Q2 2022 Prestige Consumer Healthcare Inc Earnings Call

Thank you for saying Goodbye and walk into the queue to 20 twenty-two prestige consumer Health care, Inc, or any conference call. At this time, all participants I was spelling that.

Happy to speak his presentation there'll be a question and answer session.

That was the question at that time, Please press star I didn't want when you touch tone telephone.

<unk> today's conference call is being recorded.

I would have to turn the concept he always used to build triple Lily Vice President that's a relationship and treasury.

Please go ahead Sir.

Thanks, operator, and thank you to everyone who.

A call with me around Lombardi, our chairman, President and CEO, and Christine cycle, where CFO.

On today's call review the second quarter of fiscal 22 results provided updated full your outlook and then take questions from analysts.

There's a slide presentation, which accompanies today's call can be accessed by visiting prestige consumer healthcare dot com clicking on the investors link and then on today's webcast and presentation.

Please remember some of the information contained in the presentation today includes non-GAAP financial measures.

Reconciliation to the nearest GAAP financial measures are included in today's earnings release and slide presentation.

During today's call management will make forward looking statements around risks and uncertainties are detailed in the complete safe Harbor on page two of the slide presentation accompanying the call.

These are important to review and contemplate does everyone on the call today, as well where business environment uncertainty remains heightened due to COVID-19 and continues to have numerous potential impacts.

This means the results could change at any time in the forecast impact of risks as the best estimate based on the information available as of today's date.

Additional information concerning risk factors cautionary statements are available on our most recent SEC filings and most recent company 10-K.

Ah now handed over to our CEO around the body from.

Thanks, So let's begin on slide five.

We are very pleased with our queue to results, which were a continuation of the impressive first quarter performance we discussed in August.

We delivered record revenues of $276 million in the quarter.

Up 16% versus the prior year.

Driven by several factors.

Our base business performed well across the majority of our portfolio aided by strong consumer behaviors.

Are time tested brand building.

Organic topline performance and consumption trends of about 11%.

Reflects the strength.

The rapid growth occurred across nearly all channels and was also driven by continued market share wins and many of our categories year to date.

I will discuss both of these factors in a bit more detail shortly.

Lastly, the July 1st acquisition of Acorns consumer brands generated $12 $4 million in revenue and is off to a solid start.

We are fully integrated the business into our processes and remain confident in thera tears long term growth outlook and fit alongside clear eyes.

His topline performance translated into superior earnings and free cash flow.

We generated a dollar tool adjusted EPS and.

And adjusted free cash flow of $62 million, both up double digits versus the prior year.

Are strong free cash flow and our solid Q2 and year to date performance continues to enable our disciplines capital allocation strategy.

Even with the acquisition of Acorn back on July 1st we finished the quarter at 4.1 times net leverage and anticipate being below four times at fiscal year, and further enabling future capital allocation optionality.

Let's turn to page six for an update around the evolving consumer habits and other macro changes, resulting from the pandemic.

Since last year, we have witnessed a rapidly evolving consumer environment as consumer habits and other various effects of the COVID-19 pandemic continue to impact all businesses.

Fortunately for our business many of our attributes having numerous leading brands are diverse supply chain and being an agile organization enables us to succeed in this dynamic environment.

And Q2, we experienced some continued trends from Q1 and began to experience a few new trends. These fall under three major themes and we are well positioned to manage each of them successfully.

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Consumer habits around certain categories previously impacted by COVID-19 continued to normalize.

We experienced a continuation of the sharp rebound and travel trends that began in Q1 and benefited our dramamine business.

In queue to the rebound extended into additional categories, as well, including higher cost cold illnesses as well as a modest uptick in headlights are leading brands in each of these categories, which include Dramamine Chloraseptic Lootens Hydrolyte and mix are benefiting from this rebound with.

Consumption up double digits.

Second.

