Q3 2019 Earnings Call
These statements are subject to risks and uncertainties and other factors that are described in detail in the company's FCC filings.
I'd now like to introduce your host for today's call Mr., Matt barrel, Chief Executive Officer Church and Dwight. Please go ahead Sir.
Thank you good morning, everyone. Thanks for joining us today I'll provide a few comments on the quarter and then I'll turn the call over to Rick Our CFO . When Rick is finished we'll open the call up for questions.
Q3 was an outstanding quarter for a company.
We delivered higher than expected, 3.6% organic sales growth.
We had gross margin expansion from the base business and 13.8% adjusted EPS growth and that's just so on the release, we exceeded our outlook by six cents, partially due to its recent retroactive tariff exemption.
In the U.S. organic sales grew 3.3% or categories are growing our market shares were healthy as evidenced by nine of our toll power brands grew are held share and majority of our power brands grew market share and in most cases this was achieved while reducing our promotional activity.
We continue to have success and the online class of trade online sales grew 30%. This quarter, we expect 2019 full year on life sales to exceed 8% compared to 7% in 2018.
And many of our power brands continued to be number one on Amazon.
Our international consumer business turned in another excellent quarter with 8.7% organic growth.
The standouts in Q3 were Australia, Mexico, Germany, and our global markets Group, which we formerly referred to as our export business. The global markets Group grew 13.7% in Q3 and has been outstanding contributor to our international growth.
And it is noteworthy that approximately 90% of the GMT growth over the past three years is driven by sales growth of existing distributors the balances new international markets that we have been entering.
International is a perennial bright spot for church and Dwight our long term organic growth target for international is 6%. This business has averaged 8% organic growth from 2015, 2018, and 2019 is shaping up to be another exceptional year.
Now turning especially products Q3 was another challenging quarter as organic sales declined 4.1%.
We're out 2019, we have seen lower demand for animal productivity products from our dairy customers milk prices have been increasing for the past six months, which should bolster future demand for our products.
We continued to be optimistic about our long term, 5% organic sales growth algorithm as a result of our acquisitions of businesses, serving other species like poultry cattle and swine, let's go back to the U.S. consumer business for a minute I called out a couple of highlights in the core laundry and dry shampoo.
In the laundry category, which grew 2.2% Harman hammer larger consumption was up 6.6% and gained 40 share points.
Extra liquid detergent consumption was up 2.9% and gained 10 share points.
As anticipated the promotional environment in laundry continued to abate, we significantly reduced Harman Hammer Lawrence you percentage sold on promotion by 580 basis points, while maintaining growth.
Our new laundry product arm <unk> Hammer fade defense is doing well and continues to meet our expectations.
In dry shampoo piece continues to gain share with 26% consumption growth more than doubled the category growth of 12.6% Tces a number one dry shampoo for the 15th consecutive quarter.
Now I'll make a few comments our most recent acquisitions.
Globally water pick continues to show growth and it's a number one leader in the category with market shares in the high Ninetys order picks you to date sales growth is 9%.
The business is on track to deliver high single digits growth.
Internationally water pick grew 35% in the quarter.
We're replicating the lunch and learns professional marketing program, which is used in the U.S. Big International opportunity is increasing household penetration, we estimate that roughly 22% of U.S. households use water pick compared to 3% to 5% in Europe .
We're also seeing growing demand for waterflood serious in Asia Nexus flawless. This is a business that we fired in may of this year in the first half of the year flawless saw strong sales growth up 38% on a pro forma basis in order to get to or 15% growth full your estimate in the second half we expect.
Pro forma sales to be up slightly this deceleration was expected because we were lapping the 2018 launch of the flawless brow product.
Q3 was the second highest quarter ever flawless, however, pro forma second half sales are down 10%, resulting in 6% full year pro forma sales growth.
A couple of things happened.
One important retail customer has been experiencing operating difficulties with a 7% lower same store sales, which affected orders for our products. In addition sales are lower because we decided to delay a new product launch until February 2022, better coincide with plan a gram resets it's.
Jordan retailers, where we have had significant distribution wins, it's very important to our growth plans as we transition this business from being displayed driven to win in our brand. So based on distribution wins. So far we expect a 10% increase in our HCV in 2020.
And we're very excited about the future this brand and expect 2020 sales growth to exceed 15%.
