Church & Dwight (CHD) 29 Apr 212021 Q1 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the Church & Dwight First Quarter 2021 Earnings Conference Call.

Before we begin, I have been asked to remind you that on this call, the Company's management may make forward-looking statements regarding, among other things, the Company's financial objectives and forecasts. These statements are subject to risks and uncertainties and other factors that are described in detail in the Company's SEC filings. I would now like to introduce your host for today's call, Mr. Matt Farrell, Chief Executive Officer of Church & Dwight. sir. ahead, go Please

our Good with Thanks QX the turn the to then you. done, Rick today. open we'll results, joining I'll I'll up Rick, over call begin review for the And morning, Thank when for is questions. everyone. call us and CFO. Okay. of the

our world R&D going like dedication to continued as I'd begin, Church during we raw in their pandemic, recognize all material and Texas & QX result our for Company supply Dwight we overcame Before as to freeze. employees teams of the especially around chain the shortages keeping the a

outlook. about year-over-year shows talk sales our by driven adjusted let's Reported slowing. XX.X% no was by grew sales was in was higher QX the of Now, our sales another EPS compared exceptional increased XXXX. $X.XX sales quarter. XX.X% in Organic results. and of signs QX a E-commerce that's were $X.XX, In X.X%, and as X.X%, and to online growth consumption. QX, than QX percentage total of XX% better

a signs on return to experience to based continue are consumers that willing countries first by which U.S. the slowly that we continue as in outside as to contrast, the consumers stores many significantly will year online The expect consumer sales full they more to optimistic consumers means U.S. will mobile. seeing a normal normal percentage more XX% for Vaccinations of behavior. of to IRI. or a be up, lockdowns. total are the spend time We opening are In are new sales. study influence XX% is vaccinated

Texas transportation been to material Texas the freeze. of materials the in were freeze. described raw and the higher shortages As facing spiked and by release, February have exacerbated Raw in we costs due

and international we COVID remain Condoms, January, across mobility. which to and soda the increases the comp further gains minutes. XXXX, consumption society To grooming. from vitamins, as we XXXX. soda, baking were highs. the laundry and have categories, and the has are in are promotional dry women's which in outlined to a Analyst ones expected COVID-XX big unable up Of greater deliver down in top as a battery-powered QX Baking year-over-year in shampoo, kits sales toothache, those the Household of compete, which categories in grew X flossers XX power from we kits and in consumers consumption oral expected Of analgesics test grooming on to QX, decline pregnancy cases, opens COVID are growth some toothbrush, test QX women's of laundry in detergent growth, and gummy X X electric such balance Rick huge highs quarter decline spikes recover vitamins, and pregnancy double-digit categories, our in seen and saw this to and XXXX. name stay and announced of Overall, throughout for supply to reduced have the price remain have for and in input elevated in and and we COVID not additives from expected our couple cost full-year litter lows, portfolio, mitigate laundry a cost couponing would Day categories higher categories, elevated To steady. changed. We few our cat expected of spending. to continue thinking year. discuss demand XXXX. we expect tight brands increases, At will the

gummy XX% sales right in XX growth launches shares saw help rate. comment which vitamins that a X.X%. It and focus in are share described a Consumers made the VITAFUSION coming had brands staying. consumption up consumption our new grew XX% consumers in the out QX, the to One wellness gained organic on Consumer QX consumers repeat in that U.S. QX, market new of met X also as and dental now. it power have release. returning continues priority. grew category benefiting health the CRITTERS are with and to the who great wellness. L’IL at a Domestic and consumer of the on few into I'll heightened or levels. survey benefit category of appears our to from the is Looking within business, WATERPIK WATERPIK showed and they're health COVID from recover offices lows XX% pre-COVID new from patient brands

to in frequency of levels We the lunch half expect return to the second program 'n our of this learn year. normal

Now, BATISTE.

impacted Day behind distancing, quarterly XX%, balance was consumption X%, high International achieved record remains social BATISTE by While Women's campaign. our a of share up and we

about lockdowns, European want growth came I primarily in organic growth business in International Markets strong with by quarter, Despite talk Now, the Global to our the through driven International our Group. X.X% division.

to division engine led WATERPIK, continues the strong for be HAMMER growth Asia the International in and FEMFRESH a for & us. growth the ARM quarter.