Consumer demand trends further fueled our queue to performance, both consumers and retailers have shifted their purchasing an order rates broadly in anticipation of supply concerns being noted in the media with our leading market position, we're top of mind for our consumers as they shop and therefore.

<unk> to benefit from this near term bills.

For example increased vaccine foot traffic drove strong consumption trends in the drug channel.

Where we have a broad distribution in market share is also generated higher ordering in this channel to support the increase takeaway itself.

And broad concerns of potential supply risks as retailers do not want to be without leading brands such as ours.

Third.

Similar to others, we are watching and evaluating certain supply chain constraints and elevated costs occurring in the global marketplace. Chris will review the gross margin impact later, but it's important to note. We are well positioned to navigate any impacts are asset light manufacturing strategy and leading Brad.

And portfolio give us the ability to react quickly to challenges in the market place to both ongoing cost savings efforts and price actions as necessary.

Now, let's turn to slide seven for a midyear update on our brand building strategy.

For our fiscal year to date market share for our brand portfolio has outpaced category as well.

On the left side of the page or three categories, where we've had particularly strong performance in the first six months of fiscal 2002.

And Gi are strong performance is supported by the travel rebound I just discussed.

But we also continued experienced solid long term growth for both Gaviscon in Canada and fleet.

And scan we continue to experience longterm market share growth and compound W. As consumers seek leading brand for work treatment.

Success is driven by utilizing the full spectrum of brand building efforts show on the right side of the page that continued to deliver a superior consumer experience.

Ended eyecare clear eyes continues to expand its market, leading position and redness relief clear ice remains a leader in the category with year to date success helped by brand marketing innovation and a recovery and the convenience channel four hour clear eyes pocket that product.

We look forward to executing many of the same strategies with a ferret tears brand in coming quarters.

We are proud of our share performance here to date with the vast majority of our largest brands and categories growing market share.

This result is a testament to our portfolio positioning and long term strategy.

Now, let's turn to slide eight for an update on e-commerce.

When we began our prior fiscal year, we saw rapid acceleration in R e-commerce business, which effectively doubled overnight to over 10% of sales impressively our sales continue to grow double digits in this channel despite the year ago comparison.

This is driven by our early and continued investments in E. Commerce that today enables our success as a leader in consumer healthcare e-commerce across all of our online retail partners.

We continue to win with consumers across e-commerce through our investments and online content and digital advertising, we used engaging targeted and timely messaging with the end goal of expanding our share with consumers.

Shown on the right of the page are a few examples for compound W. It's treatment finder and engaging web web content help consumers find the right skin products solution for them.

Meanwhile, online campaigns behind other brands, such as Dentex hope deepened connections with consumers for the dead Tech oral care enthusiasts are online campaigns are a reminder, around the broad assortment of offerings used as a part of their daily.

Care routine these.

These are two examples of the many efforts we continue to engage in in that position us for further e-commerce growth.

Now I will turn it over to Chris to walk through the financial.

Thanks, Ron Good morning, everyone, Let's turn to slide 10, and review our second quarter physical 22 financial results is.

As a reminder, the information in today's presentation includes certain non-GAAP information that is reconciled to the closest gap measure and our earnings release.

Q2 revenue of $276.2 million increased 16.3% and 10, 5% on an organic basis versus the prior year. The latter excluding the acquisition of Acorn, which added $12.4 million in the quarter as well as the effective foreign currency.

As Ron highlighted earlier cue to continue to benefit from favourable consumer trends in many of our categories previously impacted by COVID-19.

By segment North America revenues were up approximately 16% near.

Nearly all product categories grew with the largest organic increases in Gi cough, and cold and dermatological categories.

As Ron discussed earlier, a return towards more normalized travel trends helped drive a significant lift for certain brands versus a year ago led by Dramamine, and Gi and clear eyes and high an ear care.

International OTC increased approximately 15% in queue to after excluding the effects of foreign currency.

