Q1 2022 Energizer Holdings Inc Earnings Call

Speaker 1: Good morning. My name is Anthony L. Beard Conference Operator today. At this time, I'd like to welcome everyone to energize this first quarter fiscal year 222 conference call.

Good morning, My name is Anthony I'll be your conference operator today.

At this time I would like to welcome everyone to enterprises first quarter fiscal year 2022 conference call.

After the Speakers' remarks, there'll be a question and answer session.

Speaker 1: After the speaker's remarks, there will be a question and answer session. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. As a reminder, this call is being recorded.

Ask a question you May press Star then one on your telephone keypad.

To withdraw your question. Please press Star then two.

As a reminder, this call is being recorded.

Speaker 1: I'll now like to turn the conference call over to Jackie Burworth, Vice President of Investor Relations. You may begin your conference.

I'd now like to turn the conference call over to Jacky Pruitt.

As President of Investor Relations you May begin your conference.

Speaker 2: Good morning and welcome to Energizer's first quarter fiscal 2022 conference call. Joining me today are Mark Levine, President and Chief Executive Officer, and John Dravich, Chief Financial Officer.

Good morning, and welcome to <unk> first quarter fiscal 2000.

<unk> Conference call. Joining me today are Mark <unk>, President and Chief Executive Officer, and John <unk>, Chief Financial Officer.

Speaker 2: A replay of this call will be available on the Invest Relations section of our website. Intercept their holding.com.

A replay of this call will be available on the Investor Relations section of our website and our guys are holding back.

During the call we will make forward looking statements about the company's future business and financial performance among other matters. These.

Speaker 2: During the call, we will make forward-looking statements about the company's future business and financial performance, among other matters. These statements are based on management's current expectations and are subject to risk and uncertainty, including those resulting from the ongoing COVID-19 pandemic, which may cause actual results to differ materially from these statements. We do not undertake to other.

These statements are based on management's current expectations and are subject to risks and uncertainties, including those resulting from the ongoing COVID-19, pandemic, which may cause actual results to differ materially from these statements.

We do not undertake to update these forward looking statements other factors that could cause actual results to differ materially from these statements are included in reports, we file with the SEC.

Speaker 2: Other factors like response, ash results to differ materially from these statements are included in reports we filed with the F.

Speaker 2: We also refer in our presentation to non- GAAP financial measures. A reconciliation of non- GAAP financial measures to comparable GAAP measures is shown in our press release issued earlier today, which is available on our website.

Also refer in our presentation to non-GAAP financial measure a reconciliation of non-GAAP financial measures to comparable GAAP measures is shown in our press release issued earlier today, which is available on our website.

Information concerning our categories and estimated market share discussed on this call relates to categories, where we compete and is based on <unk> internal data data from industry analysis and estimates we place to be reasonable.

Speaker 2: Information concerning our categories and estimated market shares discuss on this call relates to categories where we can see and is based on Energizer's internal data data from industry analysis and estimates we believe to be read

Speaker 2: This quarter is a battery category information include both brick and mortar and e-commerce retail.

This quarter the battery category information includes both brick and mortar and e-commerce retail sale.

Unless otherwise noted all comments regarding the quarter and year pertained to energize this fiscal year and all comparisons to prior year relates to the same period in fiscal 2021 with that I would like to turn the call over to Mark.

Speaker 2: Unless otherwise noted, all comments regarding the quarter and the year pertain to Energizer's fiscal year and all comparisons to prior year relate to the same period in fiscal 2021. With that, I would like.

Thanks, Jackie and good morning, everyone.

Speaker 3: Thanks, Jackie and good morning everyone. I am pleased to be here this morning to share our 1st quarter 2022 results.

I am pleased to be here this morning to share our first quarter 2022 result.

Speaker 3: In our first quarter, strong demand, expanded distribution, and execution in the holiday season led to a solid start to our fiscal year.

Our first quarter strong demand.

And the distribution and execution in the holiday season led to a solid start to our fiscal year.

While the operating environment remains challenging our first quarter results are a testament to our team's preparation resilience and commitment.

Speaker 3: While the operating environment remains challenging, our first quarter results are a testament to our team's preparation, resilience, and commitment.

Before I go into detail on the quarter. There are three key points to take away from our call today.

Speaker 3: Before I go into detail on the quarter, there are three key points to take away from our call today.

First our team delivered in the critical holiday season, and our categories remains strong.

Speaker 3: First, our team delivered in the critical holiday season and our categories remain strong.

Speaker 3: Second, we continue to manage through a very challenging cost environment with increases in transportation, commodity, and labor costs, as well as ongoing supply chain disruptions.

Second we continued to manage through a very challenging cost environment with increases in transportation and commodity and labor costs as well as ongoing supply chain disruption.

Speaker 3: And third, as a result of our additional pricing actions and cost containment measures, we are reaffirming our outlook for net sales, adjusted earnings per share, and adjusted EBITDA for the full year. As we look specifically.

And third as a result of our additional pricing actions and cost containment measures. We are reaffirming our outlook for net sales adjusted earnings per share and adjusted EBITDA for the full year.

As we look specifically at the results for the quarter.

We maintain strengthen our topline delivering revenue of $846 million. This was roughly flat to prior year on an organic basis.

Speaker 3: We maintain strength in our top line, delivering revenue of $846 million. This was roughly flat to prior year on an organic basis.

Speaker 3: Global price increases and expanded distribution in the battery business were offset by an expected decline in volumes as we comp elevated COVID demand from the prior year.

