Welcome to the Kering first quarter revenue conference call and webcast. Please be advised that today's conference is being recorded. As a reminder, all participants are in listen-only mode. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Jean-Marc Duplaix, Chief Financial Officer. Please go ahead, sir. Good evening to all of you, and welcome to Kering's 2023 first quarter revenue call. Starting on slide 4, our revenue reached EUR 5.1 billion this quarter, up 2% reported and 1% comparable. Retail fueled our comparable growth, and all our houses contributed to the positive trend in our store network. Wholesale was down double digit as we pursue, and in some cases, intensify the rationalization of this channel to tighten control over distribution. FX was broadly neutral, with scope a two percentage point boost from the consolidation of Marionnaud. Even if we set aside the drag from wholesale, it was a soft quarter. On a brighter note, retail sales improved at every one of our houses month after month. Western Europe and Japan posted very positive trends, while North America was still muted. Asia Pacific swung back to growth on the gradual recovery in China. While the contribution of tourism resumed in Asia Pacific and was confirmed in Western Europe, our brands did not relax their focus on local clientele in all key markets. I'll come back shortly on the regional trends. Our houses continued to implement their elevation strategies patiently and with determination. I will highlight some of the initiatives they rolled out to raise desirability and exclusivity. Many more are in the works. Their unique blend of heritage and creativity was very much in evidence at each of their fashion shows, which all received top rankings and gathered a lot of attention. High visibility communications campaigns were launched to support and amplify our brand statements, with others to follow as the year progresses. Turning to slide 5, our revenue breakdown by business and region. Kering Eyewear and Saint Laurent led the growth, up 11% and 8% comparable respectively. The contributions of Gucci and Bottega Veneta were up very slightly. Revenue at our other houses was down 9% as the weight of wholesale more than offset progress in retail. We've seen very different dynamics by brand, channel, and region, as we will discuss later. Sticking to big picture comments, Western Europe, Japan, and Asia Pacific all gained share in our revenue mix, now respectively weighting 25%, 7%, and 40% of the total. Conversely, North America lost 6 points and represented 21% of total revenue. Rest of the world was stable. On slide 6, let's review our revenue by channel and region. Retail, accounting for 76% of the total, was up 4% comparable in Q1. Expansion of our global store network has been very modest since year-end. Western Europe, up 15%, remained a powerful growth engine, broadly in line with Q4 trends. Locals still accounted for the majority of the sales, but tourists also contributed with hefty demand from intra-European, Middle Eastern, Asian, and American travelers. Japan enjoyed a buoyant quarter, up 30%. Revenue from locals grew steadily, and the country also benefited from strong tourist inflows. North America, down 18%, had a challenging quarter, although trends were not very different from Q4 and even in line when you adjust for the drag from Balenciaga. The explanations are the same as last quarter and should not come as a surprise. One important element is the normalization on particularly high comps, if you consider that we are still nearly 60% ahead of Q1 2019. Other factors include lower demand for categories more exposed to the aspirational clienteles, as well as the underperformance of the online channel. To some extent, this is a short-term flip side of our houses' elevation strategies. Looking at the U.S. cluster, it is a bit more resilient, thanks to overseas shopping, notably in Western Europe. Asia Pacific swung back to positive territory, up 10% compared to a 19% decline in Q four. The improvement was of course driven by Mainland China. Our houses benefiting gradually from the reopening of the market. Hong Kong and Macau rebounded sharply. The rest of Asia was supportive overall, with the exception of Korea, which posted a weaker quarter on the back of steady increases until the end of last year, as well as dynamic trends from Korean travelers in Asia Pacific and Europe. Finally, rest of the world was down very slightly as further growth in the Middle East on top of very high comps was not enough to offset the decline in Eastern Europe. For their part, wholesale and other revenue were down 10% comparable, reflecting the sharp drop in pure wholesale from our luxury houses, notably in the U.S. This was partly offset by good performances at Kering Eyewear and in royalties. Let's now move to our houses, starting with Gucci on slide 7. Q-one revenue was up 1% reported and comparable. Retail grew 1% comparable and as usual, you will find details by region for all our houses in the appendix. As we told you in February, the work we are doing at Gucci is a journey, not a race, and we don't expect it to pay off in the very short term, but we are extremely heartened by our progress to date, by the drive of all the teams and by the reaction in the market. For example, if you look at Gucci's performance by product category, it is worth stressing that handbags, travel and women's ready-to-wear led the growth. It is a testimony to the fact that recent introductions together with focus on iconic lines are yielding positive results. Across categories, Gucci is also achieving higher AURs coming from both newness and carryovers. The Gucci teams are vigorously reinforcing the product proposition and pipeline across collections and price segments to achieve optimal balance in the offer architecture. Gucci unveiled its first salon in L.A. two weeks ago, displaying the house's most exclusive pieces and proposing a bespoke by appointment only experience for its top clients. Following the campaign for the Jackie bag, you have certainly noticed earlier this year, the house's global communications are now featuring the Horsebit 1955 and Bamboo 1947 in exciting displays. Three days from now, Gucci will open a beautiful immersive exhibition in Shanghai, Gucci Cosmos, showcasing its heritage, innovative spirit and visionary creativity. This striking event will be an opportunity to bolster its image and position in the China market. Moving to slide 8, Saint Laurent delivered another good quarter. Comparable sales rose 8% year-on-year, with retail up a healthy 14%. Leather goods and ready-to-wear drove growth thanks to both the undiminished appeal of carryover lines and the solid showing of new collections. Saint Laurent's legitimacy in higher price points was further demonstrated by the success of its recent leather goods introductions. The house is systematically building on its legacy and desirability. Its winter 2023 fashion show, reinterpreting classic styles in a venue reminiscent of the grand ballroom in which its founder presented his haute couture collections, was widely acclaimed. As anticipated, wholesale was down double digit on retailization and increasingly selective distribution. On slide 9, Bottega Veneta's revenue was stable in reported and comparable terms. In retail, the house posted a 5% increase, quality growth consistent with its ultra high-end positioning. The store network is stable as the focus is on elevating the experience through refurbs and tactical expansions. Fashion show after fashion show, Bottega Veneta nurtures its prestige, rooted in exceptional craft and creativity. The recent winter 2023 presentation was praised and garnered the highest ranking. Product-wise, higher leather goods sales are fueled both by pillar lines and the success of novelties. The Andiamo bag, which hit the stores in February, was sold out in a matter of weeks and is the object of a long waiting list. This value-driven strategy translates into higher AURs. Bottega Veneta priority is to amplify and replicate success across all markets. To heighten its visibility in China, the house will stage a repeat show in Beijing in July. Wholesale rationalization is ongoing, even accelerating, resulting in a 14% drop in revenue in the quarter in this channel. On slide 10, a summary of the performance of our other houses. In total, revenue was down 9% reported and comparable with contrasted trends by channel. In retail, revenue was up 7% with