The increase was attributable to a more favourable comparison in the prior year as well as an increase in hydrolyte sales for more normalized consumer trends around illness and activities in Australia.

Adjusted EBITDA increase in queue to approximately 15%, while EBIT margin remained consistent with our long term expectations in the mid thirties.

Adjusted EPS for the quarter was one dollar and two cents per share up over 31% versus the prior year, driven primarily by higher sales and lower interest expense.

Let's turn to slide 11 for more detail around consolidated results for the first half.

Revenues for the first six months of physical twenty-two increased 17% versus the prior year.

On an organic basis revenues grew 13% after excluding a $12.4 million contribution from the acquisition of Acorn as well as the effects of foreign currency.

Similar Q1. This performance was driven by the favorable year ago comparison, longterm brand building efforts and improved trends in certain COVID-19 impacted categories, such as travel cough and cold and headlights.

We continue to experience year over year double digit consumption growth in the E. Commerce channel further building upon the sharply higher online purchasing shift that occurred throughout fiscal 21.

Total company adjusted gross margin of 58, 4% in the first half was approximate to last year's gross margin of 58, 2%.

This consistent performance was reflective of the higher than expected sales performance as well as favorable product mix, partially offset by rising supply chain costs.

As a reminder are diversified supply chain and leading product portfolio or an advantage. When it comes to managing inflationary pressures, we are constantly executing cost saving efforts across our business as well as evaluating pricing actions to offset inflationary pressures.

As discussed back in August we have already taken a number of tactical price increases uncertain of our leading brands.

As a result, even with the current environment that is causing higher costs. We know anticipate a gross margin of approximately 57% for fiscal 2002.

This assumes of 56% gross margin in the second half.

Which reflects the supply challenges and cost pressures, we and others are experiencing.

We anticipate further price increases moving forward as necessary to continue to offset these inflationary headwinds.

Moving down the P&L advertising and marketing came in at 14.7% for the first path up slightly versus the prior year due largely to the abnormally low rate of spending Q1 of last year due to COVID-19 shelter in place restrictions.

For fiscal twenty-two we still anticipate an approximate 15% A&M rate as a percentage of sales and for Q3, we anticipate A&M of approximately 15%.

Adjusted G&A expenses were just over 9% of sales in the first half looking.

Looking ahead G&A dollars should declined sequentially in Q3, owing to the timing of certain expenses.

For the full year physical twenty-two, we we anticipate G&A of around 95%.

Adjusted EPS for the first half of $2.16 per share grew 31.7% over the prior year.

Higher sales and lower interest expense drove this growth.

We still anticipate interest to approximate $63 million for the full year.

Now, let's turn to slide 12.

For the first half, we generated $129 $7 million in free cash flow up about 12% versus the prior year due to the strong operating performance just discussed as well as lower capex.

We continue to maintain industry, leading free cash flow conversion based around our asset late model.

At September 30th our net debt was approximately $1.6 billion and we finished.

The quarter with a covenant defined leverage ratio of $4 one time.

We know anticipate leverage of below four times, a year and fiscal 22.

We continue to operate with a disciplined capital allocation strategy focused around debt reduction in the near term with that I'll turn it back to run.

Thanks, Chris, Let's turn to slide 14 to wrap up and discuss our increased outlook for fiscal 2002.

We are very pleased with our first half of fiscal 22 performance, which is underpinned by our strong portfolio and business strategy.

We anticipate a continued dynamic environment in the second half, but are confident that are proven business strategy will allow us to navigate the dynamic market. As a result, we are raising our outlook for fiscal 2002.

For the full year, we know anticipate revenues of $1 billion 52, a $1 billion 60, which includes an organic revenue growth expectation of about 7%.

Acquisition of Acorn is still expected to contribute approximately $40 million to net sales.

For the third quarter, we anticipate revenues of $260 million or more.

The guidance reflects our current thinking around modest recoveries in the peak season for cough cold and headlights areas of our business as well as the strong consumer environment. These positive effects are partially offset by the strong consumer stock up trends experienced in queue to we discussed earlier.

