The Clorox Company (CLX) 1 Nov 232024 Q1 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Clorox Company First Quarter Fiscal Year 2024 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. At the conclusion of our prepared remarks, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, Ms. of for President Clorox Vice Burhan, Investor the Relations Company. Lisah Ms. may begin you your Burhan, conference.

Good thank afternoon, us. Jen. you, Thank and you joining for

then On opening both CFO. just will me take and with review website. our we'll had the In Rendle, and to comments, are call CEO; prepared share available release our our remarks, a are chance Linda Kevin which questions. hope a a I Linda our and moment, earnings few everyone of has your Jacobsen, today on

call, we fiscal but or this management's are may During results including make expectations about XXXX based forward-looking our may current statements actual statements, differ from outlook. These outcomes. on

certain which In with that various Please financial factors measures. the have the affect SEC. which addition, refer refer forward-looking such been identifies we could to filed statements, non-GAAP forward-looking may to statements section,

non-GAAP a to in financial section please directly for website Relations the our addition, measures. Investor measures financial comparable supplemental the financial In the GAAP release schedules the to earnings reconciliation non-GAAP information most of our and of refer of section

it to Linda. Now I'll turn over

lives. thank maintain you while is margins. pricing and value the This our priorities by share improving superior daily volume including brands our actions. attack, Prior and the entered the and on our us. testament quarters consumption strength trends, our lapped play progress joining with with growth role momentum, everyone, Hello, market solid we year with in supported fiscal our year track ago consumption expectations strong to several consumers' of as they past and cyber August over a the top on We line to XXXX for to rebuilding performance was

and including our to we addition, cost optimization. savings chain realize continue In margin-enhancing supply from initiatives, benefits pricing,

impacted the attack disruptions, wide-scale cyber adversely first which caused financial our quarter performance. operational However,

executing priorities were of not distribution laser-focused over our a inventories ultimately coming in when out preserving will back rebuilding this path we to immediate we're can possible, drive confident time. on cyber to share as demand to We've distribution operational and and take just products. We're extraordinary some we our normal, we our so and again, on we the as We're attack. for given relentless regain our of the now in on strategy as solid quickly back excellence prior are improving recovery, do marketplace. the the with our time, supply earn of yet growth on the win to IGNITE trajectory rebuild While and strength brands, we relevance focus and of space to following but retailer shelf our did and activity the inventories, restored value that superior to merchandising our teams ability execute pandemic, and our return to the proven of

we near streamlined hallmark As and our margins. to rebuilding in remain long-term and our committed savings line advancing growing driving we innovation the strategies which digital investing model. brand navigate building, our top and and operating transformation for term, program cost the includes

change the not story. ahead, Looking Clorox does last few the disruption of months the

questions. With brands As and share confident regain recovery consistent and our in strategy your our growth of deliver take IGNITE we profitable portfolio categories to market enable I exit leading over our us that Kevin will efforts, we're time. and will essential that,

with Grom Our come [Operator first Instructions] UBS. will question from Peter

Thanks, good afternoon, operator, and everyone.

the drivers us just XQ seem commentary. then get there just through behind maybe the context back in gross Maybe to Can was hoping actually that for half implied to some the but it's perspective, performance still decline the on with nicely sales range, in some reasons flat be I guidance to margin start know phasing does a Is are in that? Or that wide of I a just conservatism? gross the some push margin color you of XQ. the year? it key in would And the Kevin, to up XQ imply year. from So of the walk a the in

thanks the Yes, to, And questions. Peter. for happy

X Let and and and we talk these how in go with out about playing to phasing assumptions see QX it start in really margin what pricing, have me which is as last pricing. seeing we August, keep pricing mind as as you gross thing X we've quarter rounds know, of we now -- relates lapped not took of is talked we're we changed The forward. rounds since that of sort may -- X in to

moderate start round of we'll fourth by the to going the the throughout move you're quarter. to as benefit fiscal see this of lap end the to So we and pricing continue year,

so as we'll get of half we into of longer back the And the the have year, no pricing. benefit

still we're internationally. Now pricing taking

XXX quarter, about to pricing is So seeing. margin our benefit degree to you not an points. there'll be worth if the you're but some at look benefit, basis And example, recent most as