all houses positive, although to various degrees. Balenciaga clearly experienced a challenging quarter on the back of the controversy that impacted the U.S., the Middle East, and to a lesser extent, Europe. In some of these markets, the brand showed signs of gradual recovery along the quarter, while it enjoyed double-digit growth in Asia. Alexander McQueen's retail revenue was positive across regions and product categories, with ready-to-wear showing strength. The house, emphasizing its directly operated network, recently reopened its Paris flagship after expansion and extensive renovation. Brioni had another very positive quarter in retail in all markets, with a high level of bespoke sales. The house launched a capsule dedicated to women available in selected stores. In jewelry, all our houses achieved double-digit increases in retail. Boucheron once again posted an excellent quarter, fueled by sales in its stunning high jewelry collection, as well as from the house's well-established jewelry lines. Pomellato also delivered robust growth in Western Europe, Japan, and the Asia Pacific region. Finally, Qeelin took full advantage of the reopening of the Chinese market. The house recently enlarged its product offering with the launch of a bridal collection. Wholesale of the other houses segment was down 32% on increased selectivity in third-party distribution and switched to retail. This impact is amplified by the current environment in the U.S., leading to a more cautious approach to this market. Let's turn to Kering Eyewear and Corporate on slide 11. Revenue was EUR 433 million, entirely from Eyewear, up 44% reported from EUR 300 million in the first quarter last year. As you can see from the chart, we have a little bit of scope adjustment outside of the eyewear perimeter, reflecting disposal of remaining PPR legacy activities. The year is off to a strong start with comparable sales up 11%. Revenue rose in all regions, and all key brands performed well. Lindberg delivered solid growth, and we are very pleased with the significant contribution of Maui Jim, whose integration is working out smoothly. As you saw, Kering Eyewear further secured its supply chain with the announced acquisition of UNT, a supplier of metallic and mechanical components based in the French region of Jura, known for its high-precision industry. Kering is proud to contribute to the preservation on both sides of the Alps of key reservoirs of craftsmanship allied with advanced technology. To conclude, our first quarter remained challenging as we continue working diligently to strengthen our houses and invest in their future. Beyond the eyewear acquisition I just discussed, we are continuing to enhance and internalize our supply chain. Saint Laurent, 28,000 sq m facility near Florence in Tuscany should come on stream this quarter, while Bottega Veneta's new shoe atelier in Veneto has been operational since earlier this year. We are confident that the wealth of initiatives of our houses, a small selection of which I mentioned in my remarks, will enhance the appeal and exclusivity of their products and distribution and strengthen their positions in their key markets. While we are conscious that this might not yet be reflected in their top-line performances, we are more than encouraged by our progress, by our brands' rich product pipelines, and their strategic determination. Claire and I are now ready to take your questions. Operator? Thank you, sir. We will now begin the question-and-answer session. Anyone who has a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. We will pause momentarily while participants join the queue. The first question comes from Luca Solca of Bernstein. Yes, good afternoon, and thank you for taking my questions. I'm wondering if as part of the move to retail and the appropriate production of wholesale exposure, you're planning high-profile flagship stores. We've seen a number of exceptional flagship stores come to the market in the recent weeks and in the recent months. I wonder how you think about that and how you're planning to elevate service and in a way produce a shock and awe experience for consumers coming to your most important locations. The second question deals with the Gucci brand elevation. I'm wondering how Maria Cristina Lomanto is getting on with this program. I understand that this is a journey, and it's not going to change the Gucci profile overnight, but I wonder if you could potentially give us an update on that. The third question is on Bottega Veneta. I would've thought, given the prevailing quiet luxury trend, that Bottega Veneta could potentially be even growing further or higher than it currently is. I mean, clearly the retail performance is good. There's no discussion about it. I wonder whether you would also see higher opportunities for Bottega Veneta going forward, or if you have anything that is missing from that equation that you would like to point us out to. Thank you very much indeed. Thank you, Luca, for your questions. Regarding retail, indeed, you know that there is a clear strategy that was presented at the end of 2019 for the whole group, which is to increase the contribution of retail in our business, still working with key wholesale accounts as it is the case today now with Gucci typically, that will be, that is for the first quarter at 92% of the distribution made or directly operated. In that context, it's obvious that we need to upgrade, as we already mentioned, the quality of our store network. I think that globally speaking for our brands, we have already a good set of locations, but you need always to fine-tune. We know that in this industry, part of the investments we have to make, and it's not only about CapEx, it's also about brand statement, it's also about communication. You have to have some landmark stores, and that the reason why we are pushing our brands in that direction. You're right at the same time that that's part of the journey, but another part is also to be sure that we have in the stores the right profile of sales associates, not only the right profile but also the right number of people in each store. It's clearly an area, something on which we continue to work and to improve. If you remember well, it was one of the points we made about the plan we had for China, which was to train and to recruit some people in the store. That's part of the strategy across the brands, not only for Gucci, but I think globally speaking, which is to clearly have the right people in the stores, starting also with all the VIC corners of salon that we are launching or that we plan to launch at Gucci. That's about the strategy regarding retail. When it comes to the brand elevation and what's going on at Gucci, with the merchandising. As you know perfectly, Maria Cristina Lomanto started her new role in April 2022. Has been focusing since then her attention on three key areas. Gucci will return to the fashion calendar in 2023, with six collections, working very closely with the design teams and the supply chain in order to improve the time to market and also all the things around allocation of products by region and replenishment strategy. I can tell you that, based on what I saw during our last business review, that she's now at full speed in that way to work with the different functions. The further extension of Gucci's high-end offer across categories. You see that the recent launches we had in handbags are heading in that direction, but without, of course, forgetting to address more affordable categories, which does remain absolutely strategic. The last point, it's about the significant opportunity to drive Gucci's men and travel categories to reach their full potential. As you can imagine, part of the journey has been made when it comes to the travel business with a good, very good reception of the collection in travel, even if, of course, in terms of contribution to the sales, it's not yet sufficiently material. Still it's a brand statement here again in that direction. When it comes to Gucci Men, we had a show which was a demonstration that there was an inflection in terms of aesthetic with more high-end products. Obviously, of course, we'll amplify that once Sabato will be on board. What I can tell you is that clearly now Maria Cristina is very aligned and is working very hard with all the rest of the teams at Gucci, also with Suzanne, when it comes to the communication, to be sure that we have full alignment in terms of visual merchandising