We are also raising our full year earnings outlook, we anticipate adjusted EP EPS of $3.93.

To $3.98 for fiscal 2002 for Q3, adjusted Eps's expect it to be 88 cents.

Strong cash generation and financial leverage to continue to enable double digit earnings growth for the second half.

A strong earnings outlook includes an increase in costs and supply tightness as discussed earlier that is impacting gross margins surrounding the supply chain by approximately 200 basis points in the back half of fiscal 2002 compared to the first half.

Are strong overall financial profile ongoing cost savings and price actions that Chris noted earlier are helping to offset these effects.

And expect to be well positioned for the following fiscal year.

Our business attribute is also translate into strong free cash flow and we still anticipate adjusted free cash flow of 245 million or more and are well on our way following the $130 million of adjusted free cash flow generated year to date.

In closing we remain confident that are proven business attribute will continue to deliver superior results. We've.

We look forward to executing long term brand building that rewards are stakeholders in coming quarters and beyond.

With that I'll open it up for questions operator.

Thank you again, ladies and gentlemen, if you'd like to ask a question. Please press.

And then one on your touchdown powerful again to ask a question. Please bright star then one.

One moment for our first question.

Our first question comes from John Anderson, a way of Blair Your ladders okay.

Good morning, everybody.

Good morning, John.

I wanted to start with the.

Guidance I guess.

The organic growth in the first half of the fiscal year, it's been quite strong 13% does he pointed out.

It looks like the midpoint of your <unk>.

Revenue guidance for the full year, no implies pretty significant deep cell in the second half of the year.

<unk> organic growth kind of flattish all most of the second half is what's implied.

Should you talk a little bit about.

Why that's the right way to think about the second half of the year given the apparent momentum.

In the business. Thanks.

So let me start John and then I'll have Chris add some additional comments.

The first thing I would like to remind everybody when we start talking about comps and business trends is that we're in the middle of a three year period of unique trends and tough comp periods right. We all know what happened last year and the Covid disruption lines up very well with our fiscal year right begin.

In April one right. It was disrupted last year, our first quarter of sales were below $230 million you get to this year, we're seeing concentrated recoveries in certain in certain quarters right. The first quarter ended June.

And then the most recent quarter, which is pumping against.

Impacted periods last year, and then of course, we will I'll see what I am full of next year as things continue to come out of the the Covid impact. So first thing I'll remind you is that the comps are not all equal here.

As the big driver so Chris maybe some specific rain in the number yes. Good morning, John So just a couple of other things right. Just a reminder, we do have some seasonality around demand for some of our products like Ah Dramamine a compound W. For example, we talked on the on the prepared remarks about consumer and retailer demand for products being heightened in the second quarter, we think about five.

Benefits.

Q.

Ooh that would have been timing related out of Q3, so when we think about our expectations for the back half Jenny.

Generally you can continued rebound in certain COVID-19 cat over categories travel will be less of an impact because of seasonality that I mentioned.

Regarding cough and cold incidences call for a second wave of retailer purchases there could be some upside to our expectations.

So the second half we left largely intact from our prior guide, which called for more normalized trends on the base business with the exception of that $5 million a timing I guess I would also just add as a reminder, that our physical Q3 is the most difficult quarter to call given the holiday season. This year in particular may prove to be less predictable than years past.

Which is why we thought it was prudent to maintain the second half assumptions at this time, so fundamentally John we still feel very good about our business and portfolio and the underlying consumption trends that we have.

That's helpful. Thank you.

On that consumption point.

How how are your ship how does your shipments compare in the quarter compared to.

Consumption for the business in aggregate I'm not sure that may have been a a presentation I didn't see it.

Let's talk a little bit about your consumption.

Measures and whether there were any dislocations between shipments of consumption avoid that quite a bit.

Yes, I believe in my prepared remarks today, I commented that consumption and organic sales.

