Church & Dwight (CHD) 29 Oct 212021 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the Church & Dwight Third 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 supply morning, But a for their results, chain review the like Church of the Rick I'll Good done, Rick I'll open Dwight to labor we we'll R&D faced going, employees continued for dedication and manufacturers. and us begin, suppliers & world begin turn company up company to at Dierker, to our all over shortages during recognize with of especially widespread as for call third And everyone. the our and teams Thanks. the when and joining this is party our questions. Thanks call keeping today. then CFO. around our at before Okay. raw the quarter, would QX material complexities the I

QX let's rate sales considering X.X% growth a year organic was growth solid the quarter. exceeded sales QX the The was and organic about our outlook. Now sales organic is grew XXXX impressive, was the QX quarter X.X% talk X.X%, results. prior growth X.X%. Reported in X.X% growth

our that's XX We in top growth The than growth. EPS grew $X.XX on top we cases So some gains and categories better year. $X.XX consumption consumption of was in in XX last of that's and the adjusted which on outlook. compete big of

QX, saw double ZICAM. vitamins, consumption of digit and a growth brands by XX.X%. many growth, sales not name total our double Boosters, a of in HAMMER digit X.X% reflected & supply online ARM as you: our five cat them organic percentage although as I'll were performance, experienced was growth, for brand litter, Regarding And of shipments it's BATISTE constrained and Scent sales sales all brands consumption issues. In our

year-over-year. X% increased online sales by Our

to this for in continue be we on year XXXX. top online the Now to expect sales e-commerce XXXX sales. mind, keep QX of a as XXX% we growth percentage experienced in full in total of above versus XX% is that And

was substantial, their described produce. caused Now as challenges to constrained problems. in availability limited in and our the have raw to at be have and to further below shortages resulted of which manufacturers party levels ability third continue fill Transportation contributed to Ida's impact Hurricane normal. Labor suppliers release, materials supply

good the months, resilient past that more our have by chain new short is significant capacity Now qualifying suppliers both benefits. of a dozens tell news Rick with which XXXX over long co-packers, XX a growth the supply And and of CapEx next plans. about we course, year support to term in in provides, minutes, few increase will to plans you and in expand term our our made

back the Now to the due the in normal to issues QX marketing rate, half first and to we supply on than year, case abate fill the we lower expect pulled XXXX. to begin of prior compared

in past Our to earnings our to into gross will his biggest we how Rick thinking component a categories calls, in and expected and of are gross significant minutes. On conditions packaging issue expected consistent. XXXX, in is generally our These XXXX. cover materials, and year described remarks margin. compressing raw wide is perform margin we few full Overall, widespread inflation transportation which is continue inflation. We're costs, dealing well labor, with

oral and and analgesics and Just as up opens growth have declined to XXXX. in name a soda remained condoms, and recovered vitamins, as highs COVID litter The few categories and have are greater elevated water categories, has mobility. year-over-year expected. flosser have experiencing from demand laundry shampoo additives for Baking cat consumers dry society

each So now I'm about going to business. talk

Domestic. First Consumer up is

growth top in XX.X% X.X% sales organic this So of on and the Consumer Domestic business XXXX. grew QX organic is

into comment impacted by we on are market brands shampoo made a share results huge VITAFUSION I It household and will that category and shampoo look gained are shares came in the almost last and the power consumption and consumers BATISTE reopened as saw growth now. new vitamins time the Consumers year, are supply mobile. the appears health priority. if QX, because recovering happened. stores our becoming staying, up first a in that's XX at share up QX, of XX%. our VITAFUSION over a to consumption at XX%. that have in few grew XX% the penetration consumers have share grew brands clearly right Looking issues. of gummy six dry quarter more is Dry our XX%, wellness is

due in sales liquid the declined event. declined benefit WATERPIK laundry reliable ARM which supply of litter The WATERPIK year-over-year health XX%, consumption market other that way focus was to news with share In cat news & in dose production. price. major are consumption consumption the HAMMER while share, with is going & dose also unit good the And self-reliant held products, timing grew to Next Products, good leading strong in basis household HAMMER share, now ARM unit continues to & of in-house from is have a continue boosters up continues issues. to gaining points share. consumer to scent But XX is gain we ARM on heightened HAMMER the quarter the year-to-date due wellness. Household retailer and WATERPIK. and online despite that

business is through Markets Global disruptions International to Group. X.X% COVID, came in our primarily International. due up Next the strong by driven organic Despite growth with growth,

and strong led to VITAFUSION growth for continues for International growth Critters FEMFRESH, engine the Asia us. STERIMAR, a the be business. L'il

Now the Specialty one is next Products.

growth prior quarter quarterly Products was Our for with Specialty growth on organic Specialty organic year this actually easy down X.X%. an but was The comp. Products a business delivered strong very XX.X%

both stable a high higher nice And rebound. is supplements. volume. prices by is pricing nutritional this So driven was really our for XX.X% demand remained and Milk and

have since price The talk slightly In rising taken XX% July October let's elasticities been effective have about than and to the actions volume Now portfolio, expected in of we pricing. X increases. pricing already costs, response better our July X. the

approximately effective next portfolio an of to portfolio. to analyze on our announcing price XX% to of means brands. QX in be our place be the can Due XX% of actions XXXX. that XXXX, incremental additional XXXX as increases, pricing additional continue expect have will in That cost of we global on put we that expectation QX of year pricing raised We actions