nice a go see moderate So through you'll year. and the contributor as that we

belief a see And assumptions. levels. then in the is going change is highlight other item And our I again, merchandising our increased this we're would to is not

about operate business. Typically, We XX%. of continue pre-pandemic XX% below we levels. merchandise our And last to we ended year, XX%, about up

we as continue expect forward. increase we go so to And to that

low pressure we're lastly, of assumption merchandising the that that see that's increased levels see year consumer our support believe more under the margin. the continue on the of going half back we in a put to will half And a to so that pressure in year. is And of back we'll then

loan, to that talk our categories. consumers. And and put the about on the of bit for on pressure pressure return paying is typically, a rates little all that puts And reasons will know you interest folks student payments, increasing we a

the that usually, margins since beginning X as assume everyday Now an result little year, pressure well. based continued that's nature could as on the X not points the see a categories bit consumption a of a and of it's down that. being we've you our of But essential or significant impact. assumption And to categories, will

on And sales the our sales deliver little a would sales, to about range. expectation half. that's XX% that which we Obviously, for bit QX, you talk flat we basis, saw the back if folks Now high is in wide were down the being on project digits. back in a to down fairly grow half year And the digits, single a mid-single reported QX.

we've distribution rebuild control. a we and recovery have pace rebuild it's macroeconomic in fully that, to think there variability of uncertainty the not we totally we additional function our both in we're that recognize expect with exact and but how the some the some will out the be share working plays of lost, I it's of the But variability this then consumer. is to about

so is do. well. But that performance we on And are Peter, predict think, will to Cyber most of back difficult important result is our the impact a rebuild as of that will that have confident a share Event. quite exact recovery what's we I pace we trying distribution as some sales to lost But little

that so range we provide reflects think And variability. a we that

is Maybe have And do follow-up. of as it. any some a this But whether I then year? you disruption think beyond could a only quarter maybe the the year. be this answer Got know just you from lasting impacts may have this in first perspective do of you around we're hard think kind to anything I'm I from really the can that you understand guess earnings perspective, shelf-space fiscal about a any the shifts, fully see line what you share risk 'XX. incident be margin to trying whether losses recapture loss there permanent as perspective. could from you top or think

confidence incident. to there's what we're Kevin share structural quickly really Kevin confident as starts this is this be And related pace. in we'll we restore Thanks, no over It's have to about progress with inventories. as issues nature. full And we're distribution highlighted as It's focused And we able Peter. can, right. term and time. in on making short QX and highlighted, rebuilding is exactly year what that

as the get ahead are we And getting as retailers bulk consumption to back we where already of for rest We'll the now as to end do of the the finished distribution And Kevin we quarter fast We we as that QX. that merchandising goal left out have ensuring in rebuilding of to said, think of the do through we'll back year. and month it is. to we in of inventory well have continue some to and with this intend then, the of half possibly can. the in back shipping

are quickly that's as as as in of can focused We possibly done that working feasible much we 'XX to on. we're what get and as

that. doing And we history of a have

was look If that get example, we for a issue, distribution product back back Pine-Sol out due quickly. were you to able when, to

I can no as ramp-up do at There's was But structural then quarters is you ramp-up continue intend of we we business. to we what possibly progress. related of fiscal If a couple had can it this after our post-COVID, as And look 'XX. distribution year make in much initial issues on where in we to fast. that to say the

And brands, given our it timing. will of And back. again, value it's innovation strong investments, a we of Kevin confidence the as get our that matter superior have that we and said,

with And next Filippo Falorni our from question comes Citi.

going and key Linda, the how outlook well? as go merchandising? maybe a your any on -- as of so is conversation part try you of little to color increasing the a gross It us conversations on with far. like rebuild there been have seemed just can space retailers requirement shelf more those you color give margin Just