pricing. Our business stable Milk prices to later to Specialty were due the higher a projected X% are and in demand. quarter in year Products due primarily delivered QX higher to increase growth, positive with

interest Now, The described Super XX.X% care the of turning launched release. product cleanser in flossing a on To XXXX, is products a toothbrush, our smaller surfaces. spaces. gummies, contains ion the variety lithium continue the cleaning and pedicure experience consumer many solutions. and to in specifically and with boost have ZINC a that designed for consumers. to In flosser its bacteria at-home attract Elderberry brush upgraded press to and and on Home is the spa-like self-care world's Sanitizer. SONIC-FUSION, It head new eliminates success, capitalize is system, the gummies facial manicure first VITAFUSION bathroom household also the house two OXICLEAN and In wand and new and long-lasting speeds. smaller water are brush earlier finally, New and XX% portfolio, battery and Immune a FLAWLESS throughout Products. products, was will first of we for portfolio, SONIC-FUSION stain immunity. taking two is which sizes gummies a a on and designed Laundry products beauty is And we X.X with Innovative and POWER ION, capitalize shower advantage only WATERPIK launched for additives laundry to WATERPIK at-home viruses. WATERPIK launched In trends introducing which increased sanitizing of full-body fighting personal are

Now, let's in to off to a turn QX. the outlook. good We're start

continue year target, We growth EPS X% cost. X%, of Evergreen with to input our is in expect the full line heightened adjusted which despite to

for growth have through you And expectations full April, consumption middle X%. if Organic X.X% categories sales our at raised expectations, we look consumption, sales were the outlook for year-over-year. to to X% our XX from raised year trends X%. up in Given consumption now to of from X% growth our reported consumer of to X% were XX

to I'd remind many everyone of Church conclusion, in to confidence reasons in the have & Dwight. Now, like

times Our good track uncertain play both and and record economic well shows in times that we positioned as Categories to bad to we in in are which now. such do consumers. essential are

sheet of me, balance balance a a premium -- and have of products. and have we pardon value value We

continue have brands power label. their a one with in acquiring TSR-accretive Our exposure sheet, we number businesses. balance to are strong And or be low open to we two categories. private to number And

details us on Rick QX. up is to Next give

you, Thank everybody. with good Matt, start EPS. and morning, We'll

QX, increase prior the quarterly earn-out was continue earn-out the was X.X% outlook, driven than which for of excludes demand previous as in to our by which up adjustment continued positive the to Organic up volume price EPS, Reported primarily better products. $X.XX adjusted our of earn-out period. and will conclusion due was quarter flat a many increase X.X%, $X.XX, X.X%. is until calls, consumer revenue of adjustment, And year. we First the $X.XX were in of positive discussed mix a sales X.X%.

review segments. Now, let's the

thinning bathroom delivered to Organic Domestic. CRITTERS KABOOM was volume was cleaners positive Consumer & Overall, and International VIVISCAL to clumping gummy higher led VITAFUSION, by Consumer WATERPIK despite as offset ARM care FLAWLESS well mix. by the and write-downs. and great as result product lower beauty European hair mix. growth a This growth X.X% due price organic volume, X.X% price HAMMER First, partially litter products. sales cat vitamins, oral higher products, increased products, due L’IL

For are as XXXX business, to due offset higher sales volume. have Milk partially to prices increased our projected organic lower remained forward. moves rise and by month-to-month SPD X% pricing, stable

margin. to gross turning Now

XX impacted a basis-point mix impact XXX margin. basis points. partially costs a Tariff XX positive currency. drag were from from quarter decrease a from by from well year costs, productivity due positive Gross price/volume XX.X%, impacts. to costs related These programs offset favorable primarily first plus distribution, points XXX was basis to as points drag COVID XXX and Commodities, exacerbated basis-point gross margin a by impacted a basis commodities, margin higher freeze the and were manufacturing was XX tariffs XXX ago. margin basis Our gross a of were Texas by as which points basis-point on negatively

half quarter laid inflation basis was year, the lap we some release the as down to a tight news gross we As XXXX. points. actions for reminder, the transportation back in expansion commodities in we related to the on we back out and half pricing higher as the promotional and in spike margin start is margin outlook of good of was the the market. expect that well experienced The The the for behind and variance of our entire tariffs XX

XX a Marketing marketing. basis invested expense sales to behind net our year-over-year as percentage brand. $X.X we to as million was Moving decreased Marketing X%. points up of

XX basis increased year-over-year, due intangible points to SG&A, amortization. adjusted primarily For SG&A QX acquisition-related

tax, to had to exercises. quarter the was decline higher stock a due Other effective increase lower in of transition basis also to as rates. points, an from And our IT well income $X.X option expense And XX.X% R&D driven as investments rate ZICAM $XX.X the lower XX.X% by We primarily expense million, some interest acquisition. XXXX, compared for costs within from now XXX all-in million interest lower cash. for was and

activities $XXX due levels. is three earnings, offset to decreased in higher by to Inventory first in increase to as cash operating capital. we fill expenses to which working decreased of cash of timing from payable the Accounts higher XX% improve sales an payments. customer the to increase was months and For due support continue XXXX, million accrued