Now and let's turn the co-packer to outlook. inflation component margin impacted and of gross costs QX. Significant our material costs in

incremental transportation Looking remain input in forward, and and in elevated XXXX. to we costs significant increases expect we expect QX cost costs

are expectations EPS unchanged. Our

growth EPS We to important X% It's are remember we this in XXXX. expect adjusted growth XX% EPS year. comping of that

growth. call marketing out that year important of are by to sales We long It's also a reported committed in expect X% QX year full sales of growth full in maintaining and health healthy we the of investment XXXX. X.X% brands to level ensuring our with organic term

of be many we expect approximately typically XX%. XX.X% we you target and QX was QX As XX% to know, XX% to marketing spend.

up, October continues wrap strong. We're things inflation. navigating challenges to supply Just consumption be through significant cost to and

brands We both expect and as our times times to of bad good in such economic do and well, now. uncertain in portfolio

QX. We give have is to a Rick continue businesses. strong next details balance more accretive sheet and to And on TSR hunt you we up for

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

adjustments, spend was further our expect well customer adjusted demand and quarter expected positive was sales were don't $X.XX, to up shortages any supply prior marketing as strong lower better earnout. adjustments the year. excludes continued $X.XX to the $X.XX higher Third due We EPS, earnout primarily rates. XX.X% than to incentive The which comp lower and as chain fill as consumer outlook, impacting than

into up was were X.X% Matt X.X%. We Reported details year-over-year. and margin. gross the organic also sales top jump revenue overcame right a up higher of the tax I'll rate covered line.

Our incremental to XXX from related gross effect positive of decrease negatively positive points. was our higher a point Tariff additional material Hurricane impacted mix These basis pressure impact year by XX.X%, from partially and the were as gross was of and point price/volume Gross labor. from Ida costs third and margin previous a on offset points manufacturing faced basis impact XXX basis of impacted below margin by commodities, outlook expansion by XXX from costs basis distribution. we productivity. quarter XXX distribution costs, XX an basis costs margin ago. point a primarily was a This

reduce we percentage to net rates at down expense a of XX.X%. to year-over-year Marketing Moving fill as marketing. could spend million healthy recover. was as Marketing $XX sales was until demand lowered

compared costs For adjusted QX SG&A, income interest stock lower incentive rate $XX.X rates. to points legal lower to Other XX.X% for quarter year-over-year lower our primarily and basis of an decreased by comp. lower million, expense XX.X% SG&A all-in was lower interest points, from was XXXX, XXX with to decline in XXX option basis increase for due And expense exercises. driven slight the a tax, effective

first nine an activities in capital. to of due cash full XX%. from the We to And of be cash net being cash, million increase the rate year decreased continue to for by offset expect earnings operating XXXX, XX% $XXX higher working to months

We continue $XXX from year. to for operations cash to be expect the million full approximately

As $XXX. was on of hand September cash XXth,

capacity in Our we the to full purchase to expect year million, outlook a is now million out CapEx year the move $XXX XXXX $XXX This plan CapEx down repurchase On October $X we of as Directors the continue program and manufacturing XXth, a to new expand is and Future up primarily on million. stock laundry, distribution to authorized bright vitamin. litter original due $XXX now timing. from exceed Board CapEx billion. in focused and

future is a performance our confidence the sign expectations robust in flow of the read this As cash and you generation. in company’s the our of release,

sales X.X% as worth leverage we year do we be sales $XXX Our year have ahead the now million allocation to now likely confidence number outlook. full XXXX purchases capital given organic growth approximately and we will of in be expect to of our acquisitions. get our And to We QX, and growth one XXXX October, both. reported low X%. purchased planned And shares priority full remains ratios, approximately approximately Through well. for the to

is strong consumption outpacing shipments. and Our

levels our expect improve We throughout customer QX. fill to

from margin. margin prior Hurricane our last discussed to our in of $XXX that outlook, we is number down year to based the down inflation In majority represents of gross to increases. versus increase an days transportation, guidance to relates million and costs. be due to basis We was previously on broad today last XXX This the impact had That full points, XX points. XX raws That Ida. million now other gross exacerbated labor higher incremental basis transportation expect our cost plan. and Turning $XXX by and

As a [Commodity] is is today necessarily primarily full for price related. our $XX the profit to spot compared now months reminder, year. outlook dollars, spot to just And margin. million protect three movement The elevated previous versus ago. noncommodity we not pricing gross pricing

to expect We be adjusted EPS X%.

gives which strong ago. have year And organic a confidence brands sales the while growth lap pricing to go is actions to growth taken to consumption mitigate, based, XX% and organic as strength inflation us from we Our strength continue broad over term. long almost

our outlook, expect growth QX approximately sales we X%. of reported For

We of to organic and expect up that, is SPD EPS the growth year's to supply return and And XX% rate. per growth a sales would happy due Matt EPS. normal to any to business questions. chain Adjusted approximately share, take adjusted last to more be $X.XX be with I from expected our constraints X%

[Operator with Instructions] Rupesh Oppenheimer. the question Parikh of first Your comes from line

chain the QX thoughts I early So and just any top significant magnitude to year? next the frame of it in in impacts your and of supply there line headwinds. Is a impact initial guess here, how like was first terms on way QX, with just the

fill The what are I good, consumption top closer at want are the a we in consumption division but levels in at domestic was, to the the retail to levels was, If high are for line pretty shelf, our be organic the stock in in in think, was XXs. XXs, We mid-XXs. From look X%. our mid perspective, remember, X.X%.

