NU Skin Enterprises, Inc. (NUS) Q2 2023 Earnings Call Transcript

NU Skin Enterprises, Inc. (NYSE:NUS) Q2 2023 Earnings Conference Call August 1, 2023 5:00 PM ET

Company Participants

Scott Pond - VP, IR
Ryan Napierski - President, CEO & Director
Connie Tang - EVP & Chief Global Growth & Customer Experience Officer
James Thomas - Interim CFO

Conference Call Participants

Chasen Bender - Citi
Blake Anderson - Jefferies
Christopher Armes - Stifel
Linda Bolton-Weiser - D.A. Davidson

Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Nu Skin Enterprises Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note that today's conference may be recorded. I will now hand the conference over to your speaker host for today, Mr. Scott Pond, Vice President of Investor Relations. Please go ahead.

Scott Pond

Thanks, Olivia, and good afternoon, everyone. Today on the call with me are Ryan Napierski, President and CEO; Connie Tang, Chief Global Growth Officer; and James Thomas, CFO. On today's call, comments will be made that include some forward-looking statements.

These statements involve risks and uncertainties, and actual results may differ materially from those discussed or anticipated. Please refer to today's earnings release and our SEC filings for a complete discussion of these risks. Also during the call, certain financial numbers may be discussed that differ from comparable numbers obtained in our financial statements. We believe these non-GAAP numbers assist in comparing period-to-period results in a more consistent manner. Please refer to our investor website for any required reconciliation of non-GAAP numbers. And with that, I'll turn the call over to Ryan.

Ryan Napierski

Thanks, Scott. Hello, everyone. Thanks for joining us today. In Q2, we continue to advance key initiatives enabling Nu Vision 2025, our multiyear transformation to becoming the world's leading integrated beauty and wellness company that's powered by our dynamic affiliate opportunity platform. While we remain confident in the direction and future outcome of our strategy, the persistence of macro headwinds has made the journey more challenging than expected, especially over the past several quarters. Nevertheless, we remain committed to our strategic direction, investing in the future through EmpowerMe personalization, social commerce and our digital ecosystem while pivoting our action plan based on near-term needs in the business, which I'll speak to in just a moment.

Our second quarter revenue was $500.3 million while earnings per share were $0.54. Both revenue and EPS were in line with our guidance and up on a sequential basis, mostly reflecting 8% year-over-year growth in Mainland China, where momentum continued to build ahead of plan. With ongoing economic uncertainties in the market, we remain cautiously optimistic given the healthy growth of paid affiliates and sales leaders during the quarter, both encouraging signs leading to sustained second half growth.

Our growth in China was offset by general softness in other markets, driven in large part by macro-related pressures negatively impacting overall consumer sentiment and spending. Aggressive strategic price increases over the past several quarters around the globe to combat margin pressures have taken their toll on customer acquisition which has led to sluggish sales channel performance, most notably in developing markets, including Southeast Asia Pacific, Europe and Africa and Latin America.

In the Americas and South Korea, we launched new products, including Nu Colour Lash and Brow Serum as well as TRMe, which performed below expectations due in large part to declines in our channel dynamics impacting paid affiliates and sales leader counts. In the second half, we will be doubling down on efforts to stabilize consumer demand and regenerate growth in sales channel while continuing to focus on our long-term Nu Vision 2025 business transformation. Let me briefly describe our plans for the remainder of the year.

We're in the final stages of preparation for the launch of the company's first holistic wellness, beauty and beauty device ageLOC WellSpa iO. This device system, which helps users restore, revitalize and recover their bodies will be introduced in several markets in Q3 and is expected to be rolled out in nearly all markets by the end of 2023. WellSpa iO will be our second connected device building upon what we've learned from the launch of our ageLOC LumiSpa iO, which has generated more than 6 million connected treatments to date, helping us learn more about the needs of our customers. WellSpa iO will be complemented with an enhanced interactive iO experience in our Vera app that will coach users through their optimal journeys. With the introduction of this next device, we expect to make steady progress towards our annual goal of 15% of revenue coming from connected device systems on our way to the longer-term target of 30% of revenue by 2025.

Second, affiliate powered social commerce. We're doubling down on our efforts to accelerate growth of our sales channel with the introduction of a new channel growth program in most of our markets called EmpowerStart. This new program is focused upon motivating brand affiliates and their journey to becoming new brand representatives and sales leaders. EmpowerStart aligns with our EmpowerMe creator program introduced in Q2 and to focus our channel development efforts on both early and dev eloping leaders, critical for regenerating growth in the channel.