communication, and so on. I see what you mean about Bottega Veneta, and I think it's all this story around quiet luxury, which is indeed, I think without clearly exaggerating what could happen around quiet luxury, it's a trend and it's a fact. I think that we have some brands which are well-positioned to address that market. Of course, Brioni, but also Bottega Veneta, you're totally right. I could mention also Boucheron to a certain extent in that segment. We have also, in the other brands, an offer which is very relevant to address this new trend. That being said, coming back maybe to your first question, which was also very relevant, you know that there was a lot of things to do for Bottega Veneta, in terms of offer, in terms of architecture of the offer, in terms of style. It has been done. Now the next step is clearly to boost the retail, where clearly we are missing, we are a little bit limited by our retail network. That's the reason why probably we cannot fully exploit the potential of the brand today. We have some tactical moves with some refurbishment, extension of some stores with some new flagships as well. Clearly we need to amplify that trend, which is to be able to present in all the stores, the full assortment of Bottega Veneta. Another point which is important to mention is that at the time when we had a transformation at Bottega Veneta with a new style and a new aesthetic, it happened at a time when it was quite challenging to manage the Chinese or the Chinese market. It's clear that we are impacted by the fact, and we had mentioned it already during the full year results, that there was something to do in China to regain market share for Bottega Veneta. It's another obstacle so far, to deliver a higher performance at Bottega Veneta. Thank you very much, Jean-Marc. The next question is from Zuzanna Pusz of UBS. Good evening. Thank you for taking my questions. I have three. The first question will be on performance by cluster, especially the Chinese and the American consumers. Would you be able to comment on what was the growth for Gucci specifically, but maybe other brands? I think especially the Chinese consumer would be quite important for us in, given how comps are getting easier for the rest of the year. The second question is on your margin guidance. At the last call, you were suggesting that margins should be higher this year for Gucci, but also other brands. I was just curious, you know, whether you've changed some of your guidance or whether you still expect the margins to be up. I'm specifically asking about Gucci because I remember the inventories for the group were a bit elevated at the end of the full year. Also it seems that store network has expanded a little bit, I don't know if I'm right, but maybe the like-for-likes for Gucci are, were negative in Q1. Any comments on the margins would be very helpful. Finally on, and apologies again, Gucci, but would you be able to tell us what was the marketing spend for Gucci as a percentage of sales around the time where I think the margin was peak 41%? Where do you intend to end 2023, in terms of, you know, what was the A&P uplift as a percentage of sales from the peak margin, until, I guess, maybe last year or what you expect for this year? Thank you. Good evening, Susanna, and first of all, congratulations for your recent promotion within UBS. Let's start with some comments about the clienteles and the clusters. In fact, that's the situation is quite simple to explain. We have a clear recovery and even an acceleration on the Chinese cluster along the quarter, of course, due to the easier comp base. We had mentioned that we had a quite good start or decent start of the year across the board, but with a comparison which is not easy because last year in 2022, the Chinese New Year was okay. Clearly, month after month, and especially starting from mid-March, there was an acceleration in terms of trends in Mainland China, of course, starting with Mainland China, but also, of course, with more and more Chinese traveling, first of all, in Asia, and starting at the end of the day, first of all in Macau and Hong Kong. As a result, if we look at the Chinese cluster, the trends across the board, if we look at all the brands, they are all double digit up on the Chinese cluster, with clearly a shift of the traffic, or part of the traffic to Macau and Hong Kong. We consider that in Macau and Hong Kong, these are Chinese clients who could have boats also in mainland China. If we look at Greater China as a whole, all our brands are quite strong, and especially with an acceleration, sequential acceleration. When it comes to the U.S., clearly this is where the brands are at a challenging quarter with the American clientele. You see that the performance is negative for the first quarter, quite consistent with what we had delivered in Q4 of 2022, especially if we consider that Balenciaga had been impacted quite late in the last quarter of 2022. If we in a way restate from this situation of Balenciaga, the trends are very consistent. We see again some improvement along the quarter, but quite modest improvement. This is not the best tourist season for the American clients. Of course, we have a lot of American clients in Europe. The growth of the sales with the American clients in Europe is double to triple digit in some cases, but it's not enough to completely offset the weakness we have in the U.S. It's across the board. All the brands have a challenging quarter in the U.S. If we look at the other nationalities, globally, it's okay, especially with the Japanese still up. Japan benefiting, by the way, from tourism. In European, we have some, let's say, moderation of the growth, but still okay globally across the board for the European clientele. Let's move to your question about the margin. As you can imagine, it's a little bit early to make any detailed comments since it's a Q1 call. I would just say that we I don't know if we could qualify the comments we made at your end as a guidance, but we gave some indications. I must say that the Q1 has not changed so much our views on Gucci. Because at the end of the day, we had invested a lot in Gucci already in 2022. We will continue to invest. If we look at the OpEx, besides store OpEx, we have planned to increase the OpEx in H1, in H2, more or less in the same proportion. You can imagine that we are also betting on the sequential improvement of the top line. Based on our current views on for Gucci, we continue to consider that Gucci could see its EBIT margin flat to slightly up in 2023. We continue to believe that also Saint Laurent is in a position to improve its margin for this year. I think the only one comment I could make is that considering the magnitude of the wholesale rationalization we will make in the other luxury brands, and also with the recovery or the pace of recovery at Balenciaga, there could be some, it could imply some margin dilution at Balenciaga, and therefore, considering the contribution of Balenciaga to the other luxury brands, to the old segments. Just maybe to bounce back on one of your comments, the store expansion at Gucci, it's difficult to reason based on the store expansion, because you know that in store expansion you have always a mixed bag. We don't factor also sometimes the contribution of some pop-up activities, so the comparison is not always relevant from one quarter to another. I can tell you that what we have privileged in any case is quality growth and value over volume. Just to end on the A&P side, what I can tell you is that if we look at what was the percentage of A&P in 2019, and we compare to 2022, we have increased the A&P budget by two percentage points of sales. So it was a quite massive investment that we made. Considering that, as I was mentioning, entering to Luca, we have also, when we open some stores, especially some flagships, a sort of A&P investment with a strong brand statement, you see, you know, and you see perfectly that the boundaries between retail and A&P are more blurred than before. As a result, we had increased by 2 percentage points, and it should be more or less. We consider that in 2022, we were more or less on par with the objective we have, in terms of A&P budget, as a percentage of sales. Excellent. Thank you so much for the very helpful answers. If I could just follow up on the Chinese cluster. I understand you mentioned the Chinese consumer was up double digits in Q1. If we look at it on a 2-year stack, would you be able to tell