March was $XXX cash XXst, of million. hand on As

Our as and vitamins. focused continues litter CapEx laundry, continue to full and we year million approximately be manufacturing $XXX plan on capacity, distribution to primarily expand

points as sales $X.XX expect levels promotional last gross reported from X.X%, of of growth expected year is higher organic continue lap input to XXX and a contraction Adjusted we growth be basis approximately from X% low of QX ago. artificially approximately per costs share, adjusted and a sales decrease EPS. EPS we XX% margin QX, For year's

did our As release, vitamin recall voluntary business. read selected the we of a in products you within

the is which outlook. now the for And approximately insurance. We're year sales reimbursement previous year X%, our expect We growth to impact quarter sales from the organic We by growth and X%. we in up to full the to X% to approximately above EPS reported our previous expect outlook now be $X.XX full QX year are XXXX be to full seeking for of also X% raising X.X% X%, outlook.

to and higher raw margin recently, increases. expansion for the of we have now due of absorbing the about margin of across large Turning gross to reductions XX freeze increase of gross full incremental previously We a gross full three one-third expect price the sales, year costs divisions our and cost March. and We're to raw seen year, our We be primarily part of transportation points million the in expected portfolio, flat impact large year. materials for the increases $XX And a the Texas offset in margin. represented material transportation and had year. promotions costs of all Higher costs. for basis in

to As dollars, a we gross necessarily margin. reminder, protect profit not price

last $X.XX, year year Adjusted expectations expectations tax exercises. option our stock continue lower X% be a to a rate the X% increase in now versus $X.XX XX%, of outlook. due are expectations EPS $X.XX Our previous higher full headwind to This range full is to year-over-year. our to versus

pursue from continue operations billion, outlook accretive cash we Our to be acquisitions. while $X continues to

happy questions. you be with and As to start, year. another be take is I Company to we And heard from and expect strong great Matt any XXXX off to a that, Matt, the would

We from Grundy of Jefferies. with Kevin Instructions] have line [Operator a the question

I pricing. have spend commodities. moment your a and you on guess, then, shifting start, year, exposure for would can Let's and you on international Rick, the if helpful. I And how pricing to much think you of Matt, mentioned hedged just commodity be portfolio. laundry that your

-- portfolio how I triangulate will lead to between sort like you contraceptives what OXI. I in on of And in and What do soda, much from outlook? then I sensitive are might in is bigger your much maybe categories, may then baking How And take know outlook, your seeing much in you your is think in Company be the your that front? there outlook? the pricing is of typically, and litter not be how vitamins competition, specifically topic, in expect additional you but suppose. pricing percentage a pricing just laundry your pricing?

Yes.

Okay. in X or We margin half as the a back X of commodity costs confidence comfort some commodities you the XXXX. of hedged Kevin, quick. in Maybe well. of we piece lot could margin expansion remember, it's half the do And a gross about key are on does lot whatever gross lapping really volatility we we perspective. expansion away. have Rick. commodity back XX% two-part, the those, take hedge to the give I'll we're maybe said But, those that if a back as of commodity in go from higher half

ethylene, in of half would that rate for the an the first XX% be spot XX%. for XXXX, XXXX. up If half as year, the half keep of the remainder of indication, example, we versus up current Just back is the second

So, in mix. back the like that's as half are expansion gross some why And well that. we the in I have as we we confident price/volume think confidence margin said,

Kevin, your pricing. about question And Okay.

So, laundry. we'll start with

past So, And XX% in anywhere over you maybe XX way, different our ounces. if our to price. from is in the X% look a estimate have through generally competitors taken changes price at months,

out but bounds in announced with of laundry. don't going discussing with we're price. to of that we retailers And We're now. to so, think be price in April -- And respect gaps that sort raising we're early we

business, of there the and couple we've Your question priced, would been ARM variants care & in HAMMER TROJAN concentrated within that third it's U.S. so about much categories it's specific and portfolio. raising business. And Domestic, of also International A a XTRA, how a of SPD. boosters, also got has personal in couple sheets the some category. and Internationally, business, just much price include And our scent laundry. other pretty largely the on a it's the

around products personal is by And the which fatty So, care SPD, acid are MEGALAC. the largely of increases PFAD, inputs is some impacted for are products which particular, business. affecting a distillate, one price our called our palm being in of

other we've prices So, been it well for products. be as increasing MEGALAC, of and doing monthly we'll now some our for

so the question is as sold -- on think might I related far As be promotional a deal, how environment today.