We anticipate that these two programs working together will bolster both affiliate and sales leaders in the second half and motivate customer acquisition. Also, please note, as you look at our paid affiliate numbers, we have adjusted the eligibility requirements for rewards in some markets to more narrowly focus on those affiliates who are actively building a consumer base. This adjustment will roll out in additional markets over the next several quarters.

And third, our digital ecosystem. We continue to see solid adoption of our Vera and Stella apps, which are central to our initiatives around leveraging the power of a robust digital ecosystem by enabling us to drive deeper connections with customers and affiliates. We're well on our way to hitting our full year targets of monthly active users for both apps and we'll begin transitioning to focus on growing customer acquisition, conversion and lifetime value through deeper connections. Also in June, we began the implementation of Equinox, our new e-commerce global platform in North America. This new platform significantly expands the transactional scale of our business as we lean further into social commerce. Despite some early growing pains, migrating to a new platform will significantly expand our ability to create a more dynamic customer experience while enhancing operational efficiencies.

Now regarding our RISE ecosystem, we're pleased to report 33% year-over-year growth in RISE as manufacturing performed well in the quarter and booked orders remained strong through year's end. RISE continues to grow to become a larger part of our enterprise as we build out the synergistic ecosystem of capabilities that benefit our core business as well as enable our broader enterprise transformation.

We made two important investments for our future in the second quarter. First, as you saw from our previous release, we completed the acquisition of BeautyBio, an omni-channel and clinically proven clean skincare and beauty device brand. The company's approach and mission are closely aligned with our core values and our enterprise strategy. BeautyBio has unique device IP in hydration facial and micro-needling technology. Both fast-growing segments of the beauty device marketplace, which we anticipate leveraging for our core Nu Skin business. For BeautyBio, our unique expertise in devices, manufacturing and technology will help this business reach its potential as part of the RISE ecosystem. BeautyBio will continue to operate as an independent business as we seek synergistic opportunities to strengthen all businesses through RISE.

Second, we made further headway into the personalization space with a majority investment stake in Life DNA, a leading DNA assessment and recommendation technologies company. We believe that personalization in the beauty, wellness and lifestyle space will deepen over time to the genetic level and that DNA will become an increasingly important source of information for our consumers to understand their personal care and wellness needs that can influence the quality and longevity of their lifespan. While it's too early to discuss the application to our business, our investment is indicative of our commitment to evolving our core Nu Skin business through personalization, and when combined with developing technologies like AI, we believe it will help Nu Skin become a meaningful disruptor in the beauty, wellness and lifestyle space.

So to wrap it up, the agility of our organization is a key strength as we adapt our business and tactics to this more challenging environment. While the pillars of Nu Vision 2025 have not changed, understandably, we're adjusting time and cadencing factors as needed. In addition, we are reemphasizing other critical aspects of the core business, including safeguarding the enterprise and optimizing profitability. And we remain highly strategic in our approach to allocating capital and prioritizing investment decisions.

So with that, let me turn the time over to James to take you through our financials in more detail. James has a long history with the company, having served as our Chief Accounting Officer for the past several years. He's had a strong background in the wellness space and has been instrumental in leading various elements of our strategic transformation and resource prioritization efforts. So James, take it away.

James Thomas

Thank you, Ryan, and thank you for joining us today. I look forward to working alongside this forward-thinking management team as we work toward achieving Nu Vision 2025 and accelerating our core business while we build out our extensive enterprise ecosystem strategy to generate long-term value for our shareholders and all stakeholders. I'll provide a brief Q2 financial review and then give initial Q3 guidance and speak to our full year 2023 projections. For more information, please visit our Investor Relations website.

For the second quarter, we generated revenue within our prior guidance range of $500.3 million with a larger-than-expected negative foreign currency impact of 3% or $16.4 million. Our reported earnings per share of $0.54 landed near the high end of our guidance range, aided in part by our strict cost control measures. Our Q2 reported gross margin was 72.9%, which was down 70 basis points versus the prior year period due to our RISE manufacturing segment, making up a higher percentage of overall revenue. This decline was partially offset by improving margins in the Nu Skin core due to growth in China, in addition to improving margins in our RISE Manufacturing segment due to higher throughput to our expanding CPG customer base.

