James McCann: We have, Linda. There’s lots of changes. And this both — the changes that Google is implementing or talking about implemented, what they have implemented. And there’s also big macro trends that are happening in the marketplace that we feel we’re in an awfully good position to weather and respond to. And frankly, some of the things we experienced during the last quarter give us hope that we’re going to be less dependent on the big search engines in the future than we were. One of the big assets we’ve accumulated through the COVID burst was a huge increase in our database, and that gives us some flexibility and less dependency on search engine activity. But Tom, you know really well the specifics of Linda’s question.
Thomas Hartnett: Yes, I mean, I think we’re talking up, Linda, is just another change for Google, which is a very dynamic business and always has changes going on. Certainly, we also saw some significant changes in just the SERP, in how the landing pages for Google showed up this year, which we’re always reacting to. Overall, this was a competitive environment. Their CPMs and CPAs were up, et cetera, and we kind of expected that to occur.
James McCann: And if you — all of your marketing budget or a substantial part of your marketing budget is at that bottom of the funnel kind of activity there, it’s going to have big ramifications on you. Fortunately for us, that’s not the case.
Linda Bolton-Weiser: Thank you very much. I appreciate it.
James McCann: Thanks, Linda.
Operator: [Operator Instructions] Today’s next question comes from Alex Fuhrman with Craig-Hallum. Please go ahead.
Alex Fuhrman: Hi, guys, thanks very much for taking my question. And congratulations on the strong bottom line results in the quarter. Bill, I was wondering if you could unpack the lower revenue guidance a little bit more. It seems like the Q2 results were not very far off from what we were all expecting, but the change to the full year revenue guidance is not insignificant. So is it something maybe you’re seeing in kind of the lull period between Christmas and Valentine’s Day that was maybe a little bit disappointing or just curious if you’re seeing any kind of early trend lines into Valentine’s Day now or if that’s maybe too early?
James McCann: Well, it’s I would say definitely too early. Valentine’s Day is a real pain in the neck because it’s very, very busy for several days. Mother’s Day, it’s a two-week ramp up. The holiday quarter, it’s from Thanksgiving on. It’s maybe a week or two before Thanksgiving. But Valentine’s Day, it’s a big burst of business. Customer dynamic changes, it goes from majority women to majority men, which are wonderful customers, but they don’t come back as regularly and frequently as female customers do. So it’s something we — it’s expensive to prepare for. Our cost of goods jumps way up and we have this big burst of business. So yes, it’s a little difficult for us to project exactly what will happen at Valentine’s Day. But as Tom mentioned, day placement is critical for Valentine’s Day.
And last year, for the first time, the Super Bowl was right before Valentine’s Day. So Valentine’s Day was Tuesday last year and the Super Bowl was at Sunday. They moved it back a week and it’s — from its normal schedule to allow more time for the extra regular season game and have — still have two weeks from the additional playoffs till the Super Bowl. So we think that we’re still going to have that this year. So it’s still close to Valentine’s Day. But now you have three selling days, Monday, Tuesday and Wednesday, with people in their normal work routines and not having the distraction of the Super Bowl just 48 hours before Valentine’s Day. So we’re expecting all of those things will endure to our benefit. Also, we have to watch the weather carefully because that’s a big variable.
So nothing. We’re excited that Valentine’s Day is coming. It’s a pain in the neck. As I’ve mentioned, I’ve been through a few of these, but we don’t see anything trend-wise that would give us any concern or, frankly, any reason to get up and kick our heels.
William Shea: Yes. But, Alex, I mean, while our sales trend did improve in the second quarter, it didn’t move at the pace of recovery that we had anticipated. So still a little softer than we wanted it to be. And as a result, our second half of the year, which we had originally thought to be at a faster improvement than we currently at, that’s where we changed our guidance.
Alex Fuhrman: Okay. That’s very helpful. Thank you both.
James McCann: Thanks, Alex.
Operator: And ladies and gentlemen, this concludes our question-and-answer session. I’d like to turn the conference back over to Jim McCann for any closing remarks.
James McCann: Well, thanks so much for your time and interest today. Please let us know if you have any other questions. We’re available to answer them for you. Please reach out. And do remember, as Alex just mentioned, Valentine’s Day is fast approaching. Today’s February 1. Valentine’s Day is the 14th. Valentine’s weekend begins around the 8th or 9th. So make sure the people in your life that you care about know how much you care for them. Thanks for your time today.
Operator: Thank you. This concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines, and have a wonderful day.