Thank is for to for this to a like and get inventory busy tremendous. ensure they're they that. to operations, do above and merchandising and right anyone cetera, And not much the is them have we're certainly joint my wasn't for they us product we flu. do, on and et as their you taking and the opportunity focus during getting that from manual that. things on focus everything they to that been continue of cetera, for easy prioritizing season is us with still . And have operations it's ensuring have that Yes. they partnered on easy manual we exception, our shifting as have It quickly that partners tremendous. to the not They've and every for shoppers. building to and rebuilding the be then tremendous, thank for been do. once same their then, they to without question And appointments ensure to easy beyond all is as course, measure and for et with cold as goal They done And retailer are our again of holidays, gone time, side it that retailers. which now we for possible

Burt's consumers of ultimately, and those just front we and too, shoppers partners in, we coming deadlines retailers, that and our on is, in to that relationships than with did We what start. out merchandising. focused we of And stronger get holiday like those strong are We're our at ensuring then COVID, to goal were is meet that they retailer focused this have time. and really important had going and we

We very feasible everything through to make them a much to to that ensuring with intend even be our doing stronger need. partnering, retailers they through through we're transparency, get what moment this

I on where our path work with can and categories get their we thank again, initial great growing they're so to past And be continue have we'll this everything we inventory recovery. for hard on the are. we to So that about great to to we innovation my back then perspective, restore focused plans need we feel well doing. where And we from you of an them are and get once get ensuring shoppers,

time. your your margin in Got of the margin commodity the Kevin, quarter lowest then, a impact and it. That's on was a gross maybe gross in follow-up bridge long X helpful. the very And question.

sense and you the whether on a So give the of maybe your the some with front of the like can year commodity help us for expectation balance phasing.

expectation Filippo. came supply million we year to, the We $XXX about Happy worth inflation. chain into of an with Sure. have

years. Now just seen an inflation is last That's that's entire versus that we've broader chain. over across supply few inflationary moderating than still the what commodities. environment, And the certainly but

areas about X/X of As $XXX million, that anticipate inflation commodity up in we other cost different is a of by that of driven is wage look areas. supply inflation, X/X chain primarily you in about that shows at lot

this as inflation seeing We've As products. to originally evolved then there Chemicals lower being cost other It little of some a it primarily bit. expect that anticipated. are commodities, substrate coming commodity has areas, But and we those than in X relates we still items well. are see to seen areas increases year. petroleum-based

and solvents even but little diesel some products mostly the are of some So and puts takes. higher, ag a

of and the I inflation a supply And increase in would fairly points. point, bit year, in to worth expect so your phasing, the back commodities. $XXX we the year. QX, terms still And chain it's basis half about pretty in million of is that of of through little think about modest XX includes total consistent

back little you'll it's what relative so a again, we've see for the And to modest with bit several years. dealing fairly been loaded. of that last But

Anna from next hear we'll with Lizzul of And Bank America.

ask and this the wanted to to have particular do much distribution. recovery for the plan the 'XX? innovation will just on in I in distribution in . How need had by innovation you be pipeline? driven already of Anything you regaining fiscal

Thanks for the question.

the from first items of shelf perspective a retailer we really distribution the priority, consumer the that everyday restoring of have So the will well course, be perspective. and performed on

shelving we and work shelf to that that we're we there, have be those retailers going on back to have because those the on back very on. on the that how items choiceful we on we're and work and get we distribution in we with to to the deserve So sure get want make

this of on exactly that to point How dealing a innovation. we is we as impacts off the plans. the we your on innovation continue team report attack in half walled will And had we innovation of people ensure that with And delight is that right. category have and with ship that were were we in we and to growth go back But half. drive the shoppers to happy the we're consumers to cyber initial the in back able innovation

and will ships we're that get with possible that in brands as innovation on shelf ensure of that to at their major have shoppers. to retailers time, and that our get of working as quickly we that all And we front continue

getting rebuild we well strong feel as So as we and in plans we retailers. brands have that will distribution half with shelf all the the very on confident back the major about base on back that innovation

advertising sales spend. around Okay. promotional And ask I wanted and to

market be similar and advertising that on disruption a potential You of loss spending mentioned it share will about sales. Is sales percentage promotion. of given are in XX% the this enough versus and peers

Yes.