us maybe if it was flat or, I don't know, slightly up or slightly down versus 2021. Sorry, I know it's a bit annoying, I'm being very specific, but it would just be really helpful for us given how the comp is developing for the rest of the year. Thank you. Yeah. Hello, Zuzanna. This is Claire. Your question is on Chinese cluster two-year stack, right? Yes. versus 2021 Sure, sure. It was up. You need more quantification? Like low single digits or anything like that. let's say, low double. Excellent. Thank you very much. The next question is from Thomas Chauvet, Citi. Good evening, Claire and Jean-Marc. I have three questions, please. The first one coming back to the U.S. As you said, Jean-Marc, the weak retail performance across most of your brand is quite similar to Q4. Not a real surprise also when you compare that to U.S. luxury credit card data. Could you try to dissociate the underlying market weakness from the Kering brand specific issues you've identified? And of course, how you're addressing those. Are you assuming also these demand pressures will persist for the rest of the year in the U.S.? Secondly, on inventories, which stood at EUR 2.5 billion at the end of last year, so a little bit elevated, I guess largely due to the revenue shortfall in China and the U.S. in Q4. Can you comment on how the inventories evolved after three now, nearly four months of 2023? My last question on your medium term plan for Gucci, you presented at Investor Day last June in Paris. Notably the EUR 15 billion in sales and the 41% EBIT margin medium term. Is the choice of Sabato De Sarno changing anything in how you execute the plan, in how you think you will achieve those targets? I'm thinking in particular of the slide you showed back then on the mix ambitions, if you remember, you know, in terms of product, gender, generation, geographies and so on. Effectively the plan was there, and Sabato has been hired because he fits in very well with the plan and so it will be pretty unchanged in terms of executing that. Thank you. Thank you, Thomas. Let's try to elaborate a little bit on the U.S. If you look at the data brand by brand, you see that it's a weakness that we have across all the brands. Of course, Bottega Veneta being a little bit above the rest of the other brands. I don't mention Brioni, which had a quite good quarter in the U.S. because of the bespoke category. Besides this, it's quite, let's say, coherent, consistent across the board. I think, obviously, it's very difficult to, of course, to say that it's all about the aspirational clientele, because we know that some also, some other aspirational segments outside of the luxury business had a quite decent quarter. Maybe there is a question also of allocation of wallet among the aspirational customers. What we can say when we look specifically at luxury, the categories or the price clusters, the price segments that have been the most affected by the situation in the U.S. are the aspirational ones. Another point which is important to stress is the weakness of the online business. The decrease of online sales are clearly above the decrease of the sales in the stores. By the way, the traffic in the U.S. was up. There was a question of conversion, clearly. It tend to demonstrate, first of all, that clearly, there was a weakness of the demand of the more aspirational clients. We see that among the top clients, we continue to grow in the U.S. The opening of the salon in Melrose Place, even if it's very recent, so it's very difficult to extrapolate, but it was a tremendous success, a great result, and very happy with what has been done. The fact that Brioni and Bottega Veneta are doing slightly better, it's a demonstration that clearly the weakness is relying in this more aspirational cohort. Even if it's important to remind that we continue to perform something like 60% above 2019. The fact that the situation in the U.S. has changed and it has become a very important market for luxury or even more important than before, we still believe that there is a potential to continue to grow in the U.S. Another point I could make also about the U.S. is on the differences by region. In fact, there is not a clear trend if we compare the performance region by region. It's very difficult to extrapolate based on the performance by region. What I've not mentioned of, as regard the U.S. is that, in the wholesale it has been obvious that, the U.S. we are very challenging. Clearly we observe the reduction of the orders of the American department stores, which is not necessarily a big problem for us because it does clearly push us to amplify and accelerate the wholesale rationalization in that context. We are working now to clearly engage even more than before with these more wealthy clients. Still, we also work to be sure that we are in the offer across all the brands, the right offer for the more aspirational client, because we are convinced that at a point they will come back. Just to conclude on the U.S. side, don't forget that we will have to some easier comps at a point in the year starting, by the way, from mid Q2, where last year we started to see somehow a form of deceleration. Regarding inventories, I will start first with a few comments on inventories. Reminding first of all that it's important that in 2022 and still in 2023, we have increased the share of carryovers and permanent styles in inventories. We are quite happy about what we did in terms of management of all inventories. That the reason why we consider that we have the right level of depreciation rate, which is, by the way, very coherent with the rest of the industry. That being said, it's not only about an accounting matter, it's also about, of course, an operational issue. There, clearly, we are still at the level of inventories, which is very comparable to the one we had at the end of the year, in the sense that we had not yet completely revised the Open-to-Buy for the beginning of the year. The work now, which is at stake among our brands, is to work on the Open-to-Buy, and we have some better, or we work to have better predictions in terms of sell-out. We also see some brands ready to take the risk to have waiting lists. Typically, what Bottega Veneta decided to do with the Andiamo bag was clearly to focus first on the sell-out, and quite successfully. We have a record sell-out with the Andiamo bag, so it should contribute along the year. That's the plan, to reduce the level of inventories, but it's not yet the case at the end of Q1. Finally, regarding the plan we had for Gucci, I know that there may be some skepticism about the objectives we have set in our previous presentations about Gucci. If we take a step back and we look at what Marco presented a few years ago, what he presented recently, I think that we are delivering some of the parts of or some of the blocks of the journey. If I think about the elevation of the AUR with the contribution of mix and price increases, fundamentally, compared to what we have presented during the last Capital Markets Day, we are there. We have not necessarily yet the traffic up. The traffic is up, but not necessarily the volumes are back to positive territories. We expect that along the year with the improvement of the in China, we should start to turn positive also in terms of volumes. We are implementing gradually what we have announced. Another point which was about the retail contribution, the opening of new flagships and so on, it's exactly what we are delivering. When the roadmap was presented to the different potential designers, including Sabato De Sarno, the playbook, the roadmap, were completely aligned with the strategy that has been presented during the Capital Markets Day. Concerning the size of Gucci, there is no reason to completely or dramatically change the breakdown of sales between categories, to completely change the strategy. What is at stake is clearly what we need to do in terms of products, merchandising style. When it comes to the overall strategy or strategy conditions, we think that Sabato will be the perfect match with these ambitions we have presented. Thank you, Jean-Marc. The next question is from Melania Grippo of BNP Paribas Exane. Good evening, everyone. This is Melania Grippo from BNP Paribas Exane. I have 3 questions. First, the first one is your pricing strategy. I was wondering if you have implemented any price increases year to date across your brands, and if you could please give us any detail on Saint Laurent, momentum