Regarding Q4 are you today performance in the tariff exemption have afforded us the opportunity to reinvest in the business.
We always managed church and Dwight for the long run and that's been our longstanding practice to invest over delivery of earnings sit back into the business.
So on the release in Q4, we plan to invest in our Asia Pacific partnerships and are accelerating investments in R&D predictive analytics supply chain and sustainability. So.
So my conclusion, we had an excellent quarter organic sales growth is solid base gross margin is expanding and we're on track to exceed our evergreen business model in 2019, I turn it over direct right now for his comments on third quarter fourth quarter and full year.
Thank you, Matt and good morning, everybody, we'll start with the P.S. third quarter. Adjusted EPS was 56 cents per share compared to 58 cents in 2018 up 13.8%.
56 cents exceeded our outlook of 60 that is a six cents Pete we had a favorable ruling on the company's appeal of tier two tariffs, which helped the quarter by three cents and the other three cents was two cents from business performance and a penny of marketing timing.
Q3 reported EPS of 62 cents.
Adjusted EPS excludes the earn out adjustment for the flawless business and as we discussed in previous calls this quarterly adjustment will continue until the conclusion of the earn out period.
Reported revenue was up 5% short of our approximately 6% outlook largely due to the lower fall a sales and a currency drag.
Organic sales were up 3.6% exceeded our Q3 outlook of approximately 3%.
As Matt already covered the divisional performance I'll spend a few moments on price mix and volume for the company.
Organic sales increased by 3.6% that's positive price and mix drove a 4.3% increase.
This was slightly offset by negative volume of 0.7%.
Lower volumes resulted from lower promotional spending and the impact on volume from price increases.
Historically organic sales growth has been volume driven and while volumes have performed in line with are better than our expectations in response to the recent price increases.
As contributed less to growth over the last several quarters and 2020 and beyond we expect volume to be the primary driver of our growth.
I'll now moved to gross margin or third quarter gross margin was 46.6% a 230 basis point increase from year ago. This is 100 basis points better than our outlook, which is due to the tariff exemption benefit.
The full year net impact on gross margin related to tariffs and 19 is neutral.
Moving now to marketing marketing was up 4.7 million year over year marketing expenses percentage of net sales decreased by 10 basis points to 11.5%.
We continue to expect for your marketing as a percentage of net sales could be 11.7.
<unk> percent or flat 2018.
Fresh DNA Q3 reported yesterday increased 220 basis points year over year.
Excluding the follows earn out adjustment as Tonight increased 110 basis points, primarily due to intangible amortization related to acquisitions R&D spending which is included industry and I was up 7% in the quarter as we continue to invest behind innovation.
Adjusted operating margin for the quarter was 21% or 130 basis points higher.
Other expense was 16.2 million and for income tax or effective rate for the quarter was 21.6% compared to 21.9 2018.
Slight decrease of 30 basis points, primarily driven by a higher number of stock options exercised.
And now to cash for the first nine months of 2019 net cash from operating activities was 617 million.
The 49.4 million increase from the prior year, that's higher cash earnings were partially offset by an increase in working capital.
Our cash earnings are up 13% year to date versus year ago through the first nine months of the year are a our factory and program is flat to prior year, we expect to see a increase in the program in Q4.
During Q3, we repurchased 150 million shares to get ahead of her 2020 share creep and what we what we considered an attractive share price.
For Q4, we expect adjusted EPS to be 54 cents as result of our investments in the higher tax rate.
And now for the full year.
We continue to expect organic sales growth to be approximately 4%. We now expect reported sales growth of approximately 5% previously six partially due to the flawless integration starting November 1st first October onest as well as foreign currency good timing a system cutover until after peak seasonal orders and display building is fair.
<unk>.
We now expect for your gross margin to expand 100 basis points or 60 basis points, excluding the flawless acquisition accounting, which is an improvement.
As I said earlier, the full year impact of tariffs on gross margin is neutral we continue to expect full year adjusted operating margin to increase 50 basis points. We continue to expect 2019, adjusted EPS of to 47 per share or adjusted EPS growth of 9%.
As mentioned in the release and as Matt commented similar to prior years, we will be reinvested the Q3 be back into the business to continue our momentum.