we'll about of this believe to where we versus is the XX% to which to know, as and up we promotion, get we of support spend sales last XX%. As continue level the on brands And year. about you continue advertising spending sales was make note, And spent half. by brand, recovery by strong through phase and of that course, this any see would inventory I into adjustments back growth And as continued supported, we head also we necessary an performance we'll very cetera. ROI it's the et from perspective. right

So and more spend. more we're getting for that

brands plans retailers we we spending we're consumers increased every at to not And right invest. to continue the environment expect we'll So we getting perspective. But that right the for seeing between but see, and have are money to that a ensure think in closely. promotional market have higher the and we the more a our marketing we also monitor the that that only are rates from dollar

next question Lauren our take from Barclays. we'll And Lieberman with

want on the that to up conversation. just gross margin -- follow I

the think is know a in kind and I'm which or to Because would first the the like spot idea there's and flat X about is, notably prior it a the I gross confused half margin question. as assumptions the answer as not flattish being down and for pricing was half. little I gross world, talked where pre on supported them of like me an Kevin, the I But discussed second you cyber, side. back time bit to different same disconnect you of dynamics, because notably merchandising most had to and merchandising feel the have prior a You margins don't most

missing I does But maybe costs XQ. feel -- outside logistics it something I gross a you mentioned for like think pressure in So half. is second really else margins the there's piece in

first. So wanted to follow just I up point that on

we say be I'd than as that anticipating August, on half -- continues was assumed expecting back We've rebuild talk is sales are and so distribution you're increased support. about right. to were lower we're The and Yes, the we other a share, to merchandising though, few in there's X should in That we're case. exactly August. working back area, always back working we true in that the to items rebuild

will thought have the And other what X assumptions then that months ago. sales are to impact some volume lower margin. back generally similar So lower deleveraging will we

Okay.

Okay. promotion a headwind And should that then back in pricing, I that the guessing guess, follow the price also higher sales just to that on assuming merchandising we're to I'm right? in because half, if half. means Is that be second

mix, Well, overall part be merchandising see levels up. you'll as I'd say of show that price will

ahead the you're is of also single second if sales up total -- by of shipping like is then shipping mid- use I right, sort but and consumption for consumption that but being the And would of quarter, digits. hope situation. with high a in guess, informed net then gauge to above Okay. ahead consumption, that, shipping as we Nielsen out-of-stock sadly the I

it So handle trying guess, drawdown be XQ a the I on the would rate for rate need feels up -- the you get make to just ship which in than at stronger to like to that. I'm

again, of isn't about than should loss. temporary So be assuming shelf feels what like talking it significant, higher even to actually there kind if rebuild shipments you're

the are quarter. Hello. this down shipments XX% I mean,

able this to do is the hear have this end? speaker We operator. still line Are So us the established. you on

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hear we you. can Yes,

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please re-established, line you go is ahead.

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still here. I am

as messaging of if I me, the far -- everybody know guys guys answered, don't people answer. that we you as heard we lost hear I . -- you heard none are last? did we I'm What because -- okay, we hear what think I and do concerned, do? where -- So you didn't

going to go I'm right. All again. your All right. to question back

make You question. to I question? apologize on is want reask everybody your the sure to clear

I do now. testing feel remember I'm kidding. what just me I like you're asked. I

the call roughly So is rounding just and saying on consumption what's digits yes, that, you're should high XX, above demand. shipping only like struggling higher feel necessarily or like frankly right? I right? for I single consumer the shipments the informed sake. logic because just shipments, this So in with be circular consumption. in high Having net right we're quarter feels down the saying that mid- XX% to shipping than was it, not sales It Nielsen up a by almost shipments above is the shelf, like your

Yes. Thank you, Lan.