continues to be quite good. Could you tell us more on the drivers behind the brand in the quarter? I mean, price, mix and volumes. Finally, on your Gucci Salon in U.S.A, I don't know if there is any qualitative feedback you can share with us. You said it was a tremendous success. I was wondering also if you could give us your definition of big customers, I mean the threshold above which you consider a client as such. Thank you. Hello Melania, this is Claire. On the pricing strategy, you know, in Q1 there has not been any, I would say, changes in the pure price. I'm just talking about really pure price increases across the board. You remember that for most of our brands, we did pass significant price increases last year for some of them, also at the end of last year. We were not planning, to be honest, to do big moves in Q1. We just mentioned maybe for Gucci that very, very end of Q1, so end of March and early April, there has been very selective price increases. All in all it's gonna be a very low single digit on very, very specific, sorry, SKUs. That's what I can say about the pricing strategy. When it comes to Saint Laurent, I mean, we don't disclose the breakdown in terms of volume slash pure price slash product mix. I think as always at Saint Laurent it's quite a healthy growth. There is some contribution in terms of traffic and volume. There is clearly a big work being done at Saint Laurent on the value component. The value implies of course some pure price increases that the brand passed at especially last year, and that quite significant pure price increases on some carryover lines. There is more and more of a mix component. You remember probably we mentioned already last year a few times the Icare bag, which was the first really high-end price point of the brand in the handbag segment, clearly well above EUR 3,000. I think now the pricing for this one is EUR 3,900. There has been a new introduction recently. I let you browse on the website and find the new introduction, it's another, I would say quite big handbag and big comes with a high price point too. The brand is definitely now successful in getting traction in this higher price point. On the last, on your last question, you can imagine that the concept of salon, it's like high jewelry. We know that in terms of contribution to the sales, it's not necessarily a game changer short term. In terms of image, in terms of engagement with key clients, key clients which are also some ambassadors for the brand, it's absolutely key to invest there. First of all, L.A. was the first salon to be opened, but you will have some openings to come in the year in the key destinations. I won't list all the cities where we will have the opportunity to open salon or let's say, quite large VIC rooms or floor. That's part of the strategy. Qualitatively, what we can say is that it's very difficult to say because we know that some competitors have more or less the same concept. What we see is that in terms of sales per day, we are reaching a very high level. Here again, it's difficult to extrapolate because we have opened the store very recently. We had a very positive response of some key clients when we invited them to come, because of course as you, as you can imagine, it's based on appointment to improve or to have a top quality of sales. Of course, I will not enter in the details of the classification of our clients by type of purchases, if it's about repeated purchases, the level of spendings. Like all the other brands in this industry, we have a classification of the clients with some of the clients at the top of the pyramid representing probably something like less than 5% of the clients in terms of number of clients, but which are contributing to a very significant amount of the sales. This amount that we need, we want to continue to grow, because it's clearly a way to improve the resilience of the performance of the brand and to increase the level of loyalty. Thank you. Thank you both. The next question is from Chiara Battistini of JP Morgan. Thank you very much. Good evening, Jean-Marc and Claire. Just I have really follow-ups. The first one, maybe on China and Gucci. I was wondering, besides the reopening, can you discuss a bit the actions, initial actions of the new management team on the ground has been taking and the priorities there besides capitalizing on the reopening? Also, sorry, on the Chinese cluster, a clarification on your comment, Claire, about the growth in low double digit territory versus 2021. Was that a comment for the group or for Gucci specifically? A question on APAC about Bottega Veneta, please. If you could comment on maybe give some more color on the different countries as APAC was particularly weak for the brand? Maybe if you could help us understand Korea versus China there, please, as well? Finally, a curiosity on the China reopening. As you have brands spanning across different categories and different price points, I was wondering, are you seeing within the reopening the consumer preferring being driven mainly by brand momentum versus categories, and or different price points specifically? Thank you. Yeah. Hello, Chiara, this is Claire. I'm just going to jump on the clarification. It was for the group, my comment on the Chinese cluster on the 2-year stack. What I can say is that it's also positive for Gucci, but I will not quantify brand by brand. Thank you, Claire. Chiara, starting with the actions of the management in China, I think it's very important to say that as we mentioned during the full year results, that it's, we are looking at long-term objectives. We cannot regain massively market share in few weeks. All the action plans from the management, it will take some time to implement. We had mentioned that the priority and once again, I refer to the question of Luca, which was very relevant. It's about the management of the people and the management of the talents. We were missing some talents in China. We are fulfilling some gaps now, but we are not yet there. Talents in all key functions, in the stores, but not only. We need to reinforce the work, the structure we have in place in China and the quality of the people in the stores. We need to continue to elevate the brand perception. Of course, you can imagine that the exhibition that will start in few days in Shanghai, which is really a unique exhibition, it's really brilliant, will contribute to elevate the brand perception, but it will be not sufficient, as you can imagine. We have a lot of other actions around that, with also now more celebrities, more communication, new ambassadors, not only from China, but also from Asia, but with an impact on the Chinese market. We need to enhance retail experience. We know that the brand had been quite weak compared to some peers. Here it really does tie to the quality of the distribution and the quality of the people I've mentioned before. Of course, there is a need to fine-tune the product assortment and merchandising. It's a global, it's something that has to be made at group, at brand level, but also more specifically for China. All the initiatives that we are pushing now, they will not pay off immediately. Some of them will pay off. We start to see some positive feedback about the recent introduction, about the new collections. Quite encouraged by what we see, but we know also that it will take some time to improve the quality of the distribution or to refocus more on full price stores. That's a priority, but you can imagine that it cannot be done overnight. That's what the I can tell you that Mr. Bizzarri and the Gucci team spent some time in China recently to visit the teams, to encourage the teams. It's a work in progress, but we start to see some encouraging signs across the different stores. If we now, we jump on Bottega Veneta and Asia. I think that overall China, as we mentioned before, this is a market where Bottega Veneta has to invest more, a little bit in action plan, like I've described for Gucci, but also of course, with a different, let's say, approach, because it's not a brand which is fully comparable. While in Korea, Bottega Veneta did extremely well in the past few years to an extent that in a context where we had also some shift of customers to other countries in Asia or outside Asia, especially in Japan, has penalized the performance of Bottega Veneta in Korea. It's true that we have two big markets, which have been quite challenging for Bottega Veneta, in Asia. Your last question, Chiara, was