depleted And degree. retailer inventories so just that means are to some

math you between consumption. can and do the X.X% really So the X% the

increases expect mean next incremental current at for the way what prices like as And you you then your any there today significant mentioned as side, cost on next year. that you and could of look spot guys to Is quantify, so significant year? pressures, or cost

to us be would imagine questions there that. quantify XXXX and on I lot will of Rupesh, want a

say. what I Here's would

to to versus is price dollar expect at our cost goal increases. the of said, time 'XX like And dollar year is plan Our a I we increases this significant in with year-over-year, the work incremental offset 'XX. process. increases for cost have, XXXX And

another well. be chasing personal to happened so that look April, to primarily as and digits. ball priced was is will But everyone downhill. that to at mid today, digits litter, friends single but single XX% likes flossers in say we're another mid- a showerheads XX%. that was soda, high high single baking digits. is you in saying And and what's and is high there's XX% laundry July, as that's This my And one far, If and care was and that up we largely of additives,

to April And the even July so since the escalate, have continued costs announcements announcements. and

to color on as So But But 'XX causing our pricing as decisions things go we're Rick of cost add on maybe little to couple probably are want to next far year. you could the 'XX. going of would incremental bit give that's that Rick, you probably revisiting that? we be And do anything increases. a a

to basis we're and hundred the Just outlook, you was our kind points. if margin be largely the gross seeing. is bridge going by to at triangulate Fast looked couple months look forward QX price. a in at or even tell July dollars, for the that of three forecast, you of example, what gap offset seeing would I were we we inflation our that and

why as pricing, parts that's the other -- we're said, Matt more so revisiting doing pricing And we're portfolio. that's for of why

give large We to of assume it's a at at now. efficiency that efficiency but we good for improve, levels are into I There's and macro outlook as transportation the we are as assume tightness. mitigate our going trucks we'll fill going to going -- us, best for tightness, a it and XXXX part move we're to labor to is The elevated. of But much going as no-brainer do pricing to in we're this though, that in you as as improves. thing is tightness think our We're assume can still the spot January. going right that to we point our improved time, we're still

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

of I especially thoughts for to because your part assortment. kind issues looking obviously get is around Retailers rates wanted it So efficient that, into, obviously, pretty -- chain weak. you've obviously, to I algorithm. critical fill the a such relates got are wanted be get supply are your more innovation, innovation as to to of causing

of XXXX, think think you provide to and kind as play maybe going on So forward of how about context kind some you just that's out? now that you going can into

new we did have lineup 'XX. always a products robust We for in

and We have ideas them great ready got 'XX to go for in we 'XX.

So as are it retailers attracts to innovation know, increases, interested consumers and in you store the footfall.

consumers that for healthy shape good The sheet XXXX. is, -- think for we balance now. in we're do think question is our right I So the consumers

for rates disposable up. are going is is gallon But income one other of headline So and way savings so the up inflation a is the gasoline. $X

as to demand couple sustain stimulus buy sheets as of think do balance household a willingness far stay the strong the although demand moment. for likely, As new at strong products strong, for I to do are we'll buying the And ended. the term, quarters, and has got influences we lineup has But and often poor we is in for and seemed visibility their near intent. quarter beyond the two, somewhat we all flushed XXXX or at a least consumer know. that good think,

-- migrating quickly exploration the newer, if follow are pandemic, want I brand, well-known people seen Difficulty]? and just tick exploration for in safety to store of you a of reasons. kind up some get to could for the actually consumers Have obviously to looking comes back during niche Matt, consumers those of health up, it when [Technical And out and drops,

that think the larger Nik. still I still wouldn’t winning. I to yes that, are say brands

Raymond Your next James. question Tong from Olivia with comes

on Two questions pricing, not surprisingly.

competition price had you better just on anticipated. new bit similar also elasticity you took, you price Do in it that was take. pricing more know on a taking little color pricing whether the already than personal mentioned you then First, care? increases the And you [Indiscernible] your is

if in give curious anticipated more you a terms what bit with little what and of you're color seeing had consumption? Just to respect you impact could to

products, and announcement, percentage they Olivia, baking aware of our household to and a moved, on The of are I categories first have in wouldn't cite largely already but you going those and July laundry, categories nor if remember. in also more, where out we the a on, two they're where are increase there We people moved We call, on expect moving laundry early the competitors couple our litter, call couple that personal care But additives, be April care. already would are competitors announcement had. personal we rounds. soda, this

going personal is as up be to respect next So as but care, with far that's can go to I competition.

the then elasticities, happy many household for really products. of on at it's And I'd say we're where

move example. had But increase, litter did is is move. in originally our good. price not math in told when in I than I laundry obvious it's and the starting litter well. better And moved you assume to first an as we And think has which we elasticities of then did our moved we competition the all expected, competition are forecast about litter, competition we when as that

by year, And then get a because back marketing Should fairly all to pulled obviously, plans, getting given then those growth spend in better. the fiscal 'XX year also, a you pricing decent given as next expect And progresses? expecting this of that chain challenges bit reinstate to in-stock be time consumption, different hopefully, levels. terms of Are a the do little kind little we supply factors? bit quarter of better

Let first. me marketing take

is but Olivia. up year-over-year it's sequentially, down marketing So

we were sales. of So the may like digits, marketing half a the first you in remember, high of year, as percentage single