So and I can QX. certainly we're mentioned, as And our about expectation QX in you right. mid-single-digit you're talk organic exactly sales projecting growth

a above certainly we're top going relative that of as QX. partially that's of -- expect, to going X We result items will consumption, help offset shipping continue the to lap first There's the benefit to the to pricing. is line that

smaller a And in you'll that offering so benefit sequentially QX QX. see versus

if points then that, in a step QX, you particularly smaller sales. consumption. were we So continue about X to see the benefit. were be down price so other losing position, of that XX had We And still in is and that mix. are saw we a you'll The favorable in QX, will we we before losing had in quarter points item October,

have we We levels While above still rebuilt we are retailer auto consumption inventory yet. stocks occurring. have shipping not

well. And a bleed in are the month as still of probably November so sales, into we bit October, losing particularly

on a And drag QX that's providing so well. sales in still as

that will together, that we when look mid-single-digit at growth a you result. So as have all

we to I'll fully consumption average have consumption. nuance. When on being just shipping consumption, above would in Lauren, been we what -- point thing, which is add X mean a inventory. say your

and how over well inventories shipping we're time. So that's we rebuild that level, beyond

meaningful a what overshipment versus So would. it we normally is

Perfect. definitely Okay. a lot. helps That

admin. to just there as that how some curious I'm were the it and and that already this of August at amount trying not say model And X. feels right. then Or this, goes -- sales. operating piece and variable? model good of model I'm everything of like, through cyber admin at that like selling the with And the other related All cost just unfortunate to Okay. looking tightening just that thing versus take in I'm more changes curious, a much selling a belt -- given it of has out is I'm you're That to straight as you I situation? of dollars, been is percentage the actually some is dollars, was looking is able my slight maybe of that

work Yes, Lauren, we're on this primarily the model the work we've nice done is streamlined operating doing.

million on does savings, closer that getting accelerating people consumer keep we making you this to targeting admin about we're by competitive is very But and their decision-making us bit $XXX complete decision-making a cost to quite about while us, savings $XXX program about know, the end talk year about to really admin As of best. in we say, to by the X-year I'd and it million track know mind, eliminate a this more company and generate savings. in generate for nice much reduced are in

admin And savings the us But to of so of that complete drive you seeing we incurring continue dollars start year, event. the in year-over-year as as because well the costs spite dollars, in even absolute go we're the started cyber program. we you're down should to increased year and this last see

advertising I spend more. want percent sales dollars? send to I -- Okay, you sure. sales math, of raise not but get much. And down have so thought would want why are to the for you'd

this of Why would year's the advertising like a because all would earnings in once So higher trying thought much rebuild. just you're stock? not have "doesn't in in consumer second frankly, back I that stay the when, front the matter" half to it's flex

of the front of that undertook. exactly we XX%. consumer that right we the any with the we're merchandising but see we off feel change having the innovation, our brands that level Lauren, spend we spending. in good what And that to have and and exercise marketplace, we about to all if we in combination ensuring we based with of think health right had there's in And is prioritizing those of debates level, see absolutely of will prioritize our what the the that's adjustments make

And than absolute spend It course, they on much efficiency you to just slightly driving to year, possibly can as dollars team if still higher last as well. was get But try of impact well. is as that. will we there's are always we And rebuild, any we forward prioritize do, again, confident the think right it's that, if adjustment the feel based we right but we level. off now. it need our as will of look we're at as we make that very as where And path

next Carey question from will Fargo. our And come Chris with Wells

couple about Number challenging basis? there So be more your thinking total questions. one, be quick there between like this nuances others, your portfolio are it feel shelf businesses? on you a are rebuild various Or a should specific categories we of where will to than

than And we Chris, our term, short In able that you'll there we'll though, recovery to has before the are feel turn faster with perspective. merchandising be across to rate term, and, categories long to others. some nuances, confident distribution, all the and and shares businesses from rebuild were the of Over a consumer course, of there. return see from we return that No, some that of in the grow do to

point bit heavy will and faster categories, this complexity. other our be some the And quickly, in then incredibly depleted turn of had it and those do to turns then to the and with slower, for a has faster. are and into take some we saw bulky restore. and where rebuild of example, so will up the categories items So some positions better And they're our inventories we've longer of those inventory

significantly to for a that Burt's shipments took So Bees are more And impacted those for out. manual get environment more because in touches highly example, was us orders complex. Burt

rebuilding of as of the we by work quickly that's merchandising that over term, given the now doing and than prioritizing by on all have. restore and be Burt's we're categories of more and so restore But flu, right part critical that items we and can cold confidence And and we to so some that retailer, with that have we're And impacted by the that we businesses. inventories country, inventory in the holiday was we're most prioritizing distribution. full merchandising, able exactly have that's X events. other we'll retailers we that as our long focused our across

follow-up. Okay. One quick

a that. I there I'm other if are there's there's in costs hearing more into on you questions what costs step-up in any incremental half around to to the infrastructure think maybe right? top I invest term, protect guess any there the associated don't the over medium are back need or of some not, this I trying merchandising is understand take time with to feel fade that whether of against correctly? So are digital It's you don't such spending to now year to feel kind to give things, manage shelf more . Am no you there's incremental cost need to perhaps away? the the like back come that more shelf half to lost space. you the going to you're of accelerate going back merchandising on, in reading you the but retailers