side household the the promotional. the knows, that's business everyone as is So, of one

year-over-year year down XXX were basis The for pulled was laundry a XXX that's year-over-year basis category because similarly, there's We these probably that. in last sold think promotions laundry litter, now is was points. simple down in points and So, QX. in going basis points reverse QX, categories. on deal. And in reason It's XXX to QX,

points second laundry the So, was the for and example, last XXXX. deal year-over-year, in year, X,XXX sold down basis quarter on versus XXXX

in comp kind obviously, QX. different a of So,

So, up. think help we Kevin? may it you, Does be that

a don't mind. question, the Matt. broader A follow-up if helpful, pricing comment, on That's Yes. quick you

that one-third suggest other You potentially to lead, categories the to two-thirds presumably, taking and upside there's it's the portfolio is Is waiting where price going should competition that you're the so for that for of envision you're hard because pricing. justification to probably the not cost increase. -- a to not lead, many are mentioned

the that waiting for in two-thirds, presumably So competition to you're lead.

offset additional cost to you're sort could that pressure seeing? you the just confirm Is potential of that. If commodity

think -- category. That's costs very about in cost right the I acute the it. price input increases to the Yes. the -- or way were were mean, laundry

move. might what we any where later. do wouldn't we on as we we -- But, thought as category other to So far that's but speculate had

it. Got

thinking How be implications and even are $X of of And sort of Thank COVID, minimum, would Church's year. a implications sort portfolio? get in we in like you. quick. consumption more broadly you to I And would looking could time potential expect seem from and as be next it environment, million monopolizing vitamins what out still lot it one understanding pass internally? I'm a view a like on. if apologize lot the for Long-term volatility, question, Matt. Company's the here. higher planning Just I'll this But the at of uncertainty through

expectations on, Kevin, your six in this… the our next with question is Hang months, what

the longer cetera? for question sales degree, portfolio X% focus guidance consistently on terms at broadly time sustain you which of organic thinking Matt. now, portfolio. at question's a you pretty How so the Church's No, term, health vitamins the the would penetration about a some et higher degree minimum guys have to some a will, is, within relative behavior shifts of in and it in minimum, pandemic, wellness, household The beaten like a has in and as seem to consumer consequence are

wellness certainly, we business, which benefit has focus the grower Well, business. high is vitamin our not acquired going on been but just health just our a to business, WATERPIK and single-digit since gummy the perennially

going going with But, you're what and able in that broad we'll there. be XXXX both think personal reset, live to COVID we're household I year, we and we care. to of grow kind a beyond. frankly, this as find a that do be for well-positioned, to such We is is portfolio, 'XX that think have from

Andrea comes Teixeira question line next Morgan. Your with JP the from of

comments to $X.XX on of you seeing And shelf any should categories balance any the thinking by coming changes issues vitamins? or impact that the that on the back there potential for Any for the or Is that kind to additional Yes. you. Thank trying for any get called insurance payback we one. that recall, back you any on what more you with else you're to be anything just is disruptions of? to and on And obviously, the of are mobility. or production I as now? want basically there? then, charges -- space impacted had potential What a the the have year go are follow-up out

Yes.

I'll I'll recall. insurance Matt the and the the take So, let talk and mobility, and about categories just

trying shelf to our reset release that issues. And extent that's very up the impact To in to there $X.XX. relatively the additional to production. This be no has talked of is We've knowledge, very small kind So, clear we've think of We the clear limited was of been that it. that. it's potential a window been about.

Yes.

up And As at-home go, using were was discovered some in give QX. just category the ago up a on categories were solutions. you depilatories far that, as Again, XX% the year depilatories people color even gummy who X%.

a categories, are examples, it this those one, two more there's So, year. of have be couple and elevated expect of households another cats. the we Litter to X% is that

that's for litter. up we categories So, was grooming in X% was electric up of the shampoo number tailwinds XX%, a example, expected sort the in for flossers. there X% QX. And to QX. recover, just water And flossers in QX. down was even of were Water Dry category

start And have that a QX. X%, I the to sequentially. And had in ZICAM well So as as as far -- sodas category category, ones QX in the XX% we Toothache down as in we in record share as was it's baking off year-over-year my shampoo. decline, Rick also will to dry QX. better way remarks that we shortening, in reference and earlier, decline in sales mentioned already QX. grew cold made was And