QX. down we QX XX%. Yes, from we dialed to is X% less it and XX.X% be QX, So went to to XXXX sequentially we QX from than in it up but QX expect

improved stock dialed stores the your And was? question what in have levels in second the up as marketing. So we've

is chain those consumption do little it's time the Just constricting around you solid a you're supply the because as better get that are progresses. if just hopefully, bit challenges relatively fiscal taking and pricing, 'XX, and

be 'XX growth given also pricing but you better through? if coming some challenges alleviation should a wondering year think Just of fiscal

We're lagging of quarter. there's not in also say, have stimulus in in we consumption. our value next going macroeconomy We do tailwinds. yes, yet. when XXXX outlook cannot been any matters. well through We'll And repeat XXXX economic premium, lot Matt and for environment, I'd that XXXX. have a level that to about comment it on in that shipments really detail go talked

the on So are brief those the outlook. comments

ago. in we I XX.X% would at marketing. what market XX% to a in and of well would just We a QX are echo year spend Olivia, almost were in ago excess marketing what say, normally Matt in QX But year said. almost Those

So those XX% really and Evergreen right our comparable the right aren't comparable. model The between is XX%.

next Your Morgan Stanley. Mohsenian with question from comes Dara

So a couple of things.

one, mentioned significant. and word expansion capacity I think release and you Just in you the in the used XXXX XXXX,

And each are that outsized So us is out the of of something an for year? hoping spending that there volume typical or really unlock? help years? you a as to spend capacity percent Is it areas what of there can more potential history? of more that's level increased sense you're investment over couple just expecting versus Is other level where of just also give the you're look you're or capacity next building you

litter and start we has of I'll that laundry, we then alluded capacity kind new Matt year, CAGNY investments Maybe for This news. had and something vitamins. this significant to At add. isn't to

just of XXXX. supply and Typically, in we line because it XXXX finished the happening to X% I for had projects Today, time think, I think We goods CapEx those on be X% our and also chain Analyst is are it, CapEx in XXXX would same spend signaled we are have as slipping challenges we that revenue market. providing a lower and said closer of percent installation some at also of or Day.

and of X% that in million. outlook that sales. higher be of back our million to even for excess would and of than will XXXX, say would I XXXX it $XXX down excess is normal in $XXX that So flow we're In our

Dara, are And our litter laundry. largest these businesses, and vitamins,

faith got of lot brands. We've consumption. a got we've So tremendous the in

because adding to years well it's going to stand real us for excited So we're capacity, come. about this

when taking you product And time. then have in through space supply guys here, at going competitors the But granted significant you're a time pricing US, share gaining shelf are space also, done issues over great job chain second, just in so you're on shelf some there's a limitations.

cutting level. it's still guidance, You're a robust marketing versus at understanding original

any So see. not about perspective creates things for if safe a that shelf just on that? how that risk curious think typically standpoint, Those to any you retailers are from like

given you risk of just the about think of of are dynamics on the So going sort business in level the that how here. some

with respect don't see alone, frankly. et Dara, to the know, I raising prices, We're not risk, as cetera. you

a are for QX super our now. XX% think I it's keep that rate and X% growth out retailers growth consumption strong. mind top on was of of our right see in almost So our that there the And field brands, playing in And products. is level last year the our they demand you aware

So losses we're our of not a worried space actions. as result about shelf

Your next with comes Credit Gajrawala from Kaumil Suisse. question

I First, in plan. where back been a and quick buyback from about the acceleration bit you've what it does buy recent intention to years Is before? one or you an make maybe of a new doing signal were on continue to

we've look record, a million you every And years cash and hundred did at dollars million. closer year. our few we when few to a built, was track $XXX If back each done

I million tell in million $XXX somewhere you. would $XXX that range between is So and what

to Difficulty] material are started there's a or installation. some some are level relates you than other costs happen roll then still would, a in raw otherwise [Technical now And 'XX? those to what at they point higher -- But it hedged know probably degree at lot or increasing numbers in roll maybe point terms of Obviously, have maybe as then those of to because off and we hedging offs later costs.

my answer I'm going to do that. to best

asking believe I significantly. about hedging. is you're phone Your the up breaking

XXXX between about about of about $XX hedged as thing. good we course, a of we from And we're $XX the worth don't a are now hedged, probably, for year, million which hedging. And we million hedged. significantly were as there's XXXX, benefit enter XXXX. And know, XX% XX% entered I and was We

on headwind a that, that's but new for just known a about hedges are managing layer to our so we've something we long and that that's do. And versus time as

expensive. now, As hedges very of right are

now. So for a as offer reasonable spot XXXX. less banks The towards lean I made up any think, in in market right market to volatility the actually we likely of XXXX lot has, the of the hedges

So that's the overview a quick of hedging.

