So happy to have Tracey Travis with us today, Executive Vice President and Chief Financial Officer of Estée Lauder. I just want to also remind everyone to please refer to the slide being presented for Estée, in terms of the statement regarding forward-looking statements and non-GAAP disclosures.
Above me.
So, Tracey, thank you so much for being here. You know, and with your pending retirement, I wanted to get started on kind of a take a step back and reflect kind of question.
Mm-hmm.
So you've been CFO at Estée Lauder for over 12 years, and so much has changed, both at the company and in the industry since that time. Could you maybe share some perspective on some of the changes, these changes, and one or two things that you think one should be aware of as we think about structural drivers of the prestige beauty market over the next decade?
Yeah, no, great, great question. Thank you, Lauren, and it's always great to be here at this conference, back to school time. You know, one of the things that hasn't changed is prestige beauty is still a very desirable category. You know, it's still grown quite, quite strong over the last several years, grown faster than mass, and so that's one of the things that hasn't changed. And increasingly, consumers are even more engaged in the category. That has certainly attracted not only a lot of new consumers, but also a lot of competitors. And so one of the things that has changed is the competitive environment has changed. Barriers to entry have lowered, and so there are more competitors in the category.
That certainly does allow for consumers to have more choice, but it also creates, obviously, more competition for, you know, for the larger beauty players that have been in the category for some time. It's also because it is such an attractive category, the channels have expanded as well, so there are more channels carrying prestige beauty. Important for us to expand our channel distribution, which we have been doing, and will continue to do as consumers increasingly look for prestige beauty in whether it's specialty multi or pharmacy or online. The other thing that has changed, you're seeing consumers, and certainly enabled by the internet, be more informed.
And so they, you know, are informing themselves on trends that they're interested in, benefits that they're interested in, ingredients that they're interested in or not interested in. So the consumer has become far more discerning because there's more information available to them. So it's important for us as well as a company to make sure we, too, are informed in terms of what consumers are interested in, and making sure our innovation programs are meeting the consumer with what they're interested in, and actually influencing, obviously, the consumer in terms of what they, you know, what they might be interested in in the future, and that's certainly a focus of ours as well.
And then I would say the other change, again, enabled by technology, is just how the consumer is researching products, and what they're interested in. You know, they are increasingly researching products online, you know, whether it's on social media, or on the internet. And so when they come to a store, or shop online, they're very well informed in terms of what they're looking for. It's very important for us to be able to activate and capture the consumer's interest online, before they actually come to purchase. And so that's changed the marketing model and the media mix, quite dramatically over the last 10 years.
When I think about, you know, when I started at Estée Lauder versus today, there's been just dramatic change in terms of the informed consumer, the ways to reach that consumer and the channels that that consumer is shopping in.
Okay, great. I have to go short term.
Mm-hmm.
So we started long term. We'll go short term. So we have to touch base on the fiscal 2025 guidance. So first I was hoping if you could just discuss the components that are driving sales growth in 2025-
Mm-hmm
Given the headwinds you've discussed in China and travel retail, and maybe walk us through where you're expecting to see strength.
Yeah. So the guidance that we provided for this year, I think everyone is aware, is -1% to +2% in terms of our net sales growth for the year. You know, and that follows a couple of years of sales declines as we were destocking the trade last year, and so had the impact of that and some of the disruptions from the pandemic we experienced in China and Asia travel retail over the last couple of years.
You know, as we certainly look at what we experienced last year and even, you know, towards the end of our last fiscal year, starting this fiscal year, you know, we're still seeing softness in demand in terms of China and travel retail, which, you know, is heavily dependent on the Chinese traveling consumer. And so as we looked at this fiscal year, at the start of the year at least, we're not seeing that catalyst to change the trend. And so our guidance reflected that in terms of our full year guidance. What we see in other markets, however, is growth.
And so, you know, when we look at, you know, our European market, excluding travel retail, EMEA includes our travel retail business, as you know, or we look at our APAC market, excluding Mainland China, we do see growth in markets like Japan, in our emerging markets. In North America, we're expecting growth given some of the actions that we've taken in North America. And that's, you know, the combination of the declines, which we expect in China and travel retail, and the growth we're seeing in other markets are really what is the composition of our guidance for the year. You know, obviously, first quarter being a little bit weaker, and progressing marginally through the balance of the year.