Global price increases and expanded distribution in the battery business were offset by an expected decline in volumes as we comp elevated COVID-19 demand from the prior year.

Adjusted gross margin decreased 320 basis points as increased input costs, partially offset by price increases synergies and the comping prior year Covid costs.

Speaker 3: Adjusted gross margin decreased 320 basis points as increased input costs were partially offset by price increases, synergies, and the comping of prior year COVID costs.

On a sequential basis gross margin was roughly flat to the prior quarter consistent with our view for the start of the year.

Speaker 3: On a sequential basis, gross margin was roughly flat for the prior quarter, consistent with our view for the start of the year.

With our solid topline performance and lower interest expense.

Speaker 3: with our solid top line performance and lower interest expense.

We partially offset the gross margin decline and delivered adjusted earnings per share of $1 <unk> in the quarter.

Speaker 3: We partially offset the gross margin decline and delivered adjusted earnings per share of $1.03 in the quarter.

Before John provides more details on the quarter I want to provide some additional color on the performance of our categories. The rising cost environment. The resiliency of our supply chain and other actions, we have taken to operate with excellence and an uncertain environment.

Speaker 3: And Ford John provides more details on the quarter. I want to provide some additional color on the performance of our categories, the rising cost environment, the resiliency of our supply chain, and other actions we have taken to operate with excellence in an uncertain environment.

First our categories remain healthy with both battery and auto care, showing robust demand versus pre pandemic levels.

Speaker 3: First, our categories remain healthy, with both battery and auto care showing robust demand versus pre-pandemic levels.

Specifically the battery category benefited from two drivers.

Speaker 3: Specifically, the battery category benefited from two drivers, the increase in devices owned per household and an increase in usage of those devices, resulting in higher battery replacement frequency.

The increase in devices owned per household and an increase in usage of those devices, resulting in higher battery replacement frequency.

These trends have resulted in consumers using more batteries.

Speaker 3: These trends have resulted in consumers using more batteries on a 2 year stack basis. The global battery category has grown by 9.7% value and 7.8% in volume.

On a two year stacked basis, the global battery category has grown by nine 7% in value and seven 8% in volume.

Speaker 3: As anticipated, we saw the category decline in the three months ending November 2021, which was down 3.5% in value and 8.4% in volume.

As anticipated we saw the category decline in the three months ending November 2021.

Which was down three 5% in value and eight 4% in volume.

This was due to comping elevated demand in the prior year.

Speaker 3: This was due to comping elevated demand in the prior year.

As we look to the long term, we anticipate category value experienced flat to low single digit growth off a higher base as the category has increased in size due to consumers' behavior during the pandemic.

Speaker 3: As we look to the long term, we anticipate category value to experience flat to low single-digit growth off a higher base, as the category has increased in size due to consumers' behavior during the pandemic.

Alright, Connick brands outpaced the category, resulting in a one two share point gain versus last year with expanded distribution in the U S being the key driver.

Speaker 3: Our iconic brands outpaced the category, resulting in a 1.2 SharePoint gain versus last year, with expanded distribution in the U.S. being the key driver.

Speaker 3: As we turn to the auto care category, in the latest 13 weeks, category value was up 9% versus a year ago, and 20.6% on a two year stack basis.

As we turn to the auto care category in the latest 13 weeks category value was up 9% versus a year ago and 26% on a two year stack basis.

Speaker 3: As with batteries, the growth is being driven by changing consumer behavior, including do-it-yourself habits, which were established during the pandemic, such as higher levels of cleaning and renewed interest in car care as a hobby.

As with batteries to growth is being driven by changing consumer behavior.

Including do it yourself habits, which were established during the pandemic such as higher levels of cleaning and renewed interest in car care as a hobby.

A higher number of cars in the car park and an increase in the age of vehicles, given the shortage of new vehicles.

Speaker 3: a higher number of cars in the car park, and an increase in the age of vehicles given the shortage of new vehicles.

Speaker 3: and a recovery in miles driven given the increase in personal travel by car.

And a recovery in miles driven given the increase in personal travel by car.

As we look ahead, we anticipate that auto care category value will grow at low single digits. Once it has cycled through the COVID-19 related demand.

Speaker 3: As we look ahead, we anticipate that auto care category value will grow at low single digits. Once it has cycled through the covet related demand.

Energizer continues to be a leader in the auto care category through our strong portfolio of brands spin.

Speaker 3: Energizer continues to be a leader in the auto care category for a strong portfolio of brands.

Speaker 3: Specifically in appearance, the largest sub-segment in which we compete, our arm or all brand outpaced the category in the U.S. due to distribution gains and the strength of our innovation.

Specifically in appearance the largest sub segment in which we compete our armor all brand outpaced the category in the U S due to distribution gains and the strength of our innovation.

In addition, our international Auto care growth plan has resulted in growth ahead of the category in key markets, including Australia, Germany.

Speaker 3: In addition, our international auto care growth plan has resulted in growth ahead of the category in key markets, including Australia, Germany, New Zealand, the UK, and Mexico.

New Zealand, the UK and Mexico.

While our categories are healthy the macro environment in which we are operating remains difficult. This leads me to the next important topic operating costs.

Speaker 3: While our categories are healthy, the macro environment in which we are operating remains difficult. This leads me to the next important topic, Operating Cost.

Commodities transportation and labor costs continue to rise, resulting in increased cost pressures that are incremental to the outlook. We provided in November .