We lifted the areas of investment in the release and as one of example, we're excited about how well Asia Pacific is doing number that business was less than $10 million. Just a few years ago and now is approaching 50 million you will continue to invest incrementally where it makes sense.
Lastly, I'd like to provide some additional details around the flawless accounting treatment. During the transition period May Onest October 31st we decided to wait until November onest purchase false inventory in order to minimize any business disruption risk during peak seasonal shipment.
During the transition period net marketing profit received from I do a village is accounted for as other revenue as a component of net sales. So for Q4 will have a month of October reflecting marketing profit in the month of November and December reflecting that sales.
And just a housekeeping note when we provide our 2020 organic outlook, we will pro forma 2019 results for flawless for the seven months of ownership to enable investors the ability to assess on a consistent basis, our like for like revenue growth and with that Matt and I would be happy to take any questions.
Certainly ladies and gentlemen, if you have a question at this time. Please press Star then one on your Touchtone telephone. If your question has been answered and you'd like to move yourself from the could you. Please press the pound key.
First question comes from the line up Olivia Tong from Bank of America. Your question. Please.
Great. Good morning. Thank you wanted to talk a little bit about the balance between volume and price mix as we start to lap. Some of these initial pricing gains because your prices clearly holding up nicely, but the volume seems to be suffering a little bit. So does that concern you and what does that look like going forward.
And any change in your view on the makeup of organic sales growth as we go forward, particularly in consumer domestic thanks, yeah. Okay. Good question, so we raise prices.
In the eight categories, let's say five in household three and personal care so litter.
Same fighters Carpentier riser baking soda and also.
Our water pick its Waterford would throw over in the on the personal care side, then dry shampoo condoms and origin.
So volumes have been better than expected for us a throughout the year. A logical question is okay. When is the the price mix going to turn positive for volume and more point of view generally have to wait a year for that to happen for most categories. Most of our categories are need based.
Andy generally volume growth will return about one year after a price increases and I'll just add a Olivia I think you heard it and my comments in 2020 and beyond we think Ruby largely volume volume driven now as an example, demetri business in Q2 was minus 0.9 per <unk> percent on volume and Q3 was minus one point.
Right and Percentto was sequentially worse now that's largely a cat litter.
Story and remember in Q2, and the call. We said, we expect our litter business to slow down a bit in second half we competition raise price earlier than we did so we got a little bit of a volume benefit in the second half since I want to stack basis. You know, we don't usually do this must act bases for sales.
Litter and Q1 was 16.
In Q2, it was closer to 12, so the first half average 13 and the stack basis for Q3 in Q4 is going to average actually 14. So.
The motor business is very strong, but does show up little bit in volume in Q3.
Got it thanks that's helpful.
And then.
Nielsen.
Scanner data has looked a little softer recently, particularly at a time is progressed, so laundry still doing well, but many of your other categories. Like you mentioned litter are starting to see some softening and I know you said you know.
The second half first half from pricing phenomena, but can you talk about the major variations that you're seeing relative to scanner.
Beyond that.
Yes, sure you know were our bridge from organic number to Nielsen Nielsen was around 1.7%. So that would be tracked channels. We were at 3.3 at the Delta of 1.62 thirds of that it's just untracked channels. I think you read the release or in Matts comments on sales were up 30% right. So that business 'cause it can use it really well.
And then maybe a third of that's lower coupons, you know as we pull back on trade and laundry.
Example were also pulling back on couponing.
So by and large it's really just a comp issue for litter and its pullback for everything like laundry.
Great. Thank you.
Thank you aren't next question comes from the line of Kevin Grundy from Jefferies. Your question. Please.
Hey, good morning, guys.
Yes.
Hey.
I want to pick up on on flawless so.
Matt I guess would have been the learning so far the commentary once it's going to come in a bit below expectations in the back half the year.
Due to some softer comps from a key customer and.
To some timing around innovation, but.
It sounds like you're still confident in the 15% sales growth for next year, but I guess the contacted.
This asset is a little bit different than can pass along with water FICC and it's less common as I can recall for an acquired business to MS plan at this early stage after an acquisition so.
The questions would beat you think you have a full visibility on the reasons. The business is underperforming at this point how is it performing outside of that key customer.
And then what gives you confidence that you can deliver 15% sales growth of the business looking out to next year.