Okay. And just on Q1, is it fair to say the key reason for the top-line guide below market growth is because of destocking in Asia travel retail in the first quarter? And, like, what - if that's the case -
Mm-hmm.
Could that persist into the second quarter?
Yeah. Yeah, so what we spoke about on the call a couple of weeks ago now is the fact that, you know, we actually saw a softening towards the end of the fiscal year, particularly in Hainan. Quite a surprise to us and to our retailers and others as it relates to Hainan. So, especially given what we were anniversaring in Hainan. So it's been a bit. The traffic pattern and the conversion pattern has been a bit erratic. And so, you know, we did end with inventory a bit higher than what we had initially targeted.
So yes, in Q1, we are expecting to do some destocking and pull back on our shipments for Hainan and a couple of other areas within Asia, to make sure we maintain the right inventory levels throughout the year, which is very important, very important for us. We're also seeing weakness, as we spoke about on the call, in China as well. So those are the two areas that are impacting most strongly our fiscal Q1 guidance.
Okay. And then for 2Q, like, is that something we should be mindful of, a risk of further inventory destocking in 2Q?
It really depends on retail trends.
Okay.
So if retail trends pick up, then you know, we won't see that. But if they don't, then we will.
Got it.
And so again, the retail trends have been a bit difficult to predict. You know, we'll see in one month a pickup in retail, and then the next month we'll see, you know, a down forty.
Yeah.
I mean, the magnitude of the differences month to month have been, you know, a bit difficult for us to manage, especially given the supply chain that we have.
Yeah. Okay. Let me just move on to margin build, so sticking with the-
Mm-hmm
... the 2025 conversation. So just curious to walk through puts and takes that drive the expansion of adjusted operating margin from 10.2 in fiscal 2024 to the 11-11.5 percent-
Mm-hmm
Outlook for 2025. And just in particular, things I'm interested in are like the PR, now named PRGP.
Mm-hmm
-mix reinvestment. It's kind of those key moving pieces.
Yeah. So the bulk of the margin expansion we expect to get in fiscal 2025, when you think about the top-line guidance that we've given, which is, you know, on average, midpoint flat-ish, is from the PRGP. And so, you know, we started taking actions, certainly given the soft volume performance we've had over the last couple of years, pretty aggressively at the beginning of last fiscal year to pull back on inventory, pull back on our production, so that in fiscal 2025, we could realize benefits in our gross margin. Where we've seen the biggest hit over the last few years has been in our gross margin. And so, you know, if you look at our 10-Q or our 10-K, you can see the increase we've seen in obsolescence and discounts, et cetera.
So we're expecting improvements in those areas based on some of the actions that we've taken, you know, under the PRGP to, you know, more dramatically pull back in some areas. You know, we've taken pricing a bit in excess of inflation, so we're expecting more of that to flow through to the bottom line.
Mm-hmm
... with less discounts, given a better inventory position that we have, both in-house as well as in the bulk of our trade, and some other actions that we've taken on freight and other material costs. Most of the PRGP benefits this year will impact positively our gross profit margin. You know, we also announced that we're executing against a restructuring program. Some of those benefits will flow into this year. More of those benefits will flow into next year. The PRGP, I'm gonna call it, not the Profit Recovery Growth Program, the PRGP.
The net benefits that we expect to realize, $1.1-$1.4 billion over a two-year time horizon, much of that will come in gross margin this year, and a bit more evenly split next year between gross profit and operating expenses. At least that's what we expect at this point in time. But because of the composition of the PRGP, it is volume dependent. And so when you think about some of the savings that we're expecting in obsolescence, some of the savings we're expecting in discounts, et cetera, the cost savings are, you know, are irrespective of volume, but certainly the, you know, the other savings in gross margin will be somewhat dependent on volume, so.
Okay. And so, knowing that the guidance, like you said, the midpoint is roughly flat.
Mm-hmm
is the assumption that volume is down slightly for the year?
It's a range.
It's a range.
It, it-
Okay
... it will be depending on, you know, in particular, depending on what happens in our eastern markets, it can be anywhere between minus one and plus two.
Okay. Okay, but that fits in with the PRGP-
Mm-hmm
-net benefit?
It does.
Okay.
Yep.
Great. Let's switch gears and focus more specifically on China.
Mm-hmm.
I know you've mentioned a few times already, but, now that we've got the Chinese consumer traveling outside of China, how should we think about the growth of the Chinese consumer, or growth from the Chinese consumer, I should say, globally?