Chris. Sure,

build. cyber First, the this we and in systems as and attack with the QX we to associated issues that costs clearly, we had incremental dealt overcome itself with needed and

an cost was incremental there So there.

on challenging place felt well. a as we us what of we we put marketplace plan took this was thought like going that piece, environment. well in be to plan in works for rebuilding the environment account very Second, And a into more that

I laser-focused right tools recovery. we at promotion, note believe, have place. term, looking in we that inventory are that things right priorities X long over again, remain we the the but level the strategic rebuild. on our to of including would on sales and have the we're of invested dollars we promotional committed deeply the transformation because in advertising so our the So We think we digital

how We have that sequence over the we to work to see future. do out

if in are in that that. there or shifts but not detail timing about any prepared implications today. to in talk And we're

importance the timing Just highest know terms be means over and implications to it, quarters. be that any our to of the strategy. committed deeply that to continues coming in we'll We're what of out and working

. Okay. Appreciate it.

JPMorgan. will Our Instructions] from come with next Tashira [Operator question Andrea

the sorry, back, in a consumption shipment go to wanted tackle way. different I So it but

that correct, So you low phasing off. would you the if given right, positive in, and -- like single that, units, pricing if like mid- that's compete in the is case, digits, my you saying you if high say and that single think you yes, about think off bit math run what the in the a categories if to you're is is a digit volumes

it or find had they consumer you got and lost when lost and X some quarter, them went share to that store, product the into are that X or might in the it's saying take not of Those your X couldn't X like are it take they market You're sales that not the unfortunate right? going volume might quarters sales. buy losses that,

the way should that thinking? is So be we

in you they that there to related that, a shelf, then are product there -- way to can is is back a tactics regain back? that to because couldn't are way, consumer? part quantify the question find as what you you're any and you that like you get the -- And back is using experimented consumer may consumer if that second have getting And of that your that, any how regaining

Sure.

of part question. Let start the your first me -- I'll with

to a then And a lower short operations to for that weeks a of of of that we anything the over and time. inventory no So number is is at which at maybe look we we we step shipping had first and beyond. there picture QX still happening move was were have happened we we anticipate rate operations, began The what very if this period for this system in meant time to we manual allow big and whatsoever. what shipping consumers were over and visibility manual period a QX back and when happens

They were buying the went normal out-of-stocks. of time, and and experience to see how can delay they retailer there's a they the be operations, much began that we One number or they a depending products. shelf when and retailer category to consumers experience manual a in And the that. that behaviors particular could get purchase. the their they the then depending part, had, over and most on and to for on Clorox And category had inventory item a a happen

led They in they and product. and -- on their product QX, so a downside half really where in more we categories customer that that if category, depending consumer don't is was Clorox the again, second of the across, down bleed they of purchase kind than though, And what need is look they were. half that that item you What inventories varies the had of about to, and competitive was find at different inventories. thing

beginning because at that as are And we're fully rest lost then then of back And back. not lost QX up, have that at rebuilding look still we sales. you in sales we the inventory is the

back cycle to haven't that yet come so purchase And with had buy. as when and cycle the purchase that inventories, frankly, to happens who have would dynamic people rebuild the consumer go or, shelf. expect And our continue see delayed that we same they'll a they as we even items

those them. the later bring of brands disappointing for we that And once and that how laser-focused that ensuring make that are items is have know have those competitive looking do of at we that absolutely superior and periods. support we we to that. and that trust have month of a that with Clorox that. we'll are getting we our want return people products why have merchandising, we're sure people pulse will all key And cold to we product, It on the reminds which products given begin to the we time, to flu merchandising at benefits that of this they disinfecting really them like things in not our and course, ship confidence that well. strong things switched to back, value the