Speaker 3: commodities, transportation and labor costs continue to rise, resulting in increased cost pressures that are incremental to the outlook we provided in November . We have moved quickly to offset these pressures through additional pricing actions, cost reduction initiatives, and improve mixed management.

We have moved quickly to offset these pressures through additional pricing actions cost reduction initiatives and improved mix management.

Speaker 3: Pricing actions in both our segments were announced within the last couple of weeks and are incremental to the increases discussed in November

Pricing actions in both of our segments were announced within the last couple of weeks and are incremental to the increases discussed in November .

Speaker 3: They will become effective late in the second quarter for North America and in the third quarter for international markets.

They will become effective late in the second quarter for North America and in the third quarter for international market.

Speaker 3: We expect the cumulative effect of these actions to offset the inflationary cost pressures on a dollar base.

We expect the cumulative effect of these actions to offset the.

Inflationary cost pressures on a dollar basis.

In addition to inflationary pressures the global supply chain network remains stressed from pandemic related disruptions, which includes port congestion and transportation delays as well as availability challenges with respect to labor sourced product and raw materials.

Speaker 3: In addition to inflationary pressures, the global supply chain network remains stressed from pandemic-related disruptions, which includes port congestion and transportation delays, as well as availability challenges with respect to labor, source product, and raw materials.

Speaker 3: As a result of this dynamic, we took a proactive approach by investing in incremental inventory in the prior year and also in the current quarter.

As a result of this dynamic we took a proactive approach by investing in incremental inventory in the prior year and also in the current quarter.

This decision to pay dividends as we were positioned to meet our customers' and consumers' needs and delivered a successful first quarter, we expect to operate with elevated safety stock for the foreseeable future, while we monitor the supply network for signs of stability.

Speaker 3: This decision paid dividends as we were positioned to meet our customers and consumers needs and delivered a successful first quarter. We expect to operate with elevated safety stock for the foreseeable future while we monitor the supply network for signs of stability.

As you can see the business is operating on solid footing and the underpinnings of our categories remain healthy and in a stronger position than before the pandemic.

Speaker 3: As you can see, the business is operating on solid footing and the underpinnings of our categories remain healthy and in a stronger position than before the pandemic. Even with the difficulties we experienced, we delivered strong results and are on track to deliver another successful year. Now, let me turn the call over to John to provide additional details about our financial performance in the quarter.

Even with the difficulties we experienced we delivered strong results and are on track to deliver another successful year.

Now, let me turn the call over to John to provide additional details about our financial performance in the quarter.

Good morning, everyone before expanding on the financial highlights I would like to point out that our segment reporting has changed from two geographical segment the two product lines.

Going forward, our two segments will be battery and lighting products and auto care more accurately reflecting how we manage the operations.

Speaker 3: Going forward, our two segments will be battery and lighting products and auto care, more accurately reflecting how we manage the output.

Press release issued earlier today recast the prior year first quarter to align with this new segment reporting.

Speaker 3: Press release issued earlier today recast the prior year first quarter to align with this new segment report.

Now turning to our results reported and organic revenues were both essentially flat.

Speaker 3: Now, turning to our results, reported and organic revenues were both essentially flat.

In battery and lights strong demand and solid execution resulted in a modest decline in organic sales.

Speaker 3: In battery and lights, strong demand and solid execution resulted in a modest decline in organic sales, while AutoCare continued its strong performance with organic growth of 1.3%.

Auto care continued its strong performance with organic growth of one 3%.

Speaker 3: Pricing actions globally delivered roughly 2% growth and additional distribution contributed another 1%.

Pricing actions globally delivered roughly 2% growth in additional distribution contributed another 1%.

Offsetting these gains was a decrease in replenishment volumes driven by the timing of Covid related demand in the prior year.

Speaker 3: Offsetting these gains was a decrease in replenishment volumes driven by the timing of COVID-related demand in the prior.

As a reminder, we executed price increases in our battery segments in the first quarter of this year and we have taken pricing in auto care in both the second and third quarters of the prior year.

Speaker 3: As a reminder, we executed price increases in our battery segment in the first quarter of this year, and we have taken pricing in auto care in both the second and third quarters of the prior year.

The impact of these pricing actions was reflected in our initial outlook for this year.

Speaker 3: The impact of these pricing actions was reflected in our initial outlook for this year.

As Mark mentioned, we experienced significant incremental cost pressures during the first quarter and moved quickly to implement additional pricing that will benefit the second half of fiscal 2022.

Speaker 3: As Mark mentioned, we experienced significant incremental cost pressures during the first quarter and moved quickly to implement additional pricing that will benefit the second half of the year.

Sequentially adjusted gross margin was roughly flat versus the fourth quarter of fiscal 2020.

Speaker 3: Sequentially, adjusted gross margin was roughly flat versus the fourth quarter of fiscal 2020.

As we expected however.

Speaker 3: However, adjusted gross margin decreased 320 basis.

However, adjusted gross margin decreased 320 basis points to 37, 5% versus the first quarter of 2021 as pricing lower COVID-19 related costs and synergies were offset by more than 700 basis points of margin erosion from inflationary cost pressures.

Speaker 3: The 37.5% versus the first quarter of 2021 as pricing lower COVID-related costs and synergies were offset by more than 700 basis points of margin erosion from inflationary costs.

This quarter also marks the conclusion of the integration of our battery and auto acquisition.

Speaker 3: This quarter also marks the conclusion of the integration of our battery and auto acquisition.

The successful integration positions us well to focus on continuous improvement initiatives to offset inflationary pressures going forward.