Mm-hmm
Over the next year and beyond? Because on the call, I feel like there was a change in tone on the potential for growth within Mainland China.
Mm-hmm
over the medium term
Mm-hmm
-versus maybe what you've spoken to before, so mid-single digit range. And when I think about the 10-Year Compass, like, how does that adjust?... if China looks more like a developed market in terms of that longer-term growth algorithm?
Yeah, no, it's a great question. I think you know we did say that you know we would expect to be able to return to more mid-single growth if China stabilizes and returns to growth. And the growth that we would expect to see in China is more in the mid-single digit range. So yes, China is based on all of the information that we've seen and certainly some of the macro information that that has come out with you know with you know what's happening in terms of the aging of the consumer, et cetera, which is an opportunity.
But we would expect that China would not grow and return to double-digit growth, which it was pre-pandemic, but be more in a mature market growth range of, you know, 5%-6%, once it stabilizes and returns to growth. That's still very good growth.
Mm-hmm.
and we see our other mature markets, I mean, the North America market, which I'm sure we'll talk about, was growing double digits at the beginning of our fiscal year.
Right.
So mature markets can grow fast. But by and large, they tend to grow, you know, along with the average of prestige beauty that we've seen over the last several years, which has been more in the 5%-6% range. So we would expect that China would be able to return at least to that level of growth.
Okay. And is that what you'd say for the Chinese consumer globally? We should think about the whole cohort as kind of a mid-single digit range-
Yeah
once stabilized?
Yeah, I mean, I think. You know, I believe the number of Chinese consumers now that have passports that actually can shop globally is, you know, north of 10%, but below 15%, so somewhere in the 10% to 15% range. So 85% are still shopping in Mainland China or in, you know, Hainan travel retail, or other areas within China in terms of, in terms of more domestic travel retail. Our distribution in China, particularly across online platforms, is shopping more domestically.
Mm-hmm.
We're seeing less shopping, other than in markets where there's a, you know, a currency benefit, like Japan for the moment. But by and large, the consumer is shopping more domestically, including in the travel retail channel domestically, and less shopping, you know, in, you know, in some of their overseas trips. So we are seeing lower conversion on some of those trips. Now, that may be a post-pandemic phenomena because we're seeing, and we saw this with other groups that, you know, once the pandemic restrictions were lifted and people started traveling more, they were spending more on experiences and dining, and less on consumer goods.
And so we're certainly seeing that even with Chinese consumers that are back to traveling now, other than, you know, when there's a very, you know, big price advantage.
Okay, great. And then over the past year, you've been working to improve the brand equity of the Estée Lauder franchise within luxury skincare in China.
Mm-hmm
with Re-Nutriv. So could you just talk about how this has gone versus expectations? You know, like, how big is the Re-Nutriv opportunity in China?
It's very big. We're very excited about Re-Nutriv and some of the early indications we've had from some of the new launches that we've had in Re-Nutriv. You know, the Estée Lauder brand is still a very well-regarded brand. All of the brand equity studies that we have done in China shows that, you know, Estée Lauder is still a very well-respected brand. Advanced Night Repair, obviously, is, you know, the leading franchise for Estée Lauder in, you know, in China. But Re-Nutriv has been growing, and we launched a new product in the second half of last year that's doing incredibly well. What we're seeing right now in China is a bit of a bifurcation in the market. Luxury skincare, you know, La Mer continues to do quite well.
Luxury skincare is doing incredibly well. Luxury fragrances are doing well, and obviously, you know, we've launched and expanded our Le Labo franchise, and Tom Ford and Jo Malone also have great promise, along with Frédéric Malle and Kilian, and then luxury makeup also is doing incredibly well, so Re-Nutriv, the early signs are great. We actually, even in a down market in the fourth quarter, gained share in skincare in China, and that was very much attributable to Estée Lauder and La Mer in terms of the new franchises, the new products that we've launched with those two brands.
Okay, great. Let's talk about emerging markets. So the focused emerging markets have been growing much faster than the corporate average, but I think they're still less than 10% of sales?
Around 10%.
Around 10, okay.
Mm-hmm.
So I'm curious, like, which markets are of a particular focus, and how do you think about executing a strategy to grow these markets relative to the playbook that you had pursued in China?
Mm-hmm.