We are also pleased with the 60 basis point sequential improvement as we execute on Project Accelerate, our cost optimization initiative, which focuses on driving margin improvement with margin-accretive products and improved operational efficiencies. Gross margin for the core Nu Skin business was 77.2%, a sequential improvement of 80 basis points. Selling expense as a percentage of revenue was 37%, 210 basis points lower due in large part to growth in our Manufacturing segment, which now represents 9% of our total revenue and does not carry selling expense. The lower selling expense can also be attributed to the sales compensation program in China as they operate under a different model. For the core Nu Skin business, selling expense was 40.2%. As part of our focus on operational efficiencies, general and administrative expense was $137.0 million or 27.4% compared to $141.6 million or 25.3% in the prior year period.

Our operating margin for the quarter was 8.5% compared to 9.2% in the prior year period. The other income expense line reflects a $5.4 million expense compared to an $8.6 million expense in the prior year period. During the quarter, we paid $19.5 million in dividends and did not repurchase any stock. Considering the first half results, a stronger-than-expected U.S. dollar and recent acquisitions, let me now provide initial Q3 projections and updated 2023 annual guidance ranges for revenue and EPS. For Q3 2023 we are projecting sequential improvement with revenue of $500 million to $540 million, including a negative foreign currency impact of 1% to 2%. This projection reflects continued macro challenges and factors and modest impact from the introduction of our ageLOC WellSpa iO system. Our Q3 EPS guidance is $0.54 to $0.69 and assumes a projected Q3 tax rate of 18% to 28%.

For the full year 2023, we are projecting revenue of $2.0 billion to $2.08 billion which includes a 2% to 3% unfavorable foreign currency impact. We are anticipating reported earnings per share of $2.15 to $2.45 or $2.30 to $2.60, which excludes the first quarter restructuring charge of $9.8 million. Our guidance assumes an annual tax rate of 16% to 26%. While the current macro environment remains uncertain, impacting our near-term projections, we continue to believe that the future opportunities to accelerate our business will expand as we invest in our key strategic imperatives supporting our enterprise growth strategy. We are committed to continuing our operational improvement journey and believe our strong balance sheet and proven expense management discipline position us well for long-term success.

And with that, operator, we will now open the call for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from the line of Chasen Bender with Citi. Your line is open.

Chasen Bender

Great, thanks, operator. First of all, James, congrats on the role. Looking forward to working with you more going forward. I guess maybe you can start and you and Ryan can tag team this one. Could you maybe give us some additional color on the BeautyBio acquisition and the decision-making process behind it? It sounds like it was very attractive IP driven, but any more color on that would be great. And then if you can just help us understand the P&L impact of the acquisition and what that should mean at the top and the bottom line, please?

Ryan Napierski

Yes. Sure, Jason. Thanks for being on the call, asking the question. I'll take the first part, and James can speak to the second. Yes, BeautyBio, as you said, we've -- for quite some time, have been leaning into device systems in the beauty space. We already have a strong complement of devices in our core business. but we're missing certain key areas of IP that we believe are critical to continue to lean into the world's leading device positioning that we have. And so that certainly was a big part of that business. Also the capabilities of the team, the founder there, and the owner of that business is very good. They have strong omnichannel capabilities and all. We do see that business sitting separate and distinct from Nu Skin while we look at synergies across the RISE portfolio moving forward and James, maybe you ?

James Thomas

Yes. Thank you for the question. So BeautyBio, it's a smaller acquisition, but yet very important to the strategic direction of our future with our enterprise strategy. And so the impacts on the back half of the year are relatively pretty small. And you can get more information on that as you look at the disclosures around the acquisition. The uplift in revenue is around $10 million to $15 million in the back half and there's a slight increase to our G&A pressure in the back half of the year.

Chasen Bender

Got it. And then just on China, it's nice to see the constant currency sales inflection and the trend in the affiliate count. You obviously got there sooner than expected and understanding that comps are pretty easy. Can you give us some perspective on what drove that upside? And at this point, is it your view that the China business has troughed and that we should see year-over-year constant currency sales growth in the remainder of the year?