Teixeira Your with JPMorgan. Andrea next question comes from

take competitor from just But likely? depressed point alone. sensitive do level related main going and last about not widening closing categories in about If that, the the a to I action obviously, and compete that. back you of the the pricing couponing, time increasing much think, gaps. rolling like in around I think pricing I price that you've us fact price in there? well to it. segment your most price well like, coming feel these think have rolling help year. reconcile some So as for most seen can some kind And for and pricing taking as and that the the been back you obviously, volume you're In to too point, is point, this the increases private elasticity, the at the done any price gap believe, And areas you've color that out, as of roll gaps labels, the given I How from you

competition we has said, Matt better as are on because and too Well, I elasticities expected than moved. mentioned elasticities,

that. so really And happy we're with

a bit trade little in I competitors, whatnot have more QX, of below couponing think we normal well as example. an or as back but trade or we're levels do some and added they higher laundry,

price would I it's from gone say Andrea, overall, than think perspective. I cap So a better expected

enter roll But XX% mostly from the XXXX of going to you're hedging, that doing off and spot. the now

pressure. the will the net hedges. is, think, So and headwind of $XXX quoted cost be million I you massive That

extrapolate we going Is I'm that's think obviously, to way that impact. should that XXXX. So think? be about the a bigger into assuming. Obviously, much number number, that to

our take let's $XXX if back. year-over-year number The a or you big in -- is COGS. about let's is plan, Well, versus million million step add X% year-over-year. talk of about outlook, our $XXX just

talking a the $XX things $XX comment to in peanut the inflation on XXXX. talking to we're about. of about that's scheme hedging my I'm million $XXX What in between compared in the was year-over-year grand million, that the So is million which

yes, so rollover. And a that be will

will based about latest be that categories it's within many And across actions broad one different pricing price not many movements different competition aisles. in even about we because talked or rollover. different of Some we've feel categories within a just pretty these CPG, that's good that But category is moving. it's what

fine so $XXX would So is that is million, on prices on all equal. or curve? just million be to point spot that, that things $XXX forward But based based

That's XXXX versus XXXX, actual.

it's pricing months for last the spot of two year. and So actual then the

around last add of only the the then $XXX would month And or year that's you more… $XX million that on million

Andrea. No, add forecast year the any would XXXX have full we million If for million $XXX didn't It's you to another $XX XXXX. hedges, versus $XX million.

much obviously, lower the XXXX, And then year, now. seeing than the than pressures were because, we're beginning of for the it has to that be higher

wanted I to what make understood. I that's So sure

in expect inflation We of year not on called top inflation. X% I another to XXXX. would X% have incremental inflation of

Truist comes Chappell Securities. Your Bill next with from question

guess marketing. seeing up my back supply on Nik's question Just following question innovation. I shortages on and pulling is, about you're

go we of first the the year, at lot point, and a in same sometime in step And will said to marketing the the to that mean So typically, chain you I products you've to sure as we're not out until up roll of supply XQ in normal or in back half. don't flip XQ. first of terms believe about be you're things new you

point? those gives One, marketing that first of this cadence And does behind of and like two, or in things that you I rolling stuff it at what the is improve does change? products kind So normal half? it confidence change and your everything guess, out new

the some control. of we're what that Bill, saying to issues that is because in expect supply abate, is we our

our we we rates XX%, are do to improve expect few fill in low next think the -- going normally even over XXs So that, months. and today is they're that though the

So leaving we're customer now. able that's we been orders a good thing because meet the because to table, right money on haven't

marketing. QX marketing as far as quarter for typically, lowest is So our goes,

in April. new QX spend But and March, X%, So shelves do in you around marketing wouldn't it's expect hitting start right, in a XX%. pickup products you're oftentimes

the So QX when of start the we off marketing. the month is quarter, up amping

our So be that right would now. plans

kind So of fill terms April? to gives better what things rates you get trying by are you're saying that where of what improving confidence -- month-to-month I you are in mean get just

with of Well, in suppliers because touch and all our co-packers. we're

up optimistic we largely to kind but We pressures And that. due nature also up. that recovery Ida than and was at additional been in ended happened, where have If we road and the disruption. Hurricane by hadn't further spot on to of along we're the would ended hurricane same

you had are products part those Yes, chemicals household, that chemicals coming the force Bill. as And probably We all just affect US, know, those well. personal majeures. seven not care of it's from that

get better. going of as rates fill improves, and those those to down are example, Louisiana, take suppliers sorted So are things just our in to talking of are for going And that out, we're getting to they up demand. all go improving, things and as supply advantage the

the of of look of kind kind in over category back vitamins you've more And versus patterns kind consumption? as then going of one past their XX how Is consumers stay of particular. done are many of in back to the the normal at we this, understand in they come there out terms to go work last to you as incremental vitamin months

us tells year-over-year. work up is almost penetration XX% Our that household

the people So coming seeing purchases. into repeat category, repeats is what of we're new

great. like rate XX% loyalty high plus, is a With which of around

continues. of consistent you two, that XX%, capsules another And and QX, guess, XX%, to has year-over-year, two up label one 'XX, like quarters, -- one, just just product good of in is declined 'XX. if I up transition And you wellness other the XX%, at trend; QX, guess is up course the that from lineup VITAFUSION all the that I in we consecutive it’s new gummies, look if we've good private numbers, consumption gummies, QX, have got So And noteworthy pills tailwind the three quarters. big three look the tailwinds, quarters. is Bill, share in at thing

of fact, too. So that's a kind fun

the of CapEx. of we're that's on to of reasons why in in So ground businesses, and beyond. to one spending 'XX anticipation iron we're really in three one be about and the optimistic of in we're a lot the some be 'XX vitamins putting growth going money going It's

comes with Jefferies. question from next Your Kevin Grundy

CapEx, I pick going to put one, in of point the ground clarification you're or could the up if last you the Matt, as on just to it. a referred iron So around

on So guys co-packers not over XX%? is past still the I’m Is have the up. to right the months. that work to And stepped use of is I step through and the the a other follow-up. supplier building have of going to XX% If that obviously I'm you much going unrelated And co-packers. rethink mistaken, there XX business an the How CapEx? the currently amount point then on The have number? about that co-packer, of a change tremendous clarity, out goes up of you side done