Yes, I look the the second half one things out of our control one things in our control. So whats out of our control. If you have an important important retailer historically the largest account.
Having some operating difficulties and cutting orders smell. That's just those things happen what was in our control is do we go forward with a new product launch broadly and obviously, making that decision to defer to next year was an obvious it to our reported numbers as well as the perception of investors with respect to.
The acquisition, so we deferred that till February 2020.
Good news is that we've been getting a lot of distribution wins.
That we know our coming and then when we see the day TV is going to be up 10% next year, and we're calling and 15% growth. We think it's a it's it's on sound ground now keep in mind here too is that this is a brand. That's in transition you know fewer <unk> brand is largely driven by display.
Ladies and it's moving to being in in aisle brand. That's that's a big transition I remember that business wasn't set up to manage a business that was in our brand.
And the other thing we're doing we're building a brand we start with the product we're building a brand and the way you build a brand is with the marketing and with the new product innovation and the business has a really good pipeline of innovation. So those are reasons why we say hey, you know, we got a bit of a bump here Oh sidewise into second half, but we feel good.
About the future and I just want to good context to the bump right, we're bringing the full year reported number down from 6% to 5% only a third of that is so maybe 30 basis is because of this flawless.
Miss in Q3 has just started just integration transition time and as we move it out a month.
We didn't want to do all the inventory activity right. When they are trying to ship out. So we moved that amount that was worth a third of it and then a third of is FX. So it's a.
Thats, a third of the 1% to give you context.
Thanks, Thanks, Rick.
Just one follow up on this and then I'll pass it on a bunch of questions, but ill pass it on.
As the product does move from display in aisle.
And then given sort of the newness.
Of the brand to the company what sort of visibility do you have on velocity as you do that so what gives you. The confidence then as you make a ship which would be an important one given where this business is and how young it isn't how young the brand is.
Yes, well is that we can tell from the previous launches and the excitement on the part of the consumer for the brand and the retailers recognize it as well.
This brand does get younger consumers into the stores, which is definitely what what many retailers are looking for so.
We're not we're not worried about the velocity, we think the once we get a really good placement.
Distribution in I'll, it's going to help the brand is going to be big positive.
Okay I'll leave it there I'll pass you know thank you guys. Okay.
Thank you. Our next question comes on the line of Jason English from Goldman Sachs. Your question. Please.
Good morning, everyone. This is actually CODI on for Jason.
Just wanted to dig into your gross margin guidance a little bit.
You guided gross margins stay increased 100, perhaps or 60 bips, excluding flawless I believe your previous guide of 80 Bips expansion included flawless, suggesting you're increasing your gross margin expansion by about 20 basis points.
Quarter.
Can you just provide the puts and takes the higher GM outlook. Thank you.
Yes, sure no problem Cody.
You're right like gluten when we provided the 40 to 80 basis points for the full year last quarter about half of that was the base business half that was close to 40 and 40.
Flawless numbers on changes still 40, and 60 as the base business. That's EUR 100 for the full year now.
If you just start with a 40.
Basis point.
Look and then we add back.
The benefit of tariffs that's.
25 basis points I could see the 65.
And then you subtract out.
Tier four tariffs right we've got hit by.
A little bit tier four stuff like spend Russian and water, a shower heads and and flawless. That's about 10 Bips and then some of the investments that Matt alluded to that we're going to spend back. That's another 10 basis points to that gets you to 45, and then we're actually having a little bit better productivity by and large so that's how you get to plus 15.
It's largely productivity driven and as the reason, we're we're doing better on the base business.
Great. That's helpful. Thank you very much and then just in regards to their retroactive tariff exemption can you just specifically spell out for us what that is in relation to and is this a onetime benefit are there any residual impacts ended the fourth quarter into next year. Thank you.
Yeah, no problem, it's largely related to our water pick waterfall us or business.
Got caught up in tier two it was about $11 million in the quarter, we've put together, one or $2 million in the fourth quarter as some of that went to inventory and get flushed through.
On a margin basis, it's neutral because we had a drag of 25 basis points and our outlook and then this comes back around so now it's neutral on gross margin.
So the dollars.
So in two inches and 2020, then it'll be neutral on margin, but the dollars will still be there like just like they are right now in 2019.
Thank you very much.
Thank you. Our next question comes in the line.