Speaker 3: The successful integration positions us well to focus on continuous improvement initiatives, meant footballs,uates,oj refreshers, opponents or connais. Thanks for watching.

Speaker 3: A&P as a percent of sales was 6.1% versus 5.8% in the prior year as a result of planned increased.

A&P as a percent of sales was six 1% versus five 8% from the prior year as a result of planned increase spend.

Speaker 3: We remain committed to investing in our brands for the long-term health of our business.

We remain committed to investing in our brands for the long term health of our business.

Speaker 3: excluding acquisition and integration costs. SCNA as a percentage of net sales was roughly flat at 13.2%.

Excluding acquisition and integration costs SG&A as a percentage of net sales was roughly flat at 13, 2%, but declined $2 million on an absolute basis as lower compensation expense was partially offset by increased travel and higher it spending related to our digital transformation.

Speaker 3: but declined $2 million on an absolute basis as lower compensation.

Speaker 3: was partially offset by increased travel and higher IT spending related to our digital transformation.

Looking at segment profit, both battery and lights and auto care benefited from continued strong demand pricing actions and distribution gains.

Speaker 3: Looking at segment profit, both battery and lights and auto care benefited from continued strong demand, pricing actions and distribution.

However, the inflationary input cost pressures more than offset the stronger than expected topline performance.

Speaker 3: However, the inflationary input cost pressures more than offset the stronger than expected top line.

Speaker 3: This impact flowed through to the bottom line for each business, resulting in a segment profit decline of 12 million dollars for battery and 18 million dollars in auto.

This impact flowed through to the bottom line for each business, resulting in a segment profit decline of $12 million for battery and $18 million in autos.

Interest expense was $37 million or $10 $3 million lower than the prior year, reflecting the benefits of significant refinancing activity of our debt capital structure over the past year.

Speaker 3: interest expense was $37 million, or $10.3 million lower than the prior year reflecting the benefits of significant refinancing activity of our debt capital structure over the past

Speaker 3: We expect a similar quarterly run rate for interest expense over the remainder of the year.

We expect a similar quarterly run rate for interest expense over the remainder of the year.

I would also like to point out changes to our shares outstanding for the quarter and the remainder of the year.

Speaker 3: I would also like to point out changes to our shares outstanding for the quarter and the remainder of the year.

Speaker 3: In the first quarter, we completed the Accelerated Share Repurchase Program that was announced last August . The total number of shares purchased under this program is $1,000,000.

In the first quarter, we completed the accelerated share repurchase program that was announced last August .

The total number of shares purchased under this program was nearly 2 million.

Speaker 3: Additionally, on January 18th, our mandatory convertible stock converted to approximately $4.7 million common share.

Additionally, on January 18, our mandatory convertible preferred stock converted to approximately $4 7 million common shares.

Absent any additional share repurchase weighted average shares outstanding for the remainder of the year will be approximately 72 million.

Speaker 3: Absent any additional share repurchase, weighted average shares outstanding for the remainder of the year will be approximately $7,000.

As we look at our outlook for 2022.

Speaker 3: As we look at our outlook for 2022, we are facing a number of gross margins.

We are facing a number of gross margin.

We continue to experience significant cost pressures in transportation, driven primarily by the global backlog of Ocean freight.

Speaker 3: We continue to experience significant cost pressures in transportation, driven primarily by the global backlog of ocean.

In addition, labor availability is a major challenge across most U S sites pressuring rates.

Speaker 3: In addition, labor availability is a major challenge across both U.S. sites, pressuring race.

And finally, many commodity markets remain at all time highs impacting our raw material costs.

Speaker 3: And finally, many commodity markets remain at all-time highs, impacting our raw material cost.

Through a combination of pricing actions improved mixed management and cost reduction efforts, we expect to offset the absolute dollar amounts of these rising costs.

Speaker 3: Through a combination of pricing actions, improved mix management, and cost reduction efforts, we expect to offset the absolute dollar amount of these rising costs.

Speaker 3: However, due to the lag in timing between the recognition of these higher costs and the successful rollout of our pricing actions and cost production efforts, we expect as much as 50 basis points of additional gross margin pressure to impact us for the full year 2022.

However, due to the lag in timing between the recognition of these higher costs and the successful rollout of our pricing actions and cost reduction efforts, we expect as much as 50 basis points of additional gross margin pressure to impact us for the full year 2022.

Speaker 3: This is incremental to the hundred and fifty basis points provided in our outlook.

This is incremental to the 150 basis points provided in our outlook in November .

Speaker 3: We expect to see the most significant impact of gross margin in our second fiscal quarter as we will absorb the full effect of these costs without the offset from our incremental pricing.

We expect to see the most significant impact to gross margin in our second fiscal quarter as we will absorb the full effect of these costs without the offset from our incremental pricing.

With the benefit of the actions we are taking now we expect gross margin to recover in the back half of the year.

Speaker 3: With the benefit of the actions we are taking now, we expect gross margin to recover in the back half.

Given the continued strength of demand in our categories in our efforts to offset the majority of these headwinds through pricing and cost reduction initiatives. We are maintaining our fiscal 2022 outlook for roughly flat net sales adjusted earnings per share in the range of $3 to $3 30.

Speaker 3: given the continued strength of demand in our categories and our efforts to offset the majority of these headwinds through pricing and cost reduction initiatives.

Speaker 3: We are maintaining our fiscal 2022 outlook for roughly flat net sales, adjusted earnings per share in the range of 3 dollars to 3 dollars and 30 cents and adjusted EBITDA of 560 to 590 million dollars. Now, I would like to.