So, in bit that the a of what's you gives on categories. going color little on

personal categories of his in being think I XX across household XX in pretty care. April, remarks, commented that's prepared about Andrea, and Matt's broad-based and positive Yes.

impacts social to mitigate. distance starting So, all are those

Securities. Your Wells next the comes Fargo of Chris question Carey from line with

So, a couple of questions.

a like than I guess, and expansion XXX higher XXXX. on margin of guess, appreciate anything think just gross bit. implying the mix expectations, unpack pricing first, much relevant comps, despite your in number then, look gross -- follow-up. higher But also, that And promo, to just this business you pricing. I at margin your Just little gross through that midpoint like basis lower dynamic. level think it's I relative I higher the average slightly if is of that margin it? XXXX, you have back it fair environment. even lower points maybe How a half And might of levels? maybe, is appreciate that one maybe a to promos versus one, I feels something two, wonder number better the Just to then XXXX, way inflation can

do I'll it sure. two Yes, And ways.

pieces. outlook. -- some way, first The the full you you at of a our gave New on details year the in CAGNY, annual York, Remember, outlook gross we the just I'll give year in or margin, of gave full you

So, I'll bridge I'll then kind to it do again, you. and of that

the outlook productivity. price/volume for is points plus full for for basis points margin plus XXX So, basis mix, XXX year

but are example, of the all for big Price/volume two promotional number our those given for, is a it So, higher lower spending one, than mix, tailwinds. lot pricing expectations was, higher really M&A, inflation to we XXX than down volume is we XX. how zero. points. tariffs And and baseline basis have Then, XX. That's down then, doing up better expected. get we

and is take you this year, XXX. of be half up is a zero, a step well, you the to going delta points. if Now, of half And about XXX basis back be the get about first think, to XXX. half to down about going back the That's first to

the why are that second -- mix, the first price/volume we go are half of convinced half we So, talked is down actions took basis can from points XXX that to of we because we those up? about. XXX the that

the in back We keep of the costs half. XX% only spot tariffs some COVID the levels. HDPE really The relation XX% the up had in We're is example current XXXX. we levels. example, points if of up numbers spot current higher up in gave is half XX% Kevin's lapping XXXX. right? back to year of tariffs, ethylene, other half related. half. is in in back in We an We I HDPE cost is is ago basis in first only question, that keep had the half for XXX XXXX. Inflation, first Ethylene the up XX%

to wanted So, those I are color, -- through. that's little walk a just you bit but more

be that. on Okay. just And one I the vitamin follow-up category. would appreciate

different -- from was has been bit it's growth outperformed already consumption per category, perspective. higher that, the you just that But, not this category approached and few a know know, I capita but I right? just ways XX mean, a So, maybe don't it certainly year-to-date of high less least relative sustained, not certainly points, on XXXX. a the little sustained in And at I a a outperformance level, in has basis. scanner roughly that

invested a your into, and story current there's past. share different Just the product that's little in in or the doing you're here, pretty specific clearly significant the a relative that particularly on too, whether But, in asked gain just SKUs you think like case? So, the subcategories are offer think ways think Whether incremental why quite contributing of the or you broadly, relevant exactly you you in the that bit outperformance environment? perspective a capacity do that's price category you well? tiers that's is can the had to already what

Well, the category, number have we remember, Okay. in gummy one brand.

that So, is there. pills earlier household gummies. capsules up. penetration I to transition continues let's mentioned start We and right from know the

that and households L’IL new categories. buying VITAFUSION are are to being were more, the consumers So, gummies where taking the already CRITTERS attracted

we the from had that one of number years. success the a products over with We've of last brand. benefit lot being So, stand the couple new

on So, to we're shelf. spread able out

recall earlier come calls too, had from that And late on else, is line we something XXXX. in third-party you may production

now. way So, our stocks right are better end

what's is those to of So, a elevated combination all sustain consumption XXXX. the in going

question line next the comes Oppenheimer. of Parikh from Your with Rupesh

segment. International So, I to the to go wanted

still that by for the rate thinking I guys of it the X% lockdowns. think impacted how some segment? achievable was balance the was about a QX are year. curious And for is European growth type you of do clearly, So you

Yes.