Refresh apart from Oppenheimer. Your question please.
Good morning, and thanks for taking my question.
So I also had a question just on flawlessly. So you do you look out the earn out that you expect to pay out in December 2021, given given a shortfall. They expect this year do you still believe you're on track to be able to I guess <unk> got to towards the high end of that payout on the earn out.
Yeah, Yeah, we do we do Rupesh.
As a lot of opportunity internationally that and combined combined with the success, we're having a new distribution wins, we think we're still on track and it really comes down to what Matt said in his earlier comments, we still believe that business is going to grow plus 15% for the foreseeable future.
Okay. So essentially this year you ever had only then you expect to make it up over the next two years, yes, yeah. Yeah. We're all the only owned the business since since May mean, it's there it's early days, but a lot of good things are happening.
Okay, Great and then on on the tower front I'm just curious on your thoughts regarding cure for whether whether there's anything they built in for this year and how you're thinking about going for it.
Yes, I mean I just wanted to Coty that we got hit we will be getting hit with tier four just like anybody else.
And it's really three product lines for us Spinbrush flawless and water pick shower heads and there's a few million bucks of a headwind in Q4 remember some of the tariffs or September for some of them start December 15th.
And we'll do what would it was one of pick right. We go back to our suppliers and negotiate on.
Sharing some of the tariff burden and we also look at pricing and so well take in February on what the net impact of any of that noise would be.
Okay, great. Thank you.
Thank you. Our next question comes from the line Nik Modi from RBC capital markets. Your question. Please.
Yes, thanks, good morning, everyone.
Matt maybe you can just talk a little bit about you know the input cost environment, There's obviously been been favorable and.
Do you expect to the next couple of months and even heading into 2020 that we'll see just more promotional competitive spend particularly as we tell us what the push all their private label agendas any thoughts around that would be would be helpful.
Well, if you're saying there people are going to be spending things back the a the trend would suggest a no so far.
If you look at what's going on in laundry for example over the the this this year in the most recent quarter. The laundry category sold on deal was down 180 basis points and liquid laundry sold on deal was down 300 basis points and a you know I think if you look at categories, where there were price increases I don't think its lodge.
Well for people to say well that was fun, we get we had the price increase for you're never going to start dealing it all back in my view for all these are all public companies trying increased earnings year over year. So I don't think that would.
Be logical to think that those things would be a adult back and I would just add on the on the commodity side Nick.
You will see enter Q, but commodities and transportation for US, we're still 110 basis point drag in the quarter and if you parse out just commodities they were still a headwind for us around 70 basis points now part of that is because we have some hedges in place. So those hedges in place roll off that won't be a headwind, but we do have mid single digit increases for like litter.
Litter raw materials as an example, or high single digit for sugar. So theres still inflation. There is not freefall deflation out there I think it's improving no doubt some of our major commodities are actually down like ethylene and and and AHGP, but not all of the mark.
Great Super helpful. Thank you.
Thank you. Our next question comes on line of Steve Powers from Deutsche Bank. Your question. Please.
Hey, Thanks, guys. So.
Operating conditions it looks to me at least seem more or less stable quarter to quarter Threeq versus Twoq, you and you're not really calling out anything going forward you know even related to the scanner data that believe you referenced or promotional environment.
In relation to next question. So if that's the case I guess why the implied deceleration in Fourq user anything notable call out.
Yeah, nothing different than we called out last time, Steve is largely because we're pulling back from promotional spending and.
The kind of same commentary.
We gave last call as we pull back on laundry in Minnesota on deal and on Couponing as we lap.
Well I gave earlier in the call as we lap a high volume number for litter, which is still really strong stack basis, all those things contribute to a.
Just a deceleration of the over there.
Okay. Okay, and then just kind of Oh accounting clarification. So when you when you lap the unique accounting treatment of flawless.
Next year with fully consolidated revenue in that basis in the piano 2020 versus 29 team.
Can you just talk about how are you going to treat that will you called out to call out. The Delta you know has a unique M&A impact or were you treat that as accretive to organic growth as some kind of price mix just margins on that so.
Right I tried to put that in my upfront upfront comments, but we will definitely just will pro forma what so for example in Q3 this year within.
The PML $20 million was there for flawless.
Net sales in that represent the marketing profit.
