The Beauty Health Company (NASDAQ:SKIN) Q3 2023 Earnings Call Transcript

We now expect fiscal 2023 net sales in the range of $385 million to $400 million, and adjusted EBITDA margin of 5% to 6%, respectively. This represents approximately 7% net sales growth at the midpoint, on a year-over-year basis. Our updated 2023 outlook reflects the work that remains to be done to reaccelerate Syndeo adoption in the U.S. While we are optimistic in our ability to execute against this goal, this will take time. As a result, we are suspending our long-term 2025 financial outlook. Lastly, I want to update you on our strategic transformation program, we announced in September. This initiative is expected to have a significant impact on our financial profile. And we remain on track, to deliver over $20 million in annualized cost savings, primarily through G&A efficiencies during Q1, 2024.

We expect to incur approximately $9 million to $11 million of cost to achieve for these, Phase 1 annual savings. The cost to achieve, are primarily related to severance and consulting expenses. In parallel, we have begun work on Phase 2 of the project, which is focused on optimizing our manufacturing and supply chain footprint and continued optimization of our organizational structure. We expect Phase 2 will deliver over $15 million in annualized cost savings during Q2, 2024. We expect to provide more detail in the New Year, around the savings and any related costs to achieve. In closing, while we are disappointed in our results and recognized that there is work ahead, we are committed and confident in our ability to reaccelerate Syndeo adoption in the U.S. and to further our execution across our international businesses.

Importantly, our long-term strategy and our business fundamentals remain intact. We look forward to speaking with all of you and sharing our progress as we continue to execute against our strategy. While we will not be hosting Q&A on this call, if you have any questions, please reach out to our Investor Relations team at ir@beautyhealth.com. Thank you.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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