on China reopening, whether it's about brand momentum of categories, what we see? Yeah, and also if you see maybe different performance across the different price point. There have been reports that maybe the higher end is doing better in the recovery versus the sort of more aspirational mid-price kind of points. Any evidence you have seen so far, either by brand momentum or categories or yeah, positioning? Thank you. It's pretty difficult to say, to be honest. I think, of course, brand momentum is playing a part. I mean, Jean-Marc mentioned about Bottega, you know, about Gucci also, we just elaborated on the two brands. We know what we have to do to regain momentum in this market. Clearly there are action plans in place to gradually, I would say, regain traction. You probably have in mind that Bottega is also going to have a show in Beijing in July. There are lots of initiative around ambassadors, et cetera. Clearly that's going to participate. By categories, yeah, I think we are seeing good traction across, I would say, shoe category. We are seeing good traction also around leather goods. What does it mean? I mean, time will tell. I'm not sure for now we have sufficient data points to analyze whether it's younger, aspirational, higher end clients that are coming back sooner or later, let's say. Great. Thank you very much. The next question is from Louise Singlehurst of Goldman Sachs. Hi, good evening, Jean-Marc and Claire. Thank you for taking my questions and for all the details we've had so far. Two brief follow-ups for me, if I can do, please. Firstly, on domestic Europe, I suppose Europe has been a key surprise so far for Q1 across the peers. It's been very strong. Can you help us understand the mix between domestic and tourism? If there's anything to highlight particularly on the domestic side between Q4 and Q1? Secondly, just going back to the U.S. performance, given what we've seen between Q4 and Q1, fairly stable performance and the comp base going forward, is it fair to assume that Q1 is going to mark the trough for Gucci brand in the U.S. in Q1? Thank you. Hi, Louise, this is Claire also. I'll try to start on the Western Europe and probably Jean-Marc will jump in a bit later. I think on Western Europe, the only thing we can say really is that the locals are still the majority of the sales. I think Jean-Marc mentioned it already. Of course, we are seeing very strong increases in tourism. Once again, locals are still more than 50% of the clientele in Europe. By region, by country, let's say, in Europe, I think we're seeing a bit of good traction overall, rather in southern part of Europe. Italy probably is fine. I would say France is fine. It's a bit more difficult in the U.K. I think that's the only thing we can say. When it comes to tourists, I mean, we are still seeing good traction that Jean-Marc mentioned already. It's not a very high quarter for Americans, but it's, they are still performing very well. Middle Eastern, of course, still. Asian tourists, quite other Asian, if I exclude mainland Chinese, although we are starting to see more and more mainland Chinese coming back to Europe, it was mostly individuals first. We'll see how it will evolve in Q2. I think that's what I can say about Western Europe. Maybe what I could add is that clearly the tourism has clearly contributed to the good performance of Europe. What we continue to see in Europe, a little bit like in some other regions and especially America, is a good performance with clients above 40 years old or let's say starting from 30, 35. So probably some clients with higher purchasing power. Here again, because of the inflation, and we see that particularly in some countries where inflation is hitting hard, some categories of the population in the U.K. or in Italy, that among the young clients, there is some moderation or even a decline of the performance. Now, looking at the U.S., it's always very difficult to make some predictions, especially in that context, and we don't know exactly, of course, the market will depend also on the evolution of the macro in the U.S. It's fair to say that across the board, the comparison base is easier starting from mid Q2, not only for Gucci, but particularly for Gucci. While for Balenciaga, we can expect some gradual recovery and improvement along the year. To bet that Q1 was a trough, it's quite difficult. Theoretically, you're right, but we don't know because of the evolution of the macro. While it's true that at the same time, it's not because of the current situation in the U.S. that we don't invest in the U.S. for the Gucci brand. by the way, the opening in to give a priority to L.A. for the first salon is a sign that it's a market which is still absolutely key for the brand. We continue to invest in that market. We'll see if the combination of easier comps and all these invest- Will help the trends in the U.S. in Q2. Thank you very much. The next question is from Aurélie Husson-Dumoutier from HSBC. Good evening, everyone. I have two questions. The first one is on the U.S. again, sorry for that, with Yves Saint Laurent, which is down 13% in retail. I was wondering whether it was the result of the price increase you passed on in Q4, or is there anything else happening at Saint Laurent? I have also a question actually on Brioni. I know it's small, but I was wondering if you could give us some ingredients of the recipe for the recovery of that brand and why not try women. If maybe there are some experiences that you've done at Brioni that could be extended to some other brands. The final one is for the other brands, the performance in retail of +7% in Q1, would it be possible to have it excluding Balenciaga to see how much the Balenciaga issues have affected the performance? Do you feel that these are over now? That would link me to the final part of my question, which is, what can you tell us about the current trading and how April started, if there anything to tell about that? Thank you. Thank you, Aurélie, congratulations for having ask theoretically two questions, and finally, five questions. I will try to go fast on each of them and try to answer. On Saint Laurent, I think obviously that, as you know, also the brand has been very strong in the U.S. for now several years with very strong performance across the regions and in a very constant way, manner. Clearly, I think that we have different situations. First of all, clearly, very demanding compare. Point 2, clearly some reaction to the price increases that we had already mentioned in Q4. At the end of the day, the market will absorb it, and we see already month after month, some sequential improvement there, showing that the market start to digest these price increases, but which was anyway needed considering the elevation strategy we have for the brand. As I mentioned before, also, clearly, the online channel suffered a little bit during the quarter, like the other brands. Like Gucci, let's say, Saint Laurent was quite mature in terms of penetration of online and has been impacted by this. That would be the main explanation for the performance of Saint Laurent in the U.S.. Brioni, I think the recipe is, first of all, let's remain humble. We are going in the right direction with Brioni. We are very happy with the achievements already last year, also even more on, in Q1. The recipe is quite simple, is that there is a clear direction both at management level, but also at the creative level. That the brand is super clean in terms of positioning. We have also streamlined the network to be more efficient with a different format, which is more productive at the end of the day. In a way, now that the brand is a little bit more stabilized, we start to push some new categories. We have a quite successful development in fragrances. In a way, the women capsule was a way also to engage with new clients or to attract or to create some events in the store so that we can engage with more clients. I think what we can learn from Brioni, as we can learn from Boucheron and some other, with this experience of high-end, it's about the quality of service you can provide in the store. The importance to have clienteling activity, to have a lot of events in the store. That's the reason why I think we That's what we can learn from Brioni. On the other brands side, you can imagine that we won't provide any additional details. What we have mentioned that our jewelry brands grew double digit. You can imagine that, and we mentioned that Balenciaga was