And adjusted EBITDA of $560 to $590 million.

Now I would like to turn the call back to Mark for closing remarks.

Thanks, John as I mentioned at the beginning of the call our team delivered well in the critical holiday season, and our categories performed well globally.

Speaker 3: Thanks, John . As I mentioned at the beginning of the call, our team delivered well in the critical holiday season and our categories performed well globally.

Speaker 3: Like many companies, we also continue to face a rising cost environment and supply chain disruption.

Like many companies. We are also continuing to face a rising cost environment and supply chain disruption.

Speaker 3: Given these conditions, we are taking aggressive action, cost set, the most recent cost escalation, including an additional recently announced pricing action in North America battery and auto care.

Given these conditions, we are taking aggressive action to offset the most recent cost escalation, including an additional.

Recently announced pricing action in North America battery and auto care.

We remain confident in our outlook for the year reflected and our reaffirmation of our guidance for net sales adjusted earnings per share and adjusted EBITDA.

Speaker 3: We remain confident in our outlook for the year, reflected in our reaffirmation of our guidance for net sales, adjusted earnings per share, and adjusted EBITDA.

Speaker 3: I am incredibly proud of our team to continue to operate with excellence. And deliver on our priorities and commitment, but that I will open the call for question.

I am incredibly proud of our team to continue to operate with excellence and deliver on our priorities and commitments with that I will open the call for questions.

We will now begin the question and answer session.

Speaker 1: To ask a question, you may press star then 1 on your telephone keypad.

To ask a question you May press Star then one on your telephone keypad.

Speaker 1: If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, press the button on the screen.

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To withdraw your question. Please press Star then two please.

Speaker 1: Please limit yourself to one question and one follow-up. At this time, we'll pause momentarily to assemble our roster.

Please limit yourself to one question and one follow up.

At this time, we will pause momentarily to assemble our roster.

At this time, we will take Lauren Lieberman with Barclays. You May now go ahead.

Speaker 1: At this time, we'll take Lauren Lieberman with Barclays. You may now go ahead.

Speaker 4: Great. Thanks. Good morning. Good morning, Laura. Hey, so, John , you gave us some great color already on gross margin and are very clear on the pricing catching up with costs in dollar terms, but I was just curious a little bit more about how to think about progression of gross margin through the year, because I would think there should also be some incremental pricing that shows up in the second quarter by virtue of timing of some of the battery pricing really showing up on shelves that's already, you know, been making its way to the market.

Great. Thanks, good morning.

Learn more.

So John you gave us some great color already on gross margin are very clear on the pricing catching up with cost in dollar terms, but I was just curious a little bit more about how to think about progression of gross margin through the year because I would think there should also be some incremental pricing that shows up in the second quarter by virtue of timing of some of the battery pricing really showing up on shelf that's alright.

<unk> been making its way to the market.

Speaker 4: And then also knowing what you've offered on incremental costs, you know, how front halfway that is. And when we think about recovery in the back half, is it, you know, off just in the fourth quarter, what to be our benchmark for, what level we're kind of able to be marching towards, any further color would be great. Thanks.

And then also knowing what <unk> offered on incremental costs.

How front half weighted that is and when we think about recovery in the back half is it.

Just in the fourth quarter, what should be our benchmark for what level, we're kind of able to be marching towards any any further color would be great. Thanks.

Yes, John and I will tag team. This one I will kick it off and then John will give some detail on how the year.

Speaker 3: Or what John and I'll tagging this one. I'll kick it off and then John will get some detail on how the year we expect to play out in the pressures we're feeling. And if you recall, in November , we were already experiencing inflation and made the assumption on our last call that it would last for all of this with 22.

We expect to play out and the pressures we're feeling if you recall in November we were already experiencing inflation and made the assumption on our last call that it would last for all of fiscal 'twenty two.

Speaker 3: At that time, we had already engaged in a number of cost reduction activities as well as pricing that we executed in the marketplace.

At that time, we had already engaged in a number of cost reduction activities as well as pricing.

We executed in the marketplace. Since then the inflationary environment has gotten worse, but we were more aggressive. This time, we've executed additional price increases in January in our U S battery business, we've executed last week on the auto care business.

Speaker 3: Since then, you know, the inflationary environment has gotten worse, but we were more aggressive this time. We've executed additional price increases in January in our U.S. battery business. We've executed last week on the auto care business. We're also revisiting the international increases in certain markets. We'll go back a second time in other markets. We'll just take larger increases on the first round.

Also revisiting the international increases in.

In certain markets, we will go back a second time in other markets. We'll just take larger increases on the first round all of these increases most of them will be effective at the end of Q2. So as we enter into Q3, we should have the benefit of these price increases, but we will have to work through some of the cross cost pressures that we'll experience in Q2, and John you want to walk through maybe some additional.

Speaker 3: All of these increases, most of them will be effective at the end of Q2. So as we enter into Q3, we should have the benefit of these price increases, but we will have to work through some of the cost pressures that we'll experience in Q2. And John , you want to walk through maybe some additional details? Yeah, Lauren, let me decompose and kind of start at the beginning, because there was a fair amount coming into the year. And then as we go through the rest of it, there's a fair amount of incremental costs. So what I talked about last quarter was 500 basis points of incremental costs.

Details, yes Lauren.

Let me decompose kind of start at the beginning because there was a fair amount coming into the year and then as we go through the rest of the Theres a fair amount of incremental cost so.