I company. wouldn't reason our and to expect number we an go model way, asset-light is the that for that, other that Kevin, operating simple the that are

cases, too some options in the exposed COVID sole Yes, illuminated So that with suppliers rely on co-packers we fact bit not a sole that. we little or remedied we've but were enough just or do co-packers.

that's to buy coming additional we're with in is -- and strategy that shape not plants well same we're respect wind mind the think COVID. for brands of going out are great up And acquisition in still prefer We we to so CapEx. needs as additional and our So co-packed keep unchanged with that too. be businesses to

So no change.

follow-up quick it for and on. a pass then Rick, you I'll

sound understand implies basis. X% guidance, But fill deceleration Just which year two of guess consumption better, the two data. a or I in stack better fourth modest trends sales growth the organic on strong. what the to We the is on quarter that are Nielsen year rates like getting encouraging. guidance and The average they're trying I'm see

points. just I made improving then fill are maybe think you the in the lighten data maybe the me Nielsen better guys the little the trying rates, bit. comment, also we And help a what will typically SPD I'm triangulate data see reconcile the guide trying to you to understand conservative, but I that. understand quarter. just for and I'm up

part really comp ago, QX rates. normal It but was in QX. back because things. And the SPD comes comes organic two a fantastic to down growth is It's normal. year XX% had of of One quarter that to growth a

the growth conservative company organic is And rates. the fill rate So I'd other on in say the is deceleration we’re maybe the the half SPD. being half

continue it in they but then still first to XXXX, we're half said As we of assuming the And they're to normal. XXs. the improve in low gets back

rate I a times kind that's just number the XX% QX, demand quarter, have in bigger it's happened of earlier you in when domestic. fill or you say just we that's because would saw on for over-deliver when So of continues QX consumer what like us probably great conservatism. If out-delivered then consumption then unbelievable and we

we are still story yes, So impacts us. the short fill what is think rates

with Your question Lauren Barclays. comes Lieberman from next

products which But supply if on money missed are it. you you're the table? where most sorry have suffering or I'm specified chain-wise, guys categories leaving the I

said, and around after We alluded Lauren. Hurricane force of and Matt XX%. seven personal in it's care. haven't, having fill We Ida, general, as And majeures rate household because is our to,

broad-based it's pretty So across the spectrum.

of tough kind Are of still supply question strength the was households? a a But lost but the or Because brands be stock back other bit a of industry you your competitive about and those consumers majeure more with if others going for as what's well it's thinking couple to categories? knowing an denying label to and one to come recognizing the just we risk may continues the months. you've and if stepping in Are or private which not on those thing your thoughts around in? admittedly factor. producers some of set I going categories and brands, go without forward But impacted, curious shopping about into ask be on constrained that's shelf are force is less categories little

I'm too. stock are Let In Fill But levels. comment, are rates Matt color, stock just low XXs. sure one in the some me the levels has fill to mid-XXs. in rates make and between distinguish in need and we

able is clears mostly buy is What's warehouses to being product. shelf happened very and Hopefully, or of their it that in lower. depleted, are inventories our our up. consumer like some a to not going So rarely retail inventories been have

And good levels the earlier year. in-stock as in the Lauren, weren't

improve them quarter. seen the of really quite got towards bit, as end particularly third a we we've the So

not. going the earlier were in brands in we QX, the have a back into whereas ahead, lot our year, looking mid-XXs, they So low of to

an the So might more I for think be quarter. earlier question probably relevant

I because also couponing And much spending might or want fill as say, exacerbate we to haven't don't we shelf on at spent well. levels as trade

it's And QX. in did was what marketing marketing, in look at XX% QX, we X% you with if

dial improve, in-stock we So to to marketing. levels obviously, the up as started started

already also spend degree spend on more said, pullback is terms in there of And The one couponing. trade to the you piece marketing is rebuilding. in is the as

and Because okay major to more growth if year, would about consumption So them to are next we leaving shipments table, or it's when talk catch-up inventory, on filled. the even to that major happen be not for levels hole like like get not think there's have when 'XX? a stock there's like full the money the into some rebuilding retailers that closer we has needs sales it's to to about

about about in-stock think shelf. is The we to thing levels, -- we when go talking on and we're about talk

is DCs, Now the the the in distribution hole centers.

is to the to hand think and gap consumption shipments. close where So mouth it's that's opportunity and between the where I that's

earlier. was the was QX in so to that QX. really compared It the Rupesh consumption comment And organic in to my X% X% or

it as Club has at And their opposed inventory because trade class their only that's Club, stores is Lauren, the of not true DCs. to in

my just the SG&A quarter. then lot a was was question second down And this

short there piece of of incentive and that's a was for the of that's holding the But -- that so happened litigation You together also kind apologize but what P&L I being now. was big this kind comp. term, but cited quarter,

guessing So if begin so knowing what of you that SG&A a pretty But in lot as to you continues the flexibility. you But have there's that to control line, that's lots we to much less given build. there's tightly in pricing money during ability look fair, work into marketing, run I'm 'XX, to SG&A flexibility put the of XXXX, line, with. interim,

on ways just curious the perspective was cost still I mitigate on to headwinds So some your pricing ramping? as of is other

that few very hard down? that and our proud targets, donut incentive gross incentive that, very largely down but of is Why actually times gross and comp. the impactful accrual It's is a likely it's on -- in margin comp margin so because do SG&A we do do will we be in we companies have comp. We're that's for this. that. incentive do we're like But and because

year higher that And levers we the we be with get things all that we plan So things and going to a pricing the number and have you two But SG&A. and we inflation next back is hopefully discussions. rightfully conclusion next that's and to as had, SG&A Lauren, will do. have going far behind typically can away hit number offset offset productivity that can be one that be year then

year, gross if incentive And it goes year, up? up gross be card next on margin we could donut that margin like next a sounds comp, hope meaning for in is