I was also curious, how do you think about the impact to profitability of these smaller markets, fast growth, but smaller markets?
Yeah. Yeah, no, we're fortunate that we have a broad brand portfolio, and we have a playbook that's worked pretty well for us in terms of growing our emerging markets. So I'll start by saying our emerging markets are profitable and, in many cases, more profitable than some of our mature markets because there's less brick-and-mortar distribution or, you know, so there's less lower productive brick-and-mortar distribution than perhaps in some of our more mature markets. It allows us to build the market with the brands that are, you know, really attractive, and the categories that are really attractive in that particular market. So you know, take a market like India, which is one of our, you know, top emerging markets that we are focused on. India is very much a makeup market...
MAC does incredibly well in India. We typically have used some of our entry price point brands, i.e., MAC, Clinique, now The Ordinary, to recruit consumers from mass to prestige. India is still a large mass market, but, you know, prestige is growing faster than mass. We partner with local consumers in the market to build the distribution, and so, you know, we are very much focused on anchoring with a brick-and-mortar point of distribution or points of distribution, but really, taking advantage of online, whether it's pure play or retailers that have an online presence to reach a broader array of consumers. And that, in China, allowed us to actually place brick-and-mortar distribution where we saw the biggest demand for the brands that had the most appeal.
And we're following that same playbook in other emerging markets as well. You know, we're focused on Mexico. Mexico is a great market for us in Latin America, Brazil. In EMEA, in addition to India, the Middle East, Turkey, are areas that are focuses for us. South Africa continues to be a focus for us as well. And then Southeast Asia, you know, markets like Malaysia and Indonesia and Thailand are all markets that, you know, have shown incredible promise for us. Some of them are largely skincare markets, some are more makeup markets, some are fragrance markets.
And so, depending on what the dominant category is in that market, we'll, you know, use our playbook in terms of our brand portfolio to enter the market and then build up from there, so.
Okay, great. Let's turn to your home market.
Mm-hmm.
Sorry about that. You knew we would talk about.
I knew it was coming. Yes, yes, yep.
So last August, Fabrizio talked about a turnaround plan for North America, and we spent a lot of time talking about it here at the conference. But growth has been subpar, and I know you referenced the beginning of the year-
Mm-hmm.
It was quite strong.
Mm-hmm.
But last quarter was down 5%.
Mm-hmm.
So just, you know, you've been working to lean in on the derma trend, you've added the brands on Amazon, you've launched on TikTok Shop. So I guess, what does it take to return to sustainable revenue growth and grow in line with the market? Because it feels like it's been fits and starts.
Yeah. Yeah, no, when I said it, it started quite strong. I was talking about the market. And we've done an awful lot in North America, to your point, Lauren, over the last couple of years, to really expand our distribution to areas that, you know, represented faster growth in terms of distribution expansion. And, you know, that culminated in, towards the end of the year, launching, you know, Clinique and a couple of other brands on the Amazon platform. You know, what we're seeing in the U.S. is increasingly, you know, faster growth in specialty multi-channels like Ulta and Sephora and, you know, Ulta inside Target and Sephora inside Kohl's.
Online is a very fast growth channel, and that includes Amazon, now that they've stood up their, you know, prestige beauty platform, which we are participating on, and the other thing that we're focused on is we look at what benefits consumers are looking for and what categories consumers are most interested in in the U.S. You know, derma is a category that really has been a category that Clinique basically launched, you know, first in terms of their positioning. They developed a lot of their initial products with dermatologists. So they are the, you know, the OG, if you will, of derma brands, and had lost that positioning a bit, and so recaptured that positioning.
And Clinique is, you know, doing that not only for skincare, but also having some success in terms of their makeup in, you know, in North America. So, you know, we talked about a couple of weeks ago, our strategy reset, and it's really the reset for global, but certainly has implications in North America as well. And that's really reigniting skincare. And so, you know, in particular, in North America, I would say, you know, we have focused more on makeup and fragrance and a bit less on skincare. You know, Estée Lauder has opportunities in North America. The, you know, The Ordinary is doing incredibly well in North America.
Clinique, now that, you know, we've expanded the distribution on Amazon and repositioned it, you know, is starting to gain a bit of share in skincare in North America as well. And so we're very much focused on that opportunity in North America, with the, you know, right channels of distribution and the right positioning. You know, the second is fragrance. And so fragrance continues to represent a great opportunity, and our fragrance brands have done incredibly well. Jo Malone, Le Labo, Tom Ford, and we just launched Balmain, which we're very excited about as well. Small, but will grow over time as we grow the Tom Ford brand over time. And so we're excited about that, along with our other fragrance brands.