Trends were pretty much the same at about 10% or so and.

And we saw the same thing more or less in the first quarter as well.

Okay, Great and then are you.

Are you seeing anything you've talked about dynamic the market is.

Understandably.

Where are you in terms of your retail partners.

With respect to maintaining the appropriate trade inventory levels in the stocks are you.

Experiencing any.

Disruptions that might resolve themselves during during coming quarters.

Yeah, just kind of the whole relationship and some of the puts and takes between.

Your business and the retailers kind of plans.

Which are obviously impacted your shipments at various various quarters over the past few years.

Yeah, So first of all of <unk>.

Answer the question about our inventory at retail in general we continue to be in pretty good shape.

Cross the portfolio at the retail shelf I.

I guess the the.

Next comment is.

We're seeing many of the same supply chain stresses that many other companies are talking about.

But the backdrop for US is the quarter ended June and then our most recent quarter ended September we've been able to deliver.

Record levels of sales right 270, some odd million dollars in the quarter ended June and 275 million plus this quarter. So although we would like to have more inventory in our warehouse and I think the retailers, we'd like to have more inventory of our products in their warehouses.

We are generally keep keeping up with the takeaway itself in our I'm pretty good pretty good shape.

We'll see how that goes one of our business App attributes is diverse supply bass that as nimble as we are so we will continue to focus on it but.

Hard to predict how things will unfold here over the next the next couple of quarters.

And then the last one for me.

The online business.

Continues to perform very well.

Where where are you.

Today in terms of the percentage of sales that youre doing it online and.

Do you continue to expect that to just remain a.

Kind of a source of strength within the context of the various channels, but which you go to market.

And are there any implications we need to be thinking about in terms of.

Profitability or your brand positions online versus offline. Thank you.

Yeah. So.

As we said during the prepared remarks the online.

Commerce part of our business continues to grow nicely and we continue to focus on it.

And not only the big player Amazon here, but we're working with and investing with all of our.

Retail partners, who have an online businesses, we want them all to be successful at the end of the day, we want to be available.

The consumer chooses to buy our product and it's how we think about it. So we believe we're going to we're in a position to continue to grow well, there and six quarters into this <unk>.

Financial profile in terms of of margins for those online sales has continued to hold up we continue to win and grow market size and market share as a result of consumers moving to online so.

It continues to be a bright spot for us that we will well positioned to take advantage of and we're going to continue to focus on it.

Great. Thanks, Thanks, a lot thank.

Thank you John.

Thank you.

Question <unk> what piece are keys.

How many lines okay.

Good morning, Thanks for taking my question, So I guess Christmas going back to your commentary on gross margins in the backup to be or do you guys. Do you expect some pressures there, but just given presumably pricing options that you guys are taking and other actions would you expect to get back up to that 58% level next year.

Hey, Reattach morning, so is.

As a reminder, at the start with the benefit we have of having a diverse portfolio. It also helps us diversify our cost components right as well the benefit of having mostly number one brand so.

Had previously contemplated some inflationary pressures in our guidance in our current physical 22 guidance approximately 57%. It's gone for about 150 basis points of incremental pressure in the back half.

So as I mentioned in my prepared remarks, we plan to mitigate these through the pressures through combination of cost savings in pricing action, we've already executed some tactical pricing actions this year.

As this environment continues to unfold, we are contemplating further action.

I think it's important to put these inflationary pressures.

In perspective, given what you are probably will be hearing from other than the space.

And are updated guidance is calling for about $10 million to $15 million a pressure here, we've already taken pricing actions that approximately $10 million on an annual basis.

So.

Of course, there's always a lag and timing of between costs and savings and pricing and when it run through your P&L, but at this point, we have no reason not to expect our margin profile for the business to recover to more historic levels over time.

Okay, Great. That's that's really helpful color and then write I guess going back to your earlier commentary just on retailers and consumers potentially stocking up so you quantify the retailer side of it is there any way to quantify.