But the real net sales were they were around $60 million. So in Q3 next year, we'll do all of organic growth off of $60 million.
Okay. That's perfect. Thanks, a lot.
Thank you. Our next question comes on line, that's committed group and while it from credit Suisse. Your question. Please.
Hey, good morning, everybody.
First maybe a quick one on I'm flows in the retail issue was that a temporary almost an inventory timing sort of thing or is this something more structural such as store closings and something like that.
Well, it's it's like I said, it's it their most important retailer and a they did to curtail orders, we do see that in the fourth quarter that seems to be coming back a little bit.
But we don't expect to be is dependent upon that one retailer going forward considering the number of distribution wins that we have coming in February .
Okay got it and are you able to provide some context on maybe the current channel mix in the channel mix you're looking to.
Looking to achieve as you on the business for for longer.
Well the flawless.
Yeah, well flawless, there's a big opportunity in food very low TV in food.
So we expect to increase that dramatically. So when I say, we have 55% HCV theres still a lot of runway had I would say that's the class of trade that we had the biggest opportunity yet in the second one not really class of trade, but only 17% of their sales is currently international and that business is going to grow as we plugged that into our international footprint.
Okay got it thank you.
Thank you. Our next question comes from the line of Lauren Lieberman from Barclays. Your question. Please.
Hi, Thanks, good morning.
I have you guys could talk a little it out for Q marketing spend and fully understanding it's about.
Tying to a full year number, but it's an enormous amount to spend in one quarter. So just love any color on the balance between Q3 Q4 kind of what shifted in why in terms of timing because I can't find a quarter. We've spent the level implied in Fourq. You previously so just it's interesting to see where that's going thanks.
Yeah, Yeah. Okay. Good question, if you look at.
Q2 in Q3, and you look at marketing as percentage of sales.
Q2 was 12% Q3 11 half percent so soda.
In the sweet spot of trying to hit 11.74 your base So Q1.
Was lower.
We did shift a few million dollars out of Q3.
Into Q4.
There are some things happening in Q4, such as oxy clean.
Protect us a new product launch that is a second half launch. So we got some money behind that we also have a couple of 2020 launches.
That are being pulled forward one for a piece we have a drove Trojan GE spot condoms shipping early so we're moving up some support so full year basis, we'll hit 11.7, we have had quarters in the past that had been in excess of 13%. If you went back to last year 2018.
It was a second quarter was 13%. So it has happened in the past and you're right. Lauren it's up it's going to be up in that 20 $530 million year over year. Some of that is some of the acquisitions right. Waterpark has since been in Q4 flawless has since been in Q4, it will be the normal kind of personnel marketing spend for November December so some of that is.
Just like not set some of the shifts because of the resets but also.
Higher numbers for the acquisition.
Okay, great. Thank you.
Thank you. Our next question comes the line of Joel until down from Raymond James Your question. Please.
Hi, guys, it's actually Adam on for Joe I know you guys touched on a bunch of my questions, but I was just curious little more specifically.
Being underpenetrated in China today, I guess, how quickly you think maybe you can get perhaps a mid single digits as a percent of sales.
Well.
Broad question.
International we just a year ago.
You are in Africa, we started up with a Shanghai Jowell, we're baking soda toothpaste dry shampoo in Fem Hy there, we're having a lot of success with waterflood reserves and vitamins. The business has been growing 25% annually. It's a it's likely going to be the fastest growing.
Part of the of search and why going forward, but I wouldn't speculate this yet as you know how fast we are going to get to your with your target.
Okay. That's helpful color. Thanks.
Thank you. Our next question comes the line of Jonathan Feeney from consumer at your question. Please.
Good morning. Thanks coached couple detail questions first Rick you commented on club and on who I'm, sorry on Couponing and online can you comment on that bridge between track channels and and.
Your report it can you comment is clubs still positive relative to that any comments you give around that first of all secondly is there anything structural going on and couponing.
Pulling back a little bit on the promo overall.
Leaning a little more price versus volume, but our coupons getting less effective or is there any.
Insight you have as far as maybe there's a little bit.
Different approaches are structurally so we'll see less of that in the future and third.
Just to me not the most important thing in the world, but just curious little detail like.
With this carefully how does that actually work mechanically so the government collects the terror from you because it's something you bought.