So that's a big focus for us globally, and certainly, that has opportunity in North America as well. You know, making sure we're in the right distribution channels, the faster-growing distribution channels. We've seen the consumer shift preferences, particularly as you think about, we were talking the other day about, you know, Gen X, Millennials and Gen Z, and when you think about the bulk of the population below fifty now, they've grown up with the internet, and so they've really grown up influenced digitally and are far more comfortable in terms of shopping for beauty products initially online first....
you know, although they still enjoy an in-store experience, but, you know, making sure that, you know, we recognize that and and are positioning ourselves strongly in the channels of distribution that are increasingly appealing to, you know, to the the consumers now that have very strong spending authority. Accretive innovation. You know, one of the things we did under the PRGP is really take a look at a broader look and a harsher look at our product portfolio. Not only, you know, eliminating some of the underperforming SKUs, but more importantly, looking at our innovation pipeline over the next three years and cutting out some of the innovation that we felt was not going to be accretive to the overall portfolio.
You know, or represent the size of growth that we actually expected it to do in various markets, and so that's been important, and then the last, and I, you know, mentioned this, you know, at the beginning, Lauren. You know, how you communicate and market to consumers today is very different than it was 10 years ago, and we have invested even, you know, over these last few years in, you know, quite a few capabilities, whether it's our, you know, consumer data platform, you know, investing in other digital technologies, investing in consumer insights data, investing in trend data, all of the things that are necessary in order to really activate and connect real time with consumers, read and react and respond in a more agile way.
Leveraging the things that we've invested in over the last few years in a faster way is certainly part of the focus for us as an overall organization, and will accrue, you know, to having, you know, quite a few benefits in the North America market, which is a very fast-paced market with all of the indie brands that you know are in and out of the market, you know, over you know over the years.
Okay. Let's switch and talk a little about margins and profitability, so I feel like, you know, the company has a very well-established pattern of investing ahead of sales growth.
Mm-hmm.
And we know that the PRGP plan is net of reinvestment. But I'd love to get a sense for how much of the stepped up investment is kind of consumer facing and, like, near-term ROI-
Mm-hmm.
versus longer pipeline things like R&D or this harsher look at the innovation pipeline
Mm-hmm.
IT infrastructure
Mm-hmm.
and so on.
Yeah. Yeah, most of it, certainly within the next year or so, is on, consumer facing.
Okay.
And so when we talked about the PRGP, the $1.1-$1.4 billion, again, net, so our targets are actually higher. And the program is designed to be self-funding. Self-funding in the sense of, we're funding the administration for the program, not the restructuring program, but the administration of the PRGP program. And, you know, the savings as we generate savings through the program, in excess of the $1.1-$1.4 billion, we are looking to reinvest that, in particular, back in consumer-facing activities. Now, even within our guidance for the year, we protected some, you know, investment as it relates to advertising, distribution expansion for the brands that are growing faster, and some selling expense that we needed to add back to certain channels in certain markets.
We are very much focused on activating consumer facing investments. That, combined with the precision marketing capability to make sure that we're getting the right return on that investment, is really what we are particularly focused on. You know, making sure that we have the right investment for markets that are growing, and to make sure that, you know, we can capitalize on that growth is a big priority for us as an organization.
Okay. Part also of the PRGP, one of the initiatives is the, quote, "Future of the brand-led model.
Mm-hmm.
And I'm just curious about, like, what does that mean? And, and what was it before?
Mm-hmm.
So beyond kind of net workforce reduction, you know, are there changes that are being made to the org structure?
Mm-hmm.
Because I think the matrix, the geographic and brand, and it's not quite clear. So-
Mm-hmm.
Yeah, where have we been and where are we going?
Yeah. You know, I think one of the historic strengths of the company is the fact that we're, you know, we've been very clear on the fact that we're a brand-led company. You know, what that has allowed us to do with, you know, 20+ plus brands, is have each brand have its own distinctive character. It has its own strategy. It has its own marketing. You know, there are different consumer groups and consumer need states that that our various brands, you know, appeal to. And so that's been, you know, important for us when you think about what in particular, Leonard Lauder years ago, wanting to make sure that he captured share of wallet, the broader share of wallet of, you know, an individual consumer's beauty purchases.