supply, couldn't COVID trips of previous consumers will we course, one, to things marketing our strong strong our being items value of in of we though restore giving talk shelf a to product back number communications, about of was didn't demand we based offer unprecedented in to we benefits benefits new shopping speaking had. and need where that the able through they them them our where there were And and the the We even we have came they increased in innovation And and that us on to, past, off they find fully and as consumers. do it. confidence and

height share Pine-Sol at if the example, then have that our Wipes And maybe regular for during for that coming employ were due of in So extraordinary doing as we market best tactics those the We're points the said share of a we like we we're maybe that. with COVID the to of going while, example, I came history, back, restore under pandemic think or laser-focused as past look the the tactics time on you to meet about back, inability well lost worked very back. out we tool just is XX to demand. you that consumer to when

our we able And and and wanted. we more. we distribution our what People were to once that back, then brand, they did, regain it's trusted even got which

And back continued it's we'll our can't the what be focus strength would our pace I absolutely completely superior and on. investments. that's able What all so about portfolio, value that of the full full cool the getting on of given say in we confidence do we distribution, is brands are We laser-focused but have our to of the pace.

we from we the have It economic as we get then, on to get support thinking a half back we it. fully the what is retailers about an and think back for about back you shelf, that's doing and everything us to in same get we're how of just talked look, market Kevin as and them course, be Our can back going products perspective. ensuring consumers tougher goal really in to fundamentals is to

next question from Your Raymond come Olivia with will James. Tong

Thanks. Great.

ability do your gross ability that innovation you to impact and ensure you're As not you inventory get stay to recovery -- the yet. on there of to and this path pace how because market about sort doesn't there's back your then obviously on think margin share, back eventually, rebuilding quite

business the the You're cetera, half can some dollars, second et marketing, it stay innovation the with you that's rejigger of that. to patient in need on happened still potentially all in on and promotional working How disruption the that is the year?

back we've to critical us. what Yes. to Olivia, to it be and before spoken of about continues comes importance

committed to deeply be to pace balancing our We strategy, that momentum are our line that and drive and rebuilding And continuing the continues X of those margin includes while to things. top that of center as focus for to ensure the coming we'll we from that attack that balancing cyber make the all consumers. have the we're recovering decisions quarters the over choices the and

restoring and So we now when But course, that let important this we on return same that ensure the to go long not of to job back we did. ensure contained it operationally, time, first incident, automated have. supply. was could that transitioned the Job which of could happened, laser-focused had knew course, #X at was And we was critically we we we term. #X the believe we to of

bit the taken hand And not earlier we everything to of did at so back resources immediate down. the innovation were while I power we mentioned just need And little preserve group their that ask that focused to do and had that issue a to in systems them a be in was on half.

just what to do the with And good is half we we X have that. And our put to so to that. things. balance a back the set -- they believe together because is plans the news those in plans continue do to we ability we have continue And innovation did of

short that have this balance make to sure And term to we internally. innovation. focus have that the how laser restoring we and that's have We but approaching on we're

to dealing resources the the so term. And did to on if distracted put was hard raw ensure long same this materials the Demand long the we trying Olivia, we ramp where you aside We we innovation we with on when did the same all same that that very term preserve to high. were during that resources short are resources COVID We and but also shortages recall, had term. up with We the not thing the are occurred. supply. ensure on for focused issue

that's based that So we we have we 'XX long outlined rebuilding the going do beyond. want to is want can as choices of every confidence top make those we've momentum we and line we're off year margin, term. both to continue that balance and We and to of what with do fiscal forward balance to moving plans for short

given potentially just be capabilities could your then And I done? that it. program secondly, further you and needs think now. the the Have the the another project to IT because in of the a more you And extend revisited look Do if Got plan? middle at obviously imagine right Cyber, you infrastructure, out? took so,

Yes.