When I talked about last quarter was.

500 basis points of incremental cost that we expected to negatively impact on our results and that's a lot of the pricing and cost save initiatives that Mark said, we took going into the year on a run rate basis. We did anticipate that we would roughly offset the dollars.

Speaker 3: that we expected the negatively impact our results. And that's a lot of the pricing and cost-saving issues that Mark said we took.

Speaker 3: Going into the year, you know, on a run rate basis, we did anticipate that we would roughly offset the dollars.

Speaker 3: And then the net impact for the year would be about 150 basis point decline in gross market.

And then the net impact for the year would be about 150 basis point decline in gross margin. So in the first quarter really went well for US who played out as we expected, but as the quarter progressed, we continued to experience significant additional inflation some of the items that we've seen zinc has gone up.

Speaker 3: So the first quarter, you know, really went well for us. It played out as we expected. But as the quarter progressed, you know, we continue to experience significant additional inflation.

Speaker 3: You know, some of the items that we've seen zinc has gone up around 10%, just since November over that same time is almost up 20%.

Around 10% just since November .

At the same time <unk> almost up 20% lithium is up even higher percentage in the auto category. We've also seen significant increases in things like silicone and our 134 a gas. So when you combine that with the continued elevated transportation constant we're seeing what we're calling for for the full year as another incremental 400 base.

Speaker 3: Lithium is up even higher percentage and in the auto category. We've also seen significant increases and things like silicone

Speaker 3: And our 134 gas, so, you know, when you combine that with the continued elevated transportation costs that we're saying what we're calling for for the full year is another incremental 400 basis points of headwinds. And so, as Mark talked about the pricing that we've. Just announced and continue to expect to impact the.

<unk> points of headwinds and so as Mark talked about the pricing that we've just announced and continue to expect to impact the year that should give us the benefit on the pricing side in the back half of the year.

Speaker 3: That should give us the benefit on the pricing side in the back half of the year.

Speaker 3: But we're seeing about 400 basis points of incremental at once for the full year. So, you know,

But we're seeing about 400 basis points of incremental headwinds for the full year. So.

Similar to the dynamic that we saw coming into the year.

Speaker 3: Similar to the dynamic that we saw coming into the year, gross margin rate, you know, we're expecting 50 basis points of incremental headwinds.

Gross margin rate, we're expecting 50 basis points of incremental headwinds.

Speaker 3: Mostly because of timing and the fact that we're not margining up. So we're passing through the cost but not raising rates.

Mostly because of timing and the fact that we're not margining up so we're passing through the cost, but not raising rates and so on.

Speaker 3: So our expectation is that the pricing and cost actions that we have moved quickly to take this quarter will get us close to our original full-year view on gross margin. We delivered first quarter roughly in line with our expectations. We expect to see a dip in the second quarter, and then with the pricing coming in, we'll see continued improvement in the back half.

Our expectation is that the pricing and cost actions that we have moved quickly to take this quarter will get us closer to our original full year view on gross margin.

We delivered first quarter roughly in line with our expectations, we expect to see a dip in the second quarter.

And then in <unk>.

With the pricing coming in we will see continued improvement in the back half of the year.

Okay, great. Thanks, and then I had a more strategic question because one of the things that was most interesting to me last quarter was.

Speaker 4: Okay, great. Thanks. And then I had a more strategic question because one of the things that was most interesting to me last quarter was the more detail you were beginning to share on some of the price pack realignment work that you've been putting in market. So just any updates there on what you're seeing in terms of shelf stats, how much more widely that might be in place if you've seen competition follow suit in any way, so kind of on-shelf look and feel, is frankly what I'm asking about. Thanks.

The more detail you are beginning to share on some of the price pack realignment work that you've been putting in market.

Any update there on what youre seeing in terms of shelf tacked, how much more widely that might be in place if you've seen comp.

Competition, followed suit in any way.

So kind of on shelf.

What I'm asking about thanks.

Speaker 3: Laura, we did execute the price increase that went into effect on October 1st. We did take a more progressive nature of that price increase with larger pack sizes. Thank you.

When we did execute the price increase that went into effect on October one we did take a more progressive nature of that price increase with larger pack sizes.

Executing higher percentage increases for the purposes of the price increase that we executed in January we did not double down on that strategy and it's not because we didnt believe it was a good one it was just ease and simplicity of execution in this environment, because we were moving faster and frankly, because the execution timeframe.

Speaker 3: Executing higher percentage increases for the purposes of the price increase that we executed in January . We did not. Double down on that strategy, and it's not because we didn't believe it was a good 1. it was just ease and simplicity of execution. In this environment, because we were moving faster and frankly, because the execution timeframe.

Speaker 3: We're striving for 60 days, simply going with a straight percentage increase made more sense to us at this time. We have seen, you know, in the pricing realignment show up on shelves similar to what we did in our 1st round and that's encouraging. And it's certainly something we'll continue to look at in the future.

We're striving for 60 days simply going with a straight percentage increase.

More sense to us at this time, we have seen.

The pricing realignment show up on shelf similar to what we did in our first round and that's encouraging and it's certainly something we'll continue to look at in the future.

Great. Thanks, so much.

Thanks Mark.

Speaker 1: Our next question comes from Nick Modi with RBC Capital Markets. You may now go ahead.

Our next question comes from Nik Modi with RBC capital markets. You May now go ahead.

Yes. Thank you good morning, everyone.