Ryan Napierski

Yes, I'll comment on it and then I'll have Connie also provide her perspective as well as she works directly with the team there. Yes, as I mentioned, we remain cautiously optimistic in that market. More from the macro perspective, we all read the reports coming out of China, and we understand the economic uncertainties in that market. Our business is generally seeing good recovery in those critical KPIs at the channel level, as you mentioned, in affiliates and brand reps or sales representatives over there. We use a different model in China. And so that's good. I think the -- from the product side as well, we're seeing good uptake on a new product line, TRMe there. And so we're optimistic. Connie, what would you add to that?

Connie Tang

I would add that certainly, we are cautious as the country and our sales leaders begin to be more active, have the opportunity and certainly the capability to engage with customers much more closely than they have been over the past 1.5 years, two years, of course.

We saw some nice uplift certainly sequentially in the affiliate count growth as well as sales leader growth, which gives us also a strong indicator and some confidence as the onboarding of a new product launch also begins to take hold, and we're looking forward to that continuing.

Chasen Bender

Got it. And then, James, maybe one more for you. For the guidance for full year '23, I mean, for 2Q, you really landed at the midpoint of your constant currency sales guide. But if my math is right, it looks like you're actually taking down the implied 2H guide by about 4%, I know you mentioned just general caution on the macros. But is there anything else that's driving that? Is it conservatism? Or is there something more to that?

James Thomas

Yes. I think our main factors is just evaluating the first half results and the way the markets and regions have come in. The other major factor in that is foreign currency, when we look at it the way it's rolling through compared to our original guidance. As we go through and we look at currencies like the yen, the dollar has actually remained stronger than what our initial projections were. So we ran that through the model through the back half of the year, and that's another large part of that adjustment down.

Ryan Napierski

Chasen, sorry, one other comment just on your first question before we move on, on the BeautyBio side, because I don't think I adequately maybe represent some of the elements on that strategically. You all know for a long time, Nu Skin has really been a beauty and wellness company that on a core business basis, our product categories and the like. And I think over time, what we've learned through just the industry overall beauty and wellness industry, looking at that, we see our businesses being highly undervalued for the products and the offering that we have.

And I think there's a lot we can and need to learn at an enterprise level from a total shareholder return perspective on how we better position ourselves for the products and the brands we represent as opposed to the channel through which those products are distributed. And so there's just a lot to learn from these, whether you call them Indie beauty or fashion beauty brands that I believe will benefit shareholders long term and benefit our core business as we learn how to better represent ourselves for those products and the innovations that we have is just a critical part of our transformational journey. So that's all I'd add to that piece.

Operator

Our next question comes from the line of Blake Anderson with Jefferies. Your line is open.

Blake Anderson

Appreciate the time. Just wanted to ask on the guidance, a follow-up question on that. I think you mentioned you expect to show a return to growth in Q4. Just was wondering if you could kind of rank the main factors that give you that confidence?

Ryan Napierski

Yes. Sure, Blake. Just a couple of thoughts and James can back in as well on this. But certainly, as we continue to look at the China activities and the trends there. We're feeling optimistic that, that will continue. And then I think with WellSpa iO, this is a major category disrupting product for us. It will be our first wellness and beauty products. So it's a body product that a lot of our Asia businesses are very nutrition focused. The TR90 brand is very strong there, and we just see this as an opportunity to kind of bridge the world of devices and IoT connected devices and bring those more and more into our Asia businesses as well. And so those are the two key factors for sustaining a return to growth guide. Anything James on that?

James Thomas

Yes. The only other thing that I would add to that is just as we go through when we look at the revenue mix between our different revenue-generating segments, that shift has come in different ways. So China is a big part of that in the back half. And then coupled with the product launches, we see the back half of the year going through with sequential improvements from Q3 and then progressively into Q4.

Connie Tang

Let me add one more thing. This is Connie. I believe this new program that we had just launched literally today, the EmpowerStart program adds very nicely to generating momentum and energy to attract, to motivate and to help our current sales leaders attract new affiliates into the channel. And coupled with the very strong unique innovative launch of WellSpa iO, we really have a nice lineup to allow for new customer acquisition, customer retention as well as help further along an affiliate successful journey through our business.

Blake Anderson

That's really helpful. And then I just wanted to ask on the BeautyBio acquisition. I think you mentioned the revenue number of $10 million to $15 million in the second half and then some slight G&A pressure. Can you talk at all about maybe accretion expectations or just broader synergy impacts any way to kind of size that up over the next 12 months or so?