we we particular series our online further had endpoint systems measures of tools and bring things. and across as X response enhance we is controls. number experience to as continue those to place, So detection cyber And enterprise. our a a attack, Prior in security this, cybersecurity including our we to the strengthen taking

that's So bucket. X

course, more critical couple have digital a and think are capabilities and be the taken now of broad to part that through deeply you program Second, we're we be doing to any and to we do integrating And the tools months as continue ever we middle in is priority digital we last and digital strongly put is transformation. of place that are over note, that What our have in think that as need committed we more transformation. transformation, of We the ensuring important efficient we set account of it. effective to business than our into of we to that and that. to is going learnings into

how our And time the can to critical is And months how into more will as it we that and commitment last then changes is to to we there the is place. and the as the any the future just say company. in rest we've deep it's we'll be restarted this reaffirmed it is sequence given we that. too But if early over But systems. experienced few the make taking that tactical what what as it, I what think and we'll online bring tools in of I at we're bring account would ERP point we've our say reaffirm

Thanks, you. come next with Evercore Thank ISI. Javier Great. will Escalante from Your question

you question, reporting the to very simple I mostly fact And a was incident was guess, a that segments of like business, you? often a CFO reporting month surprised forecasting kind the with do had, Because that to planning, to U.S.-driven. know I the I over have with has is by how business do be a took this and question. communicate material. it that seems the to you

I to we a was would our going I communicated think have material say of thought is, What on this Javier. that our we you Yes, results. saw in impact X previous

was to that what so what given that's fairly has out the try in we event. the communicated actual in quickly. step communicate there determine important, was we and our we to preannouncement next prior put thought because August so to the it for was And we impact then outlook us financial But the last had

wait until not to want our today to earnings results. call did We

in communicated good keep soon on as a financial environment publicly, we handle working mind as have we that the impact, fairly systems had reality had So capabilities. to an is we're that yes, you in limited the

effort. So more manual is it

takes a to information bit soon we that we as out we get want importantly, that little But thought provide So there could. longer. as and

performance. to will can trying really figure inventory. line, when this, you're on Javier, time can through that because depending you that to impact the restructure when is work have systems, But And you what rebuilding out really start you financial

as to this recovery play going of have and through itself, determining the indications developing bit out evaluation we're plan. the cyber plan financial then a that the you of event let So recovery

then And month a that, about that a as we was with result on. went So all came that ago. pre-announcement work the out a of

Linda, go ahead.

that. Sorry for

going Javier, Kevin's was response question. your I to build to on Sorry, just

note manual other The countries is a information complex compete in I to aggregating in this over around all just XX And the would we're fairly world. a impacts. XXX thing is actually the in we categories understand environment that business.

us with are to the a process getting then exactly have to arms to implications and partners who and around working retailers with transition and supplier we manual our addition that, timing. our of In all

saw environment, full in it have could which as note, understand Kevin is we to are would giving to one was XKs. had that. all wanted actually information manual rather difficult how business in to just transparency complex those of you parts we to I and you as And Series commitment visibility our it be said, where when and a So it -- a

that. I appreciate

we close books my corporation, month a And was global. they Now remember X I question large every I used used work to re-forecast the every month. X for to and that

So was asking. was basically, the that I question

cyber So there the very a unfortunate. the business which that on plan was basis, understanding is a CFO event, re-forecast does office how frequent regular

Javier. Yes,

Let me environment I different. much separate normal asked was the versus environment because a cyber

from So close That's month, we X our basis. it a -- regular books every results we we to forecast like month every cadence similar anywhere -- our year. to of sounds the a sell X we experience on forecasts and a

in But automated So have of this environment. normal in manual a mentioned, because Linda updates environment. we of systems last as very period frequent the limitation

visibility less it to down. So systems financial performance were has our our while

And we up, soon then back was. the as financial brought what we actually we those systems communicated impact handle on we as thought a as had

all entities, have you that. And P&L, all your right full legal over visibility now, the

includes our We that do. environment systems up system. our ERP started We've

So yes, visibility we forward now. full . we move have as

session. program now to question-and-answer back turn you.. would concludes I the Lindle, This like to Ms. our

. Thank you again to our well. do call. We next look please you, everyone. And with speaking then, on until forward

conference you attending. you And this concludes call. today's call. Thank for attending conference for Thank