Speaker 5: Yeah, thank you. Good morning everyone. So, John , maybe you could just talk about the top line. I mean, obviously, very good results, but you're holding your guide for the full year. Just wanted to understand the put and take on that standpoint. And then just more broadly, if you could just share what you're seeing from a competitive standpoint in terms of pricing. Has everyone pretty much taken price in the category to the same degree? Thanks.

So John maybe you could just talk about the top line and obviously very very good result, but you're holding your guide for the full year. So just wanted to under the puts and takes on that standpoint, and then just more broadly if you could just share what you're seeing from a competitive standpoint in terms of pricing everyone pretty much taken pipe.

In the category.

Great.

Thanks.

I can start with that second one Nick I think from a competitive activity I mean, as we look at the retail landscape. We are seeing category movement across all of our categories, where youre seeing.

Speaker 3: I can start with that 2nd, 1, Nick, I think from a competitive activity, I mean, as we look at the retail landscape, we are seeing category movement across all of our categories where you're seeing. Uh, not just energizer products, but competitive product, private label. I generally move up as.

Not just energizer products with competitive products private label generally move up as is everyone is experiencing the inflation that we've talked about so I think that as long as those price gaps stay roughly consistent with historical norms than that won't introduce a different dynamic other than just higher pricing across the category.

Speaker 3: as everyone's experiencing the inflation that we've talked about. So I think that as long as those price gaps stay roughly consistent with historical norms, then that won't introduce a different dynamic other than just higher pricing across the category. In terms of the top line, we obviously had a great Q1. In terms of the outlook for the balance of the year, we're one quarter in, in a fairly dynamic environment right now. I didn't feel prudent to try and

In terms of the top line, we obviously had a great Q1 in terms of the outlook for the balance of the year.

One quarter in in a fairly dynamic environment right now didn't feel prudent to try in.

Speaker 3: And try and change our outlook for the overall year and instead we're just going to continue to execute. The price increases that we've talked about continue to execute supply chain. Excellence throughout the organization and really drive to deliver the outlook we provided in November .

And trying to change our outlook for the overall year and so we're just going to continue to execute the price increases that we've talked about continue to execute supply chain.

Excellent throughout the organization and really drive to deliver the outlook we provided in November .

I mean, obviously it was a good quarter.

Speaker 3: I mean, obviously it was a good quarter. We saw the pricing start to take hold, but we also are anticipating that there would be some volume impact. We're also comping very big first half of last year, so as we kind of look out, as Mark said, it's first quarter. We're going to stick with our outlook.

We saw the pricing start to take hold but we also.

Anticipating that there would be some volume impact. We're also comping very big first half last year. So as we kind of look out as Mark said its first quarter, we're going to stick with our outlook at this point.

Excellent and I can just follow up on.

Speaker 5: Excellent, and if I could just follow up on just a quick labor question. I mean, are you guys seeing things start to improve at all? I mean, is there any loosening of the market, any thought around that?

Quick Labor question I mean are you guys seeing things start to improve at all I mean is there any loosening of the market any buffer on that.

I would say that tends to be very location specific in terms of labor availability and the rate that you have to pay.

Speaker 6: I would say that tends to be very location specific in terms of labor availability and the rate that you have to pay, you know, typically for temp labor, which many of our facilities utilize. I would, I would say there's been some mild improvement in certain areas, but it's not consistent enough. You have to call it a trend.

We have for temp labor with many of our facilities utilized.

I would.

Theres been some mild improvement in certain areas, but it's not consistent enough yet to call. It a trend.

Great that's a lumpy Franco.

Yes.

Our next question comes from Andrea Syria, with J P. Morgan.

Speaker 1: Our next question comes from Andrea Pikesiria with J.P. Morgan.

Now go ahead.

Thank you. Good morning. My question is on the distribution side and obviously you had an impressive increase in distribution last year.

Speaker 7: Thank you. Good morning. My question is on the distribution side. And obviously, you had an impressive increase in distribution last year. I was wondering if you can comment, how are you positioning into the spring shelf resets and how you're seeing private label part of the conversation during this earnings season by peers has been.

I was wondering if you can comment how you're positioning into the spring shelf resets and how youre seeing private label part of the conversation during this earning season by peers has been.

Speaker 7: potentially the normalization of private label availability. Of course, you've been gaining a lot of share over the past few years. Just curious if you were seeing your retailers starting to bring that conversation just to barbell the pricing and the pricing actions you've taken. Thank you.

Nathan no monetization of private label availability of course, you've been gaining a lot of share over the past few years, just curious if youre seeing your retailers.

Starting to bring that conversation just a bar bell.

The pricing and the pricing actions you've taken thank you.

Hunter I would say.

Speaker 6: Andrew, I would say the discussions that we're having across both of our main categories are roughly consistent with what they've been in the past. I think private label has been a part of, for instance, the battery category for a long time.

Discussions that we're having across both of our main categories are roughly consistent with what they've been in the past I think private label has been a part of for instance, the battery category for a long time.

Speaker 6: We have seen private label price increase moving at the same, roughly at the same rate that we've seen branded products, but private label will always be part of the discussion. From a distribution gain, we had a very healthy distribution gain here in 21, and that's going to continue to benefit us into 22. We expect distribution gains positively impact top line really in the Q3, and as a result of some of the great work from the.

We have seen private label price increase.

Moving at the same roughly at the same rate that we've seen branded branded products, but private label will always be part of the discussion from a distribution gains we had a very healthy distribution gain year in 'twenty, one and that's going to continue to benefit benefit us into 'twenty two we expect.