Ryan Napierski

Yes. And James can speak to the technical accounting, that's not my expertise. From a synergies perspective, as we -- from a RISE point of view, we clearly have opportunities in manufacturing and scaling some of our services as well across. And so I do think there are accretive opportunities there. Our main focus with that business is to sustain growth moving forward as they continue to grow throughout the U.S. market. And ensuring that we're providing support and services to enable that. While, again, we utilize some of their IP capabilities to help us on the core business to continue to grow our dominant leadership position there in Beauty Device Systems brands. But James, anything else you'd say?

James Thomas

Yes. I would just say, again, look at our disclosures in the 10-Q because they have more detail as to the pro forma statements of what that company is from a number perspective. And then the purchase accounting on the acquisition is the drag that you'll see come through in G&A. But with the way we look at BeautyBio and the way we position that, how the new skin core benefits from that IP and technology, we see some uplift through that going forward throughout the next several years.

Blake Anderson

Got it. And then last one from us. I think you mentioned some of the impacts in the international markets from price increases. I was wondering if you could talk a little bit more about the U.S. consumer, any kind of change in how they're behaving in the last few months?

Ryan Napierski

Yes. The U.S. has been a really interesting business for all of us as we watch the economic reports coming out from the government, et cetera. Generally, what we're finding with ours is there are trade-off decisions that are being made. Some industries continue to do really well around experiential economy and even kind of basic CPG type of activities in broader consumer products. We found that there are some trade-off decisions that we're seeing in our higher-end products here. And I do think that's a leveling effect in the sense that I don't see this as a long-term issue. I just think it's an adjustment as consumers and households are balancing discretionary spend. But yes, it's a real question mark for us as we all try to watch and observe the economy and what's going on there.

Operator

Our next question comes from the line of Mark Astrachan with Stifel. Your line is open.

Christopher Armes

Hi, this is Chris Armes on for Mark Astrachan. So just kind of broadly on the B Bio acquisition. So basically, what's Nu Skin kind of getting from the acquisition? And if it's basically the technology, why couldn't it have developed it more internally? And basically what could Nu Skin have done on its own versus what BeautyBio can do?

Ryan Napierski

Yes. I think -- yes, Chris, good question. I think we always look at kind of build by borrow type of valuations as we look to different things. And again, I want to be clear that this BeautyBio brand is an exciting omnichannel brand. It's one that I think is cut from similar cloth to us from a product philosophy, clean beauty, a very modern approach to kind of their go-to market. So there's a lot of value in that business there.

When I talk about the technology and the IP specifically, when you really get into patents and holdings and microneedling and hydration and facial. Those are two really burgeoning and growing product categories. Certainly, with the right R&D and workaround, there's ways to approach those markets. But when we see a great company with a great approach, that can get us there faster and into markets that we believe will benefit not only BeautyBio, but our Nu Skin core as well as we continue to expand that device systems platform hydration, facial and micro-needling are two big opportunities.

We also continue to see per the last question, consumer trade-offs and consumer spending. And the more that we can provide in-home services like hydration facial or micro-needling that typically has been more of an esthetician driven service model. That's a business we know really well with products like Galvanic Spa and frankly, even WellSpa iO that's coming out. So we just see this as a complementary approach to us moving faster and faster into this device and connected device world. And I think on their side, again, they get access to manufacturing to services, and know-how that they don't have as a smaller brand that's growing. So I think we see it as synergistic and a faster way to get to where we need to go.

Operator

And our next question in queue is coming from the line of Linda Bolton-Weiser with D.A. Davidson. Your line is open.

Linda Bolton-Weiser

Yes. I apologize. I missed your introductory statements, but on the BeautyBio acquisition, can you just tell me, is it also a direct seller or how do they distribute their products currently? And then are you going to just integrate this brand and product into your direct selling and the sales force will be able to sell the product? Is that the plan here?

Ryan Napierski

Hi Linda, yes, no worries. You can read the transcripts as well. So I appreciate you joining. Yes. No, I think for BeautyBio, they are not a direct sales company. They really started out in television shopping 11 or 12 years ago. They're really very, very rapidly expanding in the omnichannel space, so strong in Ulta Sephora as well as a lot of department stores. in fact, have a full footprint in Ulta, which is a pretty remarkable thing for a young beauty brand to get into and so that's kind of how they work today.