International Markets last years So, a International. on from year basis, The been we're for the the has Global in expecting full few engine still growth Group. X%

broadly spread quite So, around your world. across risk many regions does that the

we're the Global business, third upon for better years. the wholly at our of we you it's Group been countries is where a and growing recall dependent about So, XX% or Markets X, operations. that X not And last have may

we that in So, the XXXX, sustained be think Rupesh. will

Rupesh, bit our February was in a that just organic give you X% outlook SPD. color, X% little and for internationally And domestically, to was Yes. X% X%, and more

closer X%, Now, that's to we're X% it's and rest. internationally X% thinking and

one And follow-up great. maybe Okay, question. then, just

numbers looks ZICAM, like that think the on for the down your expectations you it year. everyone cold reading calling And challenges. this out So, I'm correctly, is -- guys cough ZICAM if took clearly, I and

you on don't next I year, out would back think expect year? the track, next business guys know, as to you So, I be guess, do fiscal look year, like you -- this

Yes, Look mean, of is way and incidence cold and absolutely. cough XXXX? knowledge In I common -- it's flu the that down.

the share, and a many, it's have cold brands we category. fact one we share number So, affected We the focused remain on XX% that the had many in in shortening.

particularly is it we So, and XXXX growth, to do a for contributor term, in the to We a long and strong organic it bought it brand. expect be beyond.

comes Kaumil question next Your from the line of Gajrawala with Suisse. Credit

water the seeing mentioned sustainable bit stimulus flossers the strong something some Gamble, of have Procter which a about water also morning, stimulus? and you there's that think in and demand. strong Pepper. this device pretty Keurig impact of -- on ask particular, strong. been you question is because impact flosser figures maybe In at maybe we're & Do Dr We've less are that strength a very I’ll heard the sales very

think wouldn't apply we of that when I because that we that just water would to the the beginning first saw bought rate XXXX business. in flossers growth

several have all going from term. where the opportunity past single-digit to and a long That's is growth so we come years, So, for the it's growth internationally. much high

year remember, devices. depressed. stores was we're that in time we're periods a over super and of that Yes. just -- And shopping retail think do comping nobody And for ago I are doing

also comp. it’s a do I So, think

year-over-year. super comp a easy Yes. It's

up long & XX% might be So, been category I for that be by wouldn't grower have term, a swayed to QX. Dwight. it's the the fact going But in Church

feel impact Outside stimulus? flossers, on of water to any

economy, I savings the I think the about can to it is, mean, look, the stimulus way we way up. virtually think about Well, this every category. affect are think rates

There's Now, is are stimulus last stats in five And disposable hourly income. labor X% shortages, -- years average that I've seen need. and jobs And between average for So, earnings is more XX% helping and available checks X%. is up. certainly, are there's right? the of the those

household think suggests all of I So, the getting the healthier consumer that on is that balance and sheets healthier.

that benefits of categories. our all think I So,

And but of anywhere quick and need. very prices can't pricing just then, one. and maybe a just you discussion your that get Okay, what great. raw about about real supply issues we're hearing impacting a that kind material lot Obviously, business stuff, there's all? at Is transportation also of

might majeure example one force day think, Well, six. does, certainly the In for the had that one the other we of suppliers. right? it Board our I in have of year, gave quarter, normal we I the a

tightness there is supply. So, in

Our a and stuff job can suppliers on. R&D most. cap. great hand But get suppliers everything and are doing have with through we on we've -- by always to that by, There's working to substitute or announced mouth largely ops getting teams

line Your next of Chappell Truist the Bill question comes from with Securities.

of questions, Just one pricing. XX on Kevin's on a follow-up

terms of timing, think had little about kind in that In sooner. you're September, P&G bit of pricing were they a looking at said I talking

pushes of price being extended risk think you the through? kind of of summer before do everybody there's it over of gaps So, kind any kind

address? in for that you're timing our The to July, Is price trying increases starting Bill. is what

our some happened of allude that that competition with aligned activities think aren't that of kind historical I some our Matt Bill, before what was gaps means levels. trying the is, And of to compaction to price really versus

you. Got

time? kind at competitive in everybody front, see in of same you kind terms the price everybody taking of -- of So, lockstep the

like driven simply decision reduction that unilateral had My the so, increases laundry price or raised reference with over experiencing. ounces prices past things been to by and was months we've the that raising by the in their competitors cost respect our just was and products. in No, hey, XX their fact that, was our in

was we gap difficult a consequently, see on part to us didn't prices pricing. create that So, our going raising for in

Got seems to you a like shelf you've it. bath you franchise? a shaving somewhat at gotten from, just, know, environment positioning of update category. some I little then, supply And of of normal staying hasn't normal. home, to can COVID, issues more it, with give to where on the see the bit people at FLAWLESS mean, been on since you seems it expanded more It there bed an I SKUs. like kind bought kind to retail it's issues, return better

it's of kind bigger of bounce COVID that any see back walk when So, the through block But ex kind on thoughts you orders. the a franchise? retail you

this about kind And we $XXX $XXX net had gone then of And million, million. last you're bought we and business variety of it for the bought past. in we've talked sales since We've a million. in then Yes. XXXX, business right, year, When XXXX, sideways $XXX the the of reasons.

because be good. XX%. a now And we've a I in And array those mentioned products. we've reason product. existing new to with mani, my got Plus, So, really expect this nice got that we why believe are approximately which remarks, of go cleanser, year, up is are products we and to the behind the some influencers cleanser body products, got pedi face getting that our

So, notably, Ashley Graham and Dove Cameron.

