all the age demographics that entered, and we're quite confident that they're with us for the long term.
Thank you for taking my question.
Thank you.
We'll now hear from Peter Sklar with BMO Capital Markets.
Mike, in your commentary, I think you talked about a category called Beauty from Within. Did I hear you correctly, and what is that?
Yeah. We've talked about it over the course of the pandemic, as it's really started to trend. It's Beauty from Within. It's really products that deal with hair, nails and skin. You know, like collagen, for example, would be a great example of that. Biotin. Products that really work from the inside to impact things that are external, like your hair, nails and skin. We've seen growth on that throughout. We saw growth pre-pandemic. We saw it accelerate through the pandemic. When I was asked the question what we saw grow in Q1, that was one of the categories that continued to grow.
Okay. Next, I just wanted to go back on this discussion of potential trade down, that which you're indicating you haven't seen any yet. Just kind of thinking out loud here, let's say just inflation goes crazy, and we go into a recession, you know, because the, you know, central banks are tightening and, you know, consumers really under a lot of pressure because of higher interest rates and, you know, runaway inflation. Like, do you ever worry about that? Because I think of Jamieson, I think you agree, as a premium brand. Have you ever thought about that you like you need a different discount brand to take that part of the market and to potentially, you know, to defend in case there is some trade down that comes up in the future?
Yeah. We definitely think about it. I mean, we definitely keep an eye on what's going on in the marketplace and think about, you know, what would we need to do if something were to come true that is not within our hypothesis or within our history. We do believe, though, when we look at historical data or we look at what's been going on over the last year, that we do not have a high risk of trade down. Really, there's a few reasons why. We're not a discretionary category. It's not a category that consumers typically shop on price. They typically look at value more from a quality perspective. It's one of the reasons why in our category, control label or private label is not really highly indexed.
It's a lower share of a category than you see in more discretionary categories or in other categories across the store. Consumers typically look at quality as value, and we're known as quality. The second thing I would say is, as consumers make choices on what they're going to change in their consumption behavior in a time like this, our category is quite far down the list in terms of what they're willing to make changes on or trade down on because they believe that with price, and which is true, with price comes a lower quality, and they really want quality. That's at play. We don't look at launching a discount brand. Our brand stands for quality. It stands for a premium mainstream price for the mainstream consumer.
We do always have the tool to increase promotions. We have the tool to increase our investment in the brand, to change the way we invest in the brand to drive growth if we have to. At this time, we don't see the need to do that. We don't see a material risk in front of us. As I said earlier, we monitor it regularly. We're watching it closely. Consumers always do with our brand as being an omni-channel brand, being everywhere. They also have the opportunity to change channels. They can change to a channel where maybe they get a better value per dose.
They can change to a channel where maybe they can get a product for a lesser dollar amount with less doses on it if they're more concerned about cash flow. We might see some channel shifting as we go. As we've talked about before, we're relatively margin agnostic from a channel-to-channel perspective, and we feel pretty good about the guidance that we've given.
Okay. Understand that. Just lastly, Chris, I believe all your labor is organized, and I'm just wondering, like, when your major agreements come up for negotiation.
There's two facilities in Windsor that operate under a collective bargaining agreement. They come due in 2023.
Oh, okay.
Within a couple of years, yeah.
What about the one in Scarborough? Is that?
Sorry.
Yeah.
Beginning of 2024. The end of 2023.
Okay. Don't you have a facility in Scarborough? Is that closed?
No. Yeah. The Scarborough facility is not, it is not a unionized facility.
Okay. Okay, great. Thanks.
Thank you.
We have no further questions cued at this time. I'd like to turn the conference over to Mr. Pilato for any additional or closing remarks.
Perfect. Thank you, Sarah. Thank you to everyone for joining tonight. We appreciate your attendance. We appreciate your ongoing support. Have a great evening. We'll talk to you all soon. Bye-bye.
That does conclude today's conference. Once again, thanks everyone for joining us. You may now disconnect.