It was any of that relief that you recognized this quarter ever relate to products that were sold than where you your cost of them in a prior quarter I know that super technical but I've dealt with these situations before actually a long time ago, and I always want to make sure I understand thanks, so much.
Yes, Okay, well those are three three questions first one on club clubs growing it's doing well the bulk of the growth, though difference between track and untracked channels online and that's really matts comments about 30% growth.
Amazon is doing great who is doing great. So.
No.
Clubs.
Positive tailwind, but it's not a huge driver never to coupon coupons.
It's just part of the price mix equation and price value equation and Weve.
As people back Im wondering what promotion or other promotion.
Matt alluded to.
Almost 600 basis points of pull back on amount sold on deal for laundry coupon and follows that trend to know coupons are really.
Men for new product introductions, and I think you'll see that overtime.
And less on on fixing price value differences and the third one was on technically on the on the Tara.
You're right when you get a tariff rebate it doesn't really follow the upper say follows when that they give you a credit back for all the imported products that you have it's up to us to figure out what goes the pinedale what goes into him and great but for US we did get some tariff release all the way.
Back to when we started importing the product with new tariff, which we've been like July August of last year. So.
It's about 12 months of relief we got.
And just happen that this year, we had forecasted 12 months worth of a hurt so thats why there's no impact to the full year gross margin.
Super helpful and thank you.
Yeah.
Thank you our next question.
Comes from our final question comes the line of Steve Stricker from Yes. Your question. Please.
Hi, good morning.
First of a question on laundry and then a quick follow up question on flawless.
For the laundry piece can you help us think through the different market shares trends in the quarter that you saw from but liquid laundry, we're seeing quite strong and then share gains were a little bit more muted for the pod business anything to read in or think of the happened this quarter, how do we think about that Ford.
Yeah. That's a that's a good question if you look at the.
Shares for the quarter I mentioned that Harman Hammer was up 40, Bips and X was up 10, bips going the other way for US was oxy claims Oxiclean was down 40, Bips, which is now a.
0.7% share.
The two two big brands, we have Harman hammer an extra.
Certainly very healthy if you look at the suppliers and you look it's all the brands for the three suppliers PNG.
Church and Dwight.
Ankle you just I just gave you the math for church, and Dwight being up 10 Bips.
PNG It was up a full share point point than an ankle was down.
<unk> hundred 40, Bips and share and that was across Sun.
Oil and and Purex. So that gives you a prospective on what's going on first unit those goes.
Unit dose it for US Purex has re entered after three year absence in the pods category.
And they entered with very low price point and they have gained a 130 basis points of share.
At the same time simply tide pods or were heavily promoted the score actually grew up 1000 basis points far as percent sold on deal year over year, which is kind of massive and at the same time, we had pulled back 900 basis points.
Over year for a percent sold on deal so.
Combination of all that we are Harman hammer buys actually lost 30 bips of share in the quarters. So we were only grew a little over 1% one 1.5%.
So you know for our part will be focused on having the right value proposition for the consumer which is a combination of quality and the right price, but I'll give you a sense for what's going on dynamic was.
That's really helpful and as a follow up to Calamos question on the key retailers.
Might be a little dense this morning, I just didn't get what happened there did.
Trial, the product and it just didnt really resonate for that customer base, specifically or do you have to do with like cleaner I'll impact.
Can you help us understand a little bit better.
That's purely a decision on the part of the retailers had nothing to do it velocity.
Okay, and what did what are the tradeoff says, we think about transitioning to on shelf versus and I will display you know is it higher and slotting fees.
Where would you be receiving product placement next to how.
What are the cost implications.
Yeah, I know you'll have to stay tuned on the on a product placement, we're pretty excited about where we're going to be placed in some major retailers in February .
As far as the thing that dynamics goes a you know replenishment is different for in I'll. Then if you have displays and that's our our sweet spot we're not at the slip this display driven.
Business, obviously used displays from time to time as promotions, but that's not central to our go to market strategy. So in iOS, where we're going to <unk> going to be able to help the flows business.
Alright, thank you.
Thank you all right. This does.
All right. So we're going to wrap it up right now, we'll see everybody a down at the exchange in February I mean final note, we had had a super quarter, good fourth quarter and we're looking forward to 2020. So we'll talk to you later.
Okay.
Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.