positive in terms of retail. I can just tell you that it's slightly positive, but which is already an achievement, consider what happened at the end of the year. I don't know if your question about current trading was something generic across the board or more specific to Balenciaga. I was wondering whether you consider the issues at Balenciaga are over now already? Okay. On that point, let's say that, as I mentioned during my speech is that the Balenciaga is doing extremely well in some key markets, and I'm thinking about Asia Pacific, where clearly the controversy has a very little impact. The two markets which are more impacted are the U.S., U.K. and Middle East, where we see some improvement, but we are not back to a positive growth there, with something that should rather happen in H2. While in continental Europe, we start to see a normalization, and we are positive again. I think the Q2, as we mentioned, will be positive. It's what we can guess so far regarding the current trading, but we are quite early in the quarter. Let's say that it would be completely behind us, probably, rather in H2. Thank you very much. The next question comes from Edouard Aubin of Morgan Stanley. Yeah. Hi, Jean-Marc and Claire. Three quick ones. I mean, relatively quick ones on Gucci to follow up. The first one is in China, Gucci China. We are at the end of April now. Have you noticed any type of underlying inflection between the first two months of the year and March, April versus 2021 at the Chinese cohort? I mean, there's talk about Gucci sales picking up a bit in recent weeks, just curious to have your views there, number one. Number two, Jean-Marc, you talked about the brand elevation journey at Gucci, which I guess is multi-year. I mean, Gucci is clearly more exposed than other brands that to outlets or Hainan in China. Do you have a plan to reduce your exposure to these channels or not? Be curious to have your view as well there. Lastly, on, to follow up on a question asked previously, but on the store network in the U.S., I mean, Gucci has increased its store network by 14% year-over-year. Your organic sales were down 19%. You had, you know, identified, you know, white space pockets of wealth like Austin, and I think you opened in the Meatpacking District, and you follow suit, you open stores. Are we gonna see a moderation of your store opening program for the remainder of the year at Gucci? Thank you. Yeah. Hello, Edouard. It's Claire. If I got your question right, your question is about the China for Gucci on a two-year stack month by month, right? Well, yeah, grouping January, February and then March, April. I mean, are the first, last two months of the year, you know, better than the first two? Okay. No, I got it right. I'm not going to answer on a two-year stack, to be honest, Edouard. I'm gonna answer on a year-on-year basis. I mean, it's not going to be a big surprise for you. For sure, March, April are clearly accelerating in China for Gucci. You remember we said that we had a good Chinese New Year on not so easy come base in January. February was a bit more mixed because we had the calendar effect of Chinese New Year. Then of course, gradually it's accelerating in March. The comments still applies of course for April. Of course the base is easy, but I will not comment on a two-year stack. Regarding a outlet, I think we have been very clear in the past few years saying that the priority for us was to improve the quality of the distribution by focusing on retail and by reducing wholesale. We always say that the outlet channel, as long as it is well controlled, it's a way also to manage old items inventories and to avoid any sort of destruction of products, which is now something completely forbidden in many jurisdictions. Going forward, nonetheless, it's true that there is a question of, let's say, consistency of the brand, we cannot at the same time elevate the brand and to keep too significant outlet exposure. Going forward for Gucci and for the other brands, as we did in wholesale, it will be a group initiative to look at the trajectory aiming at reducing the exposure to outlet. Still considering that to manage all old items and old inventory, that's something that can be kept, but clearly in terms of percentage of stores in the network or percentage in the sales without giving further indication, it's something that will be also managed and reduced going forward. Finally, your question about the U.S. store network. In fact, there was a wave of openings between 2021 and 2023. We have not in the pipeline many more openings, so we will continue to open tactically, especially at a time when, as I was mentioning before, the wholesale business is contracting, opening some opportunities in some cities. We will continue to have some openings in the U.S., but clearly in terms of additional space, if we look at square meters, it will be of course reduced and with a moderation of the space expansion. I'm conscious of time. We have still a lot of questions. We try to take as much as possible all the questions, but we are not sure that we need to stick to the timing. Maybe I will try to shorten my answer. If you are on your side, you can focus on the questions which have not been asked yet. The next question, sir, is from Thierry Cota of Société Générale. Yes. Good evening, Jean-Marc and Claire. Two questions for me. First, clarification on Gucci. Am I correct to understand that you expect OpEx about mid-single digit growth this year at constant currency? When you expect a flat to slightly up margin, implicitly you do expect at least 5% organic growth for the brand for the year. Am I correct in that reasoning? Secondly, back on wholesale that you've explained, the resizing process which is ongoing across all divisions, but Gucci, do you have a target of where you want wholesale to account for in terms of the revenues for each division? Is it different from one to the other? Do you have by division a sort of timeline of where and when you think you're gonna be getting there? I'm just trying to measure and time the kind of revenue headwind we're gonna have from this wholesale resizing for the different segments. Thank you. Thank you, Thierry, for your questions. Starting with Gucci. Yes, definitely, I think we have been in this year that you could qualify as a year of transition, it's up to you, but it clearly we had been very also humble in our ambition for this year. Maybe we will do better, but for sure, something which is reasonable in terms of ambition was concerning what was the year, what was 2022 was to target mid-single digit growth for the top line. We have built our ambitions also in terms of a bit based on that. Yes, you're right to consider that we would guess that we'll have an increase to the same extent of the OpEx. We see quite good balance between H1 and H2. As regards wholesale, the target is not necessarily in terms of percentage of sales, which would be absolutely not, I think, smart. It's more about the number of accounts we want to work with, the quality of the distribution with this account. You're right that at the end of the day, depending on the brand positioning, its product mix, you can have different approaches, and as a result, different number of wholesale accounts and then a different percentage of wholesale in the total business. What we can say is that now at 92% of retail, which is more or less where it should be, maybe it could be slightly higher, but we are more or less there. We can guess that for the three All the big brands, Saint Laurent, Bottega Veneta, Balenciaga, we should reach quite rapidly, and probably by the end of the year, something around 85% of resales through directly operated network. Should we go above, we will continue to work to assess if there is a need to be even more exclusive. Already 85 is a major step for this year. It does imply a double-digit decrease of the wholesale business for all the brands, Balenciaga, Saint Laurent, and Bottega Veneta. We are targeting something rather -25% on Bottega Veneta. We keep an ambition of -10%, around -10%, -15% at Saint Laurent, or -20%, sorry, -20% on Saint Laurent and Balenciaga more or less in the same, in the same range. What you're saying that by year-end you're gonna be more or less done, you think? The bulk will be done. I can imagine that by the end of the year, and, or let's say mid 2024, we should be on the more normative side of the wholesale business for these three brands. Definitely. Great. Thank