Yes, would happen. that see employees that we to have like X,XXX

Your next with Steve from Deutsche question comes Bank. Powers

wanted term it I talk dynamics. to that covered supply sort of about, But cadence cleanup near relief final think on of talked The of some what I most seems we've the guess constraint like gradual I'm of about. just therefore, that I you've sort next continued, multifaceted and -- of year a into of rebuild point it's gradual of or more complex. opposed assuming cliff some kind a binary to as And recovery. ongoing of a

validate we kind just that, as discrete of you even more can it's that of path some a be of thinking bumpy to that should opposed glide So milestones set about? kind a

think you I Steve, answered not switch. and asked it light a it's

in to So not a at any be point time. there's going spike

then to when for to November, telling you fill a you the for able together our the end for in is we expectations what to and to how be of So we our build hope get October, able in you half. rest to December first example, sense tell January, started January, is to rates, improvement be we what the give be of hope

not go consumption shipment happen from strong sudden that versus slight like a And progressively. that say that ahead. happens, sustained guess I hopefully, so and base that a recovery all you It’s switch of as -- cases sorry,

up back stair brands normalcy. gradual step It right. faster would time different and recover as a to exactly is Yes, over be

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

with portfolio in echo a where that guess demand that's longer respond bit regard, to valued I period comment elasticities clearly already. it there's as of the that keep different dynamic been & guess the offers more many environments, I covered this Church economic a piece the piece Steve's where flexibility nonexistent. but in premium. to we're maybe have questions this I'd so that's I'll term. Dwight there's This basically And are a medium,

relative how don’t guess more about does pricing. context portfolio not I environment anyone So a you that more guess I at like expand shelf maybe see I think gaps lasts, theoretical, end it's positioning But aggressive I that this price look does. XX% the I in of thinking your this mix versus offers Maybe pricing, means value on elasticity Maybe almost price gaps? more raised QX, your value I'm don’t your because be know, of the portfolio? maybe just it how this it's get credence sure. pricing you portfolio bit value on I'm of relatively demand to is but pricing. give long have less you would. mean, theory, close mean, may to to typically in I you than going but in

model we But gaps. price. we long and preserve round XX-XX lot split the to of of want categories price We at do price and a term and work value. up continue do look and raise want price intend when operating between -- at to of preserve that you’re our the doing your are on we in this that we have been the where And part look we has closely always raised think that all is pricing premium to do to gaps we're what XX% number portfolio,

and have good bad ability always times. in will well perform that we consequently, So to

So not we'd be up looking now answer to directly, drive question value brands mid-tier. into, these your say, to

clarification. could just if one I sneak maybe in And then

in is as shortages part specifically you Certainly, household that that a is part on that. shortages improving part surfactants. a that had versus of happening? everywhere, suppose, couponing But is shortages it the I couponing portfolio said, less -- are that laundry mix, and disproportionate said good but of that, I you said pricing seeing there had share past, that of some it's think around is Is of laundry the based? think in the broad seen rest you as or I are

As recover XX% share supply that in the it's chain cases, most disruption of cases, largely happened. had would you I see say,

because as supply certain it's So see improving. you largely -- so in areas, is chain recovery share

Your comes from Grom Peter next question with UBS.

read it's know potential on forward? on going like I just kind kind like I a the ZICAM, impact how about the revenue of think we And should may growth lift I the then was it organic guess, your early hoping season from So company as moves flu cold to just kind have to just early, into and total get organic, normal of season? and but your of cold and this flu

one in like know, you at are end of as bought brand shares And super It's really number the shortening XXXX. trends events, consumer recent encouraging. ZICAM cold XX%. to Well, high the today, us we

all ZICAM, QX You consumption up in week. But comments key XXXX. channel QX, quarter. you for often that consumption full at not QX, some XX% look of channel that's probably saw XX% And our this to earlier all of versus if QX about we're in the increase XX% year sales. is [Rickett's] XX%

we opportunity growth expect what the did had us. and of that we And contributor in be. we been think to sales XXXX, wouldn't in last year, profits buy depressed a because do to ahead so it back might brand and quantify term be 'XX. thought But that's it's So because we big a it long we

it just it's and levels be good a cold flu gets season. of if back going to say to would normal We tailwind

-- more give We'll our January a give year probably comment bit that little could XXXX. on you outlook in on more we full when for color we

Stifel. from comes question next Your Mark with Astrachan

back and not go to you year. not to lapping wanted lapping I stimulus or recurring about next about statement the that an made earlier

head retailers of with curious may into a go on parts, how products comments, would we level Any you the color of kind you percentage or discussions of you plays sort sitting I'm but for this of context about next as sold through moving they be of year? in what all we're can how at high asking out give of helpful thoughts, of as here with point sort that that. that the Obviously, promotion think So be in lot 'XX? on terms any

did shelves were period to it that Well, it pull lot promotions promoting promotions make of on look, pretty because be early and a couponing. completely this we sense did stocked. -- back on And we to didn't

of into towards are earlier, As I ahead the XXs. QX end the particularly looking QX in the approaching stock now said and levels,

back an that well course, some we And introduced that is XXXX. starting trade well. to is or in decide introducing opportunity we to as that start intent are of that of there watch But have consequently, is So to QX. competitive in as our back in, how little to promotion of actions happen much how something

next comes from Andersen question Your with Jon William Blair.