No, as we said, BeautyBio will continue to operate independently, we will look at their IP and we'll look at opportunities to incorporate some of that technology into our Nu Skin business, but we don't plan to integrate those to at this point in time, although there are some synergistic value adds that each business will have independently.

Linda Bolton-Weiser

Okay. And just related to that, I'm just curious USANA, which I follow, they're actually making some acquisitions because they want to explore other channels. So they're buying like products that are sold in other channels like regular retail and they're keeping them separate. So is that what you're doing? I mean, are you kind of doing a learning experience here with experimenting in those beauty channels and is that kind of part of why you're doing this acquisition?

Ryan Napierski

It's -- no, it's more -- so we've spoken, and I'm going back in time, it's probably something we should speak more to at a future Investor Day around our overall enterprise strategy. As we look forward into the future, we have been moving down this path to building our integrated beauty and wellness platform. And over time, we see Nu Skin Enterprises and our RISE business becoming more and more of what we call -- refer to as an ecosystem, a beauty, wellness and lifestyle ecosystem of brands and companies that synergistically provide solutions to market that help people in their beauty, wellness and lifestyle needs.

And so for us, it's I guess you can call it explorations, but it's more around aiming towards an enterprise ecosystem strategy that serves the beauty, wellness and lifestyle industries. And so we are certainly eager to learn from our partner companies and the various investments we've made over the past five or 6 or 7 years as we lean into that broader vision of building out this beauty wellness and lifestyle ecosystem. But it is part of a longer-term strategy that we probably need to dive into more at a future Investor Day.

Linda Bolton-Weiser

Okay. And then I was just wondering, can you remind me, I thought the TRMe or something, the personalized version was supposed to launch in maybe North America sometime in 2023. Has that launch occurred yet?

Ryan Napierski

Yes. So no, it has not yet and you're spot on. So there's a TR90 brand that was introduced several years ago, and then the TRMe, which is the customized version, is just beginning to roll out market by market. I think Q4 of last year went into Taiwan or so, Korea in Q1 and then China, Q2 with the formal launch going into Q3. Market by market, it's rolling out. With the U.S. market as we continue to observe the weight management sector, it is a pretty cloudy space, as you know, for the companies you follow. And I think it's still yet to be said exactly how we bring this customization or personalization in weight management system to be truly differentiated here.

So we're really leaning in and learning in Asia where this business is really quite unique. There aren't many of the companies that are here in a more crowded market in the U.S. aren't there, and so we're kind of exploring there and learning and understanding how personalization fits with the bigger strategy. But while we continue to observe what's going on here. We do anticipate it coming here, but we need to do it at the right time.

Linda Bolton-Weiser

So I'm just curious because I follow that weight loss space. And of course, there's been so much publicity over those [ph]GLP-1 drugs. Are those drugs growing prevalent? Is that kind of what's making you rethink that launch a little bit?

Ryan Napierski

Yes. Yes. I just -- I think it's very -- with the other businesses that we follow as well. It's just a very big question mark of how that's going to float out. And traditionally, our approach has not been through pharmaceuticals. That's not really our approach, we really kind of look at more of the nutraceutical approach or nutritional approach and healthy lifestyle management. So we are observing it, we're -- from our product philosophy of all of the good, none of the bad, how we lean into that, we just need to observe it longer.

Meanwhile, we continue to lean into it in Asia, where I think our product value approach and nutrition and healthy lifestyle approach fits our direction better, and I think works in Asia quite well. And so we'll continue to observe for a little while longer.

Linda Bolton-Weiser

Is the TRMe a powder or like a tablet product?

Ryan Napierski

Yes. It's actually it's a series of different products. So we have powders, we have supplements and it's a customizable set of products that can be assembled per the customers' needs, help through an app or an assessment offering that helps them to get to the right product for their needs.

Okay. I think we are through all of the questions. I just wanted to close by saying thank you to all of you that were able to attend and asking questions. As we -- as I mentioned previously, we're in a very continuously interesting time as we continue to work towards our transformation and Nu Vision 2025 and building out our broader beauty, wellness and lifestyle ecosystem. We continue to make strategic moves in that direction while pivoting in the near term. to ensure that we're addressing the factors that we face today, and we'll continue to keep you well abreast of those decisions and those pivots, so that you're familiar with our plans. So thanks for joining. We look forward to chatting with you again next quarter. Bye-bye.

Operator

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.