you. Thank you, Thierry. The next question is from Charles-Louis SCOTTI of Kepler Cheuvreux. Hi. Good evening. I have one question. I'm not sure that you will share this information with me, but you said at the beginning of the conference call that the retail performance has improved sequentially throughout Q1. Any chance you can share with us the phasing of the growth and more specifically, the exit rate in terms of retail organic sales growth at the group level in March? Thank you. Well, usually we don't give monthly performance, Charles Louis. Let's say that it's, I mean once again on easier comps, so having to keep that in mind, we were double digit in March. Okay. Thank you. Thank you very much. Bye-bye. The next question is from Rogerio Fujimori of Stifel. Hi, Jean-Marc and Claire. I I have just one question about the Gucci brand elevation. For the carryover part of Gucci, have you seen mixed gains, positively contributing to growth? Or put differently, are the higher AUR categories that you're emphasizing outperforming the lower AUR categories? Or have you seen the new high-end offerings for bags outperforming the enterprise and bag offer? Thank you. Hello, Rogerio. No, I think, you know, in the your question is not that simple because you have carryovers. You've probably seen that the merchandising team and the team of Gucci, at Gucci have recently introduced quite a lot of newness. I can give you quite a long list of new bags, both in H2 and early this year in Q1. Most of them of course are benefiting to the mix component because they are tapping into higher price point. Now, to be very clear, we also have introduction in, I would say, entry mid-price point, because we need to ensure this balanced pricing architecture for the categories. What I can tell you is that both carryovers and newness are contributing positively to growth, this quarter. This is true, I would say, across the, I mean, the main regions, where we are seeing growth, the two are really contributing. Okay, thank you. The final question is from Oliver Chen of TD Cowen. Hi. Thanks, Jean-Marc and Claire. On the Gucci brand, you mentioned allocation, replenishment, and inventory management. Would love your characterization of that opportunity relative to brand elevation and realizing that they're not mutually exclusive. Second and final question on the conversion rate, are there any characterizations of the conversion digitally relative to the traffic and conversion in your own stores physically that are noteworthy in terms of what you've been seeing? Thank you. Hello, Oliver. Could you just maybe clarify a bit the first question, make sure we understand properly? I was curious about the opportunity ahead with inventory management and logic and supply as you think about planning and allocation and speed and replenishment, and how you would contrast that with what you're doing, you know, creatively to return to classic and elevate the brand. Another way to ask that is what inning you're in as you think about allocation, replenishment, and inventory management and agility and speed, and how big of an opportunity is that, or not? Thanks. No, I think definitely it's an opportunity. I think that we should not forget that we have made in the past few years, huge investments to elevate or to upgrade our logistics and our information systems. That was absolutely needed to have clearly a clean backbone to coming from a time when we had different systems, some obsolete solutions. Clearly to improve the quality of all the support functions was absolutely needed. Now, clearly, we have gained in terms of agility so that we can have a real-time information about the inventories. We can as a result, have more, let's say, more 360 approach. We More an omnichannel approach so that we can order in a store and then deliver to home and so on. I think we have gained in terms of efficiency. We could gain even more, and that's exactly what is the next milestone for us in the journey, which is about first having better predictions of the sell-out, so that we can clearly phase the production in order to be more agile and to improve the sell-out. The reason why we need to work on the supply chain side, I think it's a big theme now in this industry, which is to be strong on the supply chain side, to gain in terms of flexibility. The more you internalize, the more flexibility you have, both in terms of product development, product quality, and then you can launch some smaller batch of products in terms of production, here again, to be more agile in terms of replenishment and supply. It will be a way, clearly, to improve the sell-out and to manage better inventories. No, clearly there is an opportunity. It's not as if we had not invested in the past few years, but now we have the right setup to improve further. When it comes to the conversion, let's make the difference between online and store, physical store. In the offline channel, what is happening is that clearly the traffic is up across almost all the brands and across almost all the regions. Brand by brand, you could find some regions where the traffic is flattish or sometimes negative. Overall, the traffic is up, meaning that there is in all markets much appetite for luxury products. The more traffic you are, generally, you have an impact on your conversion rate because some people will not buy. You have some specific situations which can be linked to the offer, the quality of the staff in the store, so that it can have an impact on the conversion rate. Clearly on that side, this is something we need to work on to stabilize, let's say, the conversion rate in the store. When it comes to digital, clearly the conversion rate is, I think, quite comparable or let's say, quite consistent with the conversion rate we had in the past. Here there is a question of traffic, with less people coming to buy online. The conversion, you know that the conversion rate online is fundamentally different from what you can see in the store. It's lower. Sorry. We are happy about it. Yeah. We are happy because we see people coming rather to the stores, which is good also. The conversion rate in online has not deteriorated so massively. There is more a question of traffic. Okay. Yeah, maybe last point. I had one- One. Yeah, one quick one. Sustainability, you've been a leader there. What do consumers care about most? I know this could be two hours, but, from a consumer perspective, anything that you would wanna mention in terms of demand and the ability for the consumer to really value that, and/or, you know, younger versus older consumers? Thanks a lot for taking my questions. Best regards. Thank you. In fact, it could take hours, indeed. I think, what is important, it's about, I think. Something I would mention is traceability. How we source, the raw materials, then how the products, are manufactured. That's really, what is important for, the young customers. Not only the young customers, by the way, but mainly the young customers. Globally, the impact on the planet, meaning the use of natural resources, which is really important. At least when there is an impact, how we can offset that impact through different initiatives around regenerative agriculture and other initiatives of this nature, initiatives to offset CO2 emissions and so on. Of course, questions around, you know, alternative materials we are working on. That's the reason why we have R&D around alternative materials, and we are investing in some startup, is to find alternative materials. We cannot really say that it's necessarily an engine for additional sales, but it's more and more a question that the clients are asking. Just to close this circle and coming back to the initial question of Luca, it's all about training our sales associates so that they can have that type of discussion with the clients. Thank you very much for all your questions. We were very happy with Claire to be able to take all your questions. It was a long session, and sorry for that, and thank you for your patience. Thank you all for being on our call and for your good questions and very relevant questions. Please note that we will report our 2023 first half earnings on July 27 after market close, with a conference call scheduled for 6:00 P.M. Paris time as usual. In the meantime, as always, with Claire and our team, we remain fully available to answer any questions you still have. We wish you a very nice evening or day. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.