the left There's not but on will much bone, I go meat with this.

margin like recover bringing utilized. manufacturing plan to pricing before you're that new comment overhead sounds So your to add offset up being it about incremental guess gross kind I to could capacity year. maybe of a that pricing, the capacity follow-up Lauren's And at And last dollar next on I'm thinking inflation, fully on your margin rate. least on gross bring is also not or

gross historical seen from for kind we've than XX expansion? good could XX, outlook about margin time, So next over be of secular it Church of gross the what as different you've very the had a longer think period where margin we months,

you of to said January. But defer that all and firming We're what on we're think talking more pricing of pieces. right, think margin moving and right we still do gross that's plans XX%, going the going question all the we'll and up our moving the dollars to details margin that the all January balance protect you are give we approach, in not outlook price our but when detail give for those other We're we pieces. to will we're of to about all we the

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

this out quick. Looks like Real I'm close to here. going

those How worse. but levels can as are you improve those levels For in-stock to shouldn't kind of coexist? in-stock levels? been restore service you better mentioned are overshipping You

your up drives that increase, what orders a I shipments could you still have mean? low fill Do As you but rate. know

have you is in-stock XX%, levels high XX% you in it still could at theory, exceptionally and still -- shelf. can have If you demand fill

so in and maintain but the potential the the it's -- The not but hole be in levels, hole you DCs that's still the we in stock are staying It's is directly shipping DCs. more, in that's to improved tailwind. to the may stores with opportunity stuck going the the

we So dollars have if you you see in it’s as past graph historical just and Jason, example, levels, are practice the just and so similar demand is would the that dollars strong. to shipments, an shipments that

a problem, suppose. high-quality I That's

margin questions around the margin well trajectory, but initial lots plan. coming below marketing of in your with at Looking gross are lines, budget you

your plus because well, restore flaw in and to comp year, gross respiration to between somewhere and to it's margins, are XX have a to to What's going they they're basis year. to hold it’s [lendings] margin imagine, that think say, of points hard incentive on I XXX I below. restore And the thought and look XXX SG&A so next have gosh, point or going the look fulfilled say, you’re that to to step gosh, back the not next process? like just year, lines. got basis that next And going

many times line, range of XX% that a marketing to the XX%. we've said it's think I

I marketing in boards, our in percentage. as if of elevated, pretty XX.X% was XXXX, XXXX, swimming that the from about XX.X%, diving talking history we're company baseline, and the of that dive. a high extreme high -- that's an you're think off I that's if jumping was for spend And the think, in QX all-time

end So very we XXXX. the in were of flushed

our will plan ever we our so I had that incremental And past. that that range, the marketing more the probably in we spent than be so model XX% XX%. within lower And would and range. say And end back evergreen of we between XXXX is think

high say, So to XXXX going example. an we're of is some XXs flow the would the is not to get that's as I in up back partly,

guidance. referring last I to year, I just I be XX.X% asking to wasn't tailing did XX% guide the was going but to quarter. to just relative think you last

a looking at cut you we're expected what substantial So relative to quarter… last pretty had

full approximately double last I check transcript, for XX.X% was number think you Yes, the time. our the year

you to of X.XX is And obviously, hard the the precise fiscal SG&A bucket of percentage spent 'XX, of in kind of like year. X.XX, spend. well, we day level, day, the up sales at SG&A still up debate all be relative 'XX end that's it's can down this but versus believe can to long, And big a to Why grow back you're heavy in to closer going to 'XX? something is 'XX, to And we reason 'XX? there incremental And but to versus again the that spend 'XX 'XX. actually a or get

higher question, is So your is even why incident than 'XX excluding 'XX? comp

Substantially but always a put in absolute spend. of kind rate meaningfully. And of dollars, in of I higher. it's terms out Yes. there, But grown percentage know you've

needs reload lower I'm the could offset marketing actually And SG&A actually next be or not questioning or to year? looking year. next for So I'm it to really whether opportunity grow

we actually that some XX, and don't to is the biggest those very 'XX probably amortization. over trade we in typically 'XX, Well, years. are names typically do, of movement we deals amortize do from the probably conservative We XX

have ZICAM between so mix, an had into the adding example, would 'XX. And 'XX as to amortization

December We acquired one 'XX. that in of

company. find lean. things for and that's way. in back to for bigger a we're us, dimes. into We're we But office is tend always RPA a And look, and are a centralizing offices those our different our investing at for how Asia we looking we're lean all things way nickels heavily as like back But SG&A go forward.

get through today, spades it in too don't to in again, So to January. much XXXX to want we're happy I go

Matt are Chief And this to the Dwight. of to Executive I no call now over would Farrell, time. there like Church further back Officer at turn & questions

everybody everybody, interest, questions thanks of the at for we full results thanks, forward Well, look lots great with our of and end QX again 'XX. to and today. for Okay. And your joining, updating January year and

have a participation, day. today's gentlemen, this your concludes Thank and you Ladies for wonderful conference. and

may You all disconnect.