We also is Berry, FLAWLESS. Halle who celebrity a pitching have

So, all -- are of and I think XXXX. those in hitting

about consequently, future So optimistic for we're FLAWLESS. the

Barclays. Lauren of line the from with comes question Lieberman next Your

business not and we're but about are little X% periods, a primary starting in? guess, to to the talking what it's And I talk could secondly, Consumer growth. one, X% what guys thing we're the you from Domestic that market how data, multiple the into and in outlook hoping vitamin going on driver the does optimism is now bit degree the to how Nielsen greater And well was which pricing shares the that two I change for is in to relate down a is in see environment. of holds laundry softening that things.

curious on a in view more your performance on to market share ties that laundry with just how Thanks. outlook in Domestic. Consumer So, optimistic change and again thoughts on that

outlook Yes. can are and organic driving it the add what in brands the Matt change just on. and I'll take --

driving Lauren, is Vitamin things PTK two really doing one. big the is and our in exceptionally the that or it's kit confidence X% are from So, three is the midpoint. strength business WATERPIK to as doing pregnancy X.X% test well. outlook the a well.

raise helping So, Those -- were certainly all are outlook. three our it's kind broad-based. those that of

that of primarily to a briefly, the things. have Now, And is in we dose. in-house. is laundry, information our bring two real to Unit Really dose slightly choosing share transition because It's terms not because consumers from we product. and time. that's that down one in to Really, aren't review continue buy unit making outside there's share. all

ramp-up we outside moment. so, now at right is are to the the supply in-house. bring And good stage news in very tight But, the everything is,

So, a blip. short term

Yes.

As look far HAMMER did gained XTRA if share; & you Lauren, category, as ARM the laundry QX, at not.

We pretty respect have expect with I been price. to We quite mean, be actions prioritizing few ARM for a do our could impacted certainly shares normal. HAMMER & that's quarters throughout pandemic. now, that by the

could But, our that competitors promotions, But right well. if how deal, react July And committed unknown. to or price competitors So, X. as reduce sold now. less starting on raising that obviously, price raise affect to certainly, unpredictable shares were is we're to

comment. give I'll Yes. an also optimistic you

include competition follow-up. All assumptions our outlook doesn't of our our assumptions that and

So, we've else. volume the on elasticity the taken and down everything

of So, that's do conservative a way kind to it.

from Deutsche comes question Bank. the next Steve Your line Powers with of

comment So, last the just building elasticities. that on on

But, price, talking point, brand CPG It the strength. going to you've pricing conservatively the of raising it's like as You've -- poised about be seems got the shopping like relative majority momentum to already seems this so approached the at or up. come, either it competition. companies in many so basket whole having to consumer listen done to we

that relative you factors about or So, analysis? that your into and elasticity your can complicate just cross-category talk benefit how -- might scenario thinking

have fare times when companies economic years It's a pointed you Yes. one brands. between Steve. Hi. you're than And going one premium typically, brands, umbrella have of to statement, portfolio sort We've in better number value. do an we that investors to not out balanced have that for difficult number

in now, position. good like forward. going where are we're We we right a think we So,

any lot gaps and a despite great levels our example, brands line the increase, value in Yes. to And the compared brands, competition. and values even in with are are of price are historical laundry

Okay. Fair household rebalance, I at enough. as and in I presume patterns guess, and both amount there's consumer takeaway in of volatility a been just retail inventories pantries. tremendous shipments

benchmark try consumer right of actual sense you trending into your outlook? from is, how usage do any in year benchmark where actual versus have a confidence to more is what today? As the of year categories know or might don't those just a the last I versus or And that you us fourth your cut full sit, -- you that dynamics through usage on insight sequentially of raising ago. quarter the But brands year whether give XXXX your

looking in pantry at to consumption point based usage. Just panic I anymore. the patterns buying wouldn't or loading on categories and consumption equals