It's also created some complexity in the organization as we've grown, particularly geographically, and so, you know, when you see how fast-moving markets and trends are today, that balance between brand-led and market-driven has added some complexity, to your point, as it relates to the matrix, so part of what we're doing with the brand-led is making sure that we've got the brands very much focused on future innovation with the input from the markets. You know, evolving our marketing strategy to really be 360 , but also enabling our markets to be a bit more agile in terms of some of their decision making, and that's all part of the PRGP. The PRGP is, you know, as I said a couple of weeks ago on our call, focused on recovering our margin.
Mm-hmm.
It's focused on enabling growth, so creating more fuel for growth, and it's also focused on creating more agility and flexibility in the organization. And, you know, and part of, you know, what we're looking at with the brand-led model, we will still be brand-led, but we will make sure we are trying to make sure that we have a bit more agility in terms of decision making in some of our markets as it relates to our brands. And, and that's, you know, that's an interesting journey for the company to go on. But again, you know, it's one that will be important when you think about local competing against local brands and local markets. Indie brands are local brands in the U.S. market. We have local brands in China markets as well.
The ability to innovate and capitalize on trends in our markets really makes it very important for us to be able to enable them to take decisions faster.
Okay. So I feel like I need another, like, forty-five minutes to explore this one. But, if I were to take out what I think is the most salient point, I think-
Mm-hmm
... is that the markets will actually play a bigger role, not a smaller role, going forward. To be more agile, the markets need to have more autonomy in decision making rather than the back up and wait for the response from the brand.
They need to have more information.
Okay
... which we are enabling them with in order to take decisions. And they're enabled with technology as well as information to get the technology for their... Or the information or technology to get the information for their local markets. They also will have a bit more autonomy in terms of decision making, when there is a trend in a market. And we've actually seen, I mean, this is not something that we're, you know, just ideating behind. We've actually seen in markets when they had that ability, their ability to activate and capitalize on the trend. We have a broad portfolio. We've been in business for a long time. We have a broad portfolio of products.
We have the ability to either capitalize on existing trends that are in markets or create trends, but that has to be done at the market level. And we also have to, you know, activate big campaigns and innovation at the global level. And that blend of both of those is what will allow us to continue to grow, in an environment where, you've got a much broader set of competitors that are local, that have a bit more agility to, operate than, you know, than just a globally driven company.
Okay, so just sort of wrapping up, I think as we think back on your legacy as CFO of Estée Lauder.
That sounds so old.
I know, I know. I actually... What are maybe words of wisdom you would offer to Akhil? Because this is, you know, there'll be a recording of this. He can go back.
Akhil should be listening right now.
Right.
But look, I am incredibly proud of what we've accomplished over the last 12 years and incredibly proud of the company in general. Obviously, the last couple of years have been challenging, but you know, first and foremost, I'm proud of all of my organizations. So I leave the company with a very strong finance organization, with an IT organization that has you know enabled the technological capability that the company needs to leverage going forward to be successful and grow in its markets. You know, I leave the company with a shared services organization, which you know we will leverage more under the PRGP to actually help the company you know standardize a bit more of some of the processes and leverage expenses a bit more as well.
You know, my M&A group has done a terrific job of acquiring brands like DECIEM, and you know and obviously Tom Ford. We've, you know, had some artisanal fragrance category as well with Le Labo and Kilian and Frédéric Malle. We've had some misses, but we've had a lot of hits, and you're going to have that in M&A. So I'm really proud of the talent that I leave behind at the company and you know and what we've accomplished. You know, we've done restructuring programs before. Leading Beauty Forward is actually where we made a lot of the changes to our finance organization, created shared services.
And so I have every confidence that the organization can execute the PRGP, given the experience that we have had in the past that was quite successful. You know, I hired Akhil almost 10 years ago. He's part of the development that I've done with the finance organization, and I have every confidence that he can lead the finance organization going forward. So I don't have any words of wisdom to him. I actually... Well, we talk all the time, and I will be an advisor to him throughout the end of the fiscal year.
Okay, great. Well, Tracey, thank you so much for your support, being at this conference so many times over the years.
Oh, well, thank you.
And I-
I've enjoyed this conference very much, so-
So-
... and the interaction with all of you.
Thank you.