How much consumers are talking up or the impact or the benefit you saw during the quarter.

Yeah I mean.

That's hard to to estimate how much product was bought and is sitting in the shelf waiting for for future use.

Most of our portfolio Kennedy doesn't fit that that case.

We have a small portion of the cough cold seven 8% of our total.

Revenues that might fit that so.

We're keeping an eye on it it's really hard to predict the changing consumer habits here.

But for the quarter of the $15 million of sales increase.

Above our our outlook for the quarter, we think about maybe half of it.

Was timing that came out of.

The second half into the into the second quarter.

Okay. That's that's helpful color and then maybe one final question on Terror tears.

Commentary seems positive so far in the integration and where you guys are sitting there, but just any any surprises thus far with the business.

So far no no surprises other than it continues to be as great an opportunity as we thought it was when we wrote the check and clothes that day. So.

Diligent here is pretty well defined and.

We do a good job at it so.

We tend to dig in and find out find out a lot about the business during diligence. So we'll continue to feel very optimistic about the long term growth opportunities for.

For the brand.

Okay, great. Thank you I'll pass it along.

Your best.

Thank you, ladies and gentlemen, if you'd like to ask a question. Please press star I didn't whine and your Tech Stone telephone. Our next question comes with staff listening of separation ourselves.

Thank you good morning, everyone. Thanks for taking our questions.

This one is for you with some of the drive channel I noticed in your prepared comments that you talked about an inflection I think he said in traffic, but wanted to just give you a chance to talk a little bit more about that channel, which in the past has been a point of pressure it seemed like it actually could be acquaintance support.

You could just share a little bit about what you're observing in that channel that'd be helpful. Thank you.

Sure So I.

I think the easy observation is that foot traffic is way up in the drug channel is.

People have gone in for their Covid shots.

That's what the retailers are are announcing I think one of the big players announced strong performance just just this week.

The more people that show up in a store the more chance you get to have them take your product off the shelf and buy it so.

That's the kind of trend that we're seeing we're seeing our sales up meaningfully in that channel as a result of that increase in foot traffic.

Time will tell.

How that plays out but.

I'll go back to my earlier comment, which is we're focused on making sure that our product is broadly available so that wherever the consumer chooses to buy it it's there waiting for them and we're.

We're riding that wave and the drug channel right now.

And then I had to follow ups, Chris maybe once again.

The other it's a follow up to your passions other questions I'll start with that one which is unheard tears and it looks like the business is run rating better than that $40 million for the year I'm. Just wondering if there's any seasonality we should be mindful of for the Acorn business and then Chris are you on the balance sheet inventory I think Ron mentioned that you'd like to have a little bit more but you've had a couple of quarters of down inventory and.

Still delivering really strong sales is there a step function that you've experienced in the working capital philosophy of your business that you think you can hold on to into the future do you think that this is just a temporary period that you'll invest more in balance sheet inventory to support the longer term growth of the business.

Actually I'll, let Chris take both of those okay.

Hi, Steph so.

Seasonality perspective, not really around that there appeared business you know, if we compared to our clear eyes business.

Certainly right now, we're seeing a little bit of benefit as folks are getting back out just like we're seeing with clear eyes, but.

Always difficult to call that first quarter. After you close an acquisition so.

At 12, four just slightly above what we had called US I think it was around 10 for the for the period, but.

Concerning inventory.

Remember please that in this opening I should say in September 30th balance sheet I've got my New my new Acorn inventory in there. So my base business is a little bit lower than it looks like.

By about $5 million in this environment.

We're really looking at just make sure we can support our customers and so that's the priority and the focus for now as opposed to working capital management and we'd like that number to be higher as as we continue through this uncertain time.

Historically, our number one focus is on service levels to our retail customers and our service levels really aren't quite where we would like them to be.

So we haven't found that we can support our business at lower levels of inventory and our financial profile allows us to invest in inventory to have best in class service levels.