I a think, Steve. now, steady it's state

to care digits partly vitamins, double Yes. personal April talked but year, growth comps ago. growth referenced, and growth. are our And up categories year, are about to it's on consumption, there's we we release because year the gummy top example, XX of about an in April last most categories low categories And a because in just as of whatnot, add that this that, But just of if look but said, XX growth, on of it's top up. at of you Matt Matt grew,

So of again, top on growth. growth

Your the line RBC next with question from Nik Modi comes of Capital Markets.

been called kit call, declining a positive release in out of the and the birth during test noticed I you So, lot there's trends. pregnancy commentary and talk rates, about the

we're relation the to think something up XX So, months just over else our I'm homes? all easy curious, is you happened going or just locked last on in this comparisons, that as do there's a

Yes.

is, at one last way April year, it you versus look look if I March, think, at period XXXX. February, down to was like that the

the kits would in we quarter, about sort have one is XX%. we categories you back bit that's you XXXX. thought of category the easy that So when in a the fall of first at look comps actually And said up year-over-year. And

fact birth mean, think could best last Difficulty]. Nik, it's back give rate doesn't case, the are think typically, Clearly, year-over-year. that I thought maybe I not. in So, in flat a recession, the But [Technical maybe it I we you, and it's fall I you're -- is one other people that maybe if decline.

So, than the Difficulty]. we better could category be [Technical

one was portfolio a of like of about you question, home what kind would more about given kits expanding the Matt. I things, to just curious, with other diagnose and that. in how testing that and you terms you're that of diagnosis? should kind more And just need to of now thought that vitamins have types things at be other these I'm And you eating Great. thinking and business, can what of lot in deal of ever do like you already

Nik, I in you products. a have think new future

first exactly at. course, name I response at we'd that types we we certainly in categories, the And think of of put have be looking other yes. that a things that's but brand great

the from with Sachs. of English Jason comes question line final Goldman our And

question. come gross I margin wanted to back the to

because it you I earlier, was I think asked fully it. think, answered don't

a pretty that gross hit Your going the in guidance half. back suggests margin you're to high

last XX the in will which you've ever highest the environment, over it context be back going achieved, the margin fact, surprising. In of seems half years, back

with type the at So, gosh, second why should rate margin you margin, the is you I the pressures? these 'XX, half was fiscal there you hoping cost range? if high with XX% out Street’s think normalized environment, you to this a portfolio? structurally higher explain, you're in of margin XX%, XX the Do Street. at all-time this like for back could is, XX, the gross And going even margins you're hit maybe right looking be what in today, related be portfolio question have your then, can

on context gave you thought I some Yes. numbers. absolute Hi, I to Jason. hear I it.

I And on remember, that, going we explain of almost half. just our to was model relation it back think, where COVID, right? the program doubled the talk we're part underlying ago. was in Evergreen over But, Our years has in it have we of up -- to last the I'm the are certainly five about couple of to things lot true, inflation, comp all a that on productivity on the trying confidence comp being in tariffs. comp with years

So, these discussions, that's has tariff all these that all capability costs. for masked this all of new inflation, we because offsetting been COVID have time a period things these a

a as just in great when margin gross have bear businesses add an to as coming MPD, higher that example, certainly that's way. buy simply well. and So, we

a lower than So, ZICAM, margin hoped number had as and the will we revenue season, example, though, zero that an impact cold tailwind. for even flu because there's is be still

that things also those are all structural So, tailwinds. are

model, Evergreen to in these expanding upside, term, that believe room the lot have I past confidence a tariffs the over think, run. do margin. one-timers, more of gross whatnot. all We've more get But we to like long have and we got really I

the XXs the higher be think do I term. we're that so, going long over And to into

all in cost you've got year-on-year it half? Do a appreciate to forget structure about expect lower be first the gave. a half. just I But you the Okay. the in stuff back you year-on-year, sequentially, lot

Yes.

like of said So, of just we XX% before, are the inflation, but all it's an spot of assuming in, sequentially, a kind the year-over-year, that about not we commodities. locked pricing. as be lower? I now, Right do example, like We've

in costs tariffs, absence absence of of don't absence costs, higher in higher help the So, the help. COVID theory have COVID the actually tailwind. about we're going those the us is portfolio. productivity well really should then, talked that's inflation, all new back things on program of We same higher it's the as extent. to And the That talk positive in that then, to those the incremental Matt brands we But about. M&A always incremental the get that the price/mix half. pricing And

the So, those are the things that of higher. are structurally kind

are queue. questions in no there further And

for to again questions. available you we'll talk for joining Obviously, And you, everybody, we're us follow-up Hey, today. July. Okay. in thank always

for you call. participating conference in today's Thank

You disconnect. may now