And that's the way we think about it so we'd like to see more inventory. So that we can see our service levels and jump over time.

Very helpful. Thank you.

Thank you.

Next question comes from Mitchell tenure as derivative accompanying Atlanta is okay.

So.

Are you seeing any.

Any add inflation any AD spend inflation given you know on the digital side at least.

Apple's changes.

You know move through the the digital industry.

Yeah. So good morning.

In general.

We expect some inflation in the advertising and marketing arena, just like we're seeing it in most other areas of our business and a lot of cases driven by wage inflation.

So we are anticipating it and will continue to.

Pivot our focus on the most effective areas of the investment so it's something we're thinking about and planning planning around.

Okay, and then just staying on the inflation theme.

Obviously used inflation and you.

Delineated.

The second of impact from a fee, but I was curious.

Whether there were any.

Any of your input costs ingredient cost anything there.

On that note in on the inflationary signing.

We have begun to see inflationary pressures begin to creep in as Chris talked talked about.

And we've been.

Executing price increases we continue to focus on cost reductions.

To address them.

I think the important thing around.

Inflation for us is that the magnitude of it is $15 million.

Hearing many other CPG companies talk about hundreds of millions of dollars of inflationary pressures.

That they're chasing so.

We're all over it we may have a little bit of a lapse.

Get ourselves ahead of it.

Which are second half outlook reflects but for the most part we're focused on it.

Is there any.

I.

Any pushback by any of your customers on any pricing conversation.

For the most part no right because it's something that they are hearing from every single one of their suppliers.

Even heard one CPG company talk about a thousand basis points or whatever it is of inflationary impact so.

We're not.

Unique in terms of addressing pricing for our products out there and again, having leading brands with significant market share puts us.

In a position to be effective at executing.

And then in terms of the retail channel excluding ecommerce what was your.

And any particular strengths bear or anything to call out was everything equal or some better than another.

Yeah, I think we called out drug right with the increased foot traffic was pretty strong.

That was probably we've talked about convenience in terms of year over year comps as folks get back out and travel and that's benefited our BT goodies brand, but really clear is clear.

Clear eyes brands. So those are probably the big outliers for this quarter.

Okay.

Okay.

You had three categories that were sort of almost a underperformers certainly relative underperformers.

Analgesics.

At women's help end world care and.

Any any anything in particular, you want to if you have been called out before anything else about those categories that were.

Notable.

There's nothing really notable.

Or anything that would impact kind of expected trends over or remainder of the year or longer term for any of those categories.

We've got some oddities of comp.

The first quarter for women's health last year.

An outlier with extremely strong shipments, particularly into E. Commerce. So we've got some comp comp issues here and some timing from quarter to quarter.

But nothing really to call out.

[laughter].

And then just.

One more question is.

Chris G&A.

Oh.

$27 million excluding.

You step up is there is there any is that the right level through the back half was there anything unusual in that number and the second quarter, you called and I apologize for not.

Hearing.

Yeah, I know Mitch Q2 for us for certain reasons is always higher than other quarters I did call for the dollars to step down sequentially, but think of G&A for us at a full year basis of about 95%.

And that will get you there.

The quarterly flow is really just timing in terms of expenses and I would think Q3 and Q4 would be pretty comparable.

Okay, and then is.

I think I missed this but what was your comments regarding the advertising and marketing expect for the back here.

We've talked about advertising and marketing to be approximately.

Approximately 15% for the year with 15 of your handguns and the third quarter.

Okay.

Alright, perfect. That's all I have thank you.

Thanks. Thanks.

Thank you I'm showing no further questions at this time I'd like to turn the call back over to Ron Lombardi by any clothing online.

Good. Thank you operator, and thanks to everyone for joining us today, and we look forward to future updates. Thank you.

Thank you ladies and download does that conclude a carpet. Thank you authenticating may now disconnect have great day.

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