Distribution gains positively impact topline really into Q3.

And as a result of some of the great work from the commercial team, but private label. If you look at globally as well as in the U S declined over the last reporting period.

Speaker 6: But private label, if you look at globally, as well as in the U.S., has declined over the last reporting period. I do think as we get into uncertain economic environments in the future, that certainly you can tend to see some softening and trade-down in the private label. It's something we've experienced in the past, but it's obviously something we'll watch and make sure we manage appropriately.

I do think as we get into uncertain economic environments in the future that certainly you can tend to see some softening in trade down into private label, it's something we've experienced in the past, but it's obviously something we will watch to make sure we manage appropriately.

Speaker 7: And that's super helpful. And then on the pricing, just a clarification, you're saying the additional pricing would be mid-single, and is that an international? That includes global, or that's mostly US?

And then Super helpful and then.

And then on the pricing just a clarification you are saying the additional pricing would be mid single and is that on an international that includes global ROI, that's mostly U S.

That's a great question Andre let me see if I can just level set pricing and kind of where we are because there's so many different moving pieces that we've executed let me go back to fiscal 'twenty. One we took our first round of pricing in auto care, which was effective August one we took another round in refrigerants only that was effective December one.

Speaker 6: That's a great question, Andrea. Let me see if I can just level set pricing and kind of where we are, because there's so many different moving pieces that we've executed. Let me go back to fiscal 21. We took our first round of pricing in auto care, which was effective August 1st. We took another round in refrigerants only that was effective December 1st.

Speaker 6: If you recall last summer, we also announced our 1st round of battery battery pricing in the US, which was effective October 1st.

If you recall last summer, we also announced our first round of battery.

Battery pricing in the U S, which was effective October one and.

Speaker 6: And that was all executed in fiscal 21, as we got into November and the inflationary pressures that both John and I have talked about. We recognize the need. For additional pricing, we executed an additional round of battery pricing on January 15. With a 60 day effective date. We've also announced on February 1st, additional auto care pricing with an effective date around April 1st.

And that was all executed in fiscal 'twenty, one as we got into November and the inflationary pressures that both John and I have talked about we recognize the need for additional pricing we executed an additional round of battery pricing on January 15th.

With a 60 day effective.

Date, we've also announced on February one additional auto care pricing with an effective date around April one.

Speaker 6: There's multiple rounds of pricing. If you get into the international market, it's very difficult to provide a quick summary of that, and it would take probably too much time. But what I would say is we're taking pricing across.

So there is a multiple rounds of pricing if you get into the international market is very difficult to provide a quick summary of that and it would take.

Probably too much time, but what I would say is we're taking pricing across many if not all of our international markets in some form or fashion. Some of them will experience higher one time increases others, depending upon where they were in the pricing pre cycle will get a second round.

Speaker 6: many, if not all, of our international markets in some form or fashion. Some of them will experience higher one-time increases. Others, depending upon where they were in the price increase cycle, will get a second round in the future. So it's all in. What I would say is about 95% of the portfolio will experience price increases, some of them multiple times. And all the pricing should be in place and executed, or most of it should be executed by April 1st.

In the future. So it's all in what I would say is about 95% of the portfolio will experienced price increases some of them multiple times.

And all of the pricing should be in place and executed where most of it should be executed by April one.

That's super helpful and you were leading pricing or in many ways and you are seeing your competitor.

Speaker 7: That's super helpful. And you're leading pricing or in many ways and you're seeing your competitor...

Branded competitor come through or there is assume some delay.

Speaker 6: branded competitor come through or there's issue with some delay there? Yeah, I would say that's just not how we look at it. I would say we're taking pricing that we need for our business and we're managing it appropriately and executing when we think it's justified and how competition does that with respect to their business will lead to that.

Yes, I would say, it's just not how we look at it I would say, we're taking pricing that we need for our business and we're managing it appropriately and executing when we think it's justified and how competition does that with respect to their business fully for them.

Speaker 7: Okay, that's fair. Thank you so much. I'll pass it on. Congrats again.

Okay. That's fair. Thank you so much I'll pass it on congrats again.

Thank you.

Okay.

Speaker 1: Our next question comes from Wendy Nicholson with Citi. You may now go ahead.

Our next question comes from Wendy Nicholson with Citi. You May now go ahead.

Hi, I wanted to focus more on the capital allocation side. I know you said that you are largely finished with the integration of the acquisition.

Speaker 8: Hi, I wanted to focus more on the capital allocation side. I know you said that you're largely.

Speaker 8: Finished with the integration of the acquisition. So does that sort of make you feel maybe more confident as you look ahead about looking.

Is that sort of makes you feel maybe more confident as you look ahead about looking for other acquisitions I know M&A has kind of taken a back seat for a lot of companies. During COVID-19 does that become more of a priority for you and now that you've exhausted the share repurchase program.

Speaker 8: For other acquisitions, I know M&A has kind of taken a backseat for a lot of companies during COVID. You know, does that become more of a priority for you? And now that you've exhausted the share repurchase program, what's the plan going forward? Do you expect to re-up that and open up a new one? Any color on that would be great.

What's the plan going forward do you expect to re up that and opened up a new one any color around that would be great.

I would say Wendy initially our focus is on gross margin recovery.

Speaker 6: I would say, Wendy, initially our focus is on gross margin recovery, and I think that's the focus of the organization primarily. When it comes to capital allocation, what I would say is M&A is of a reduced interest at the moment just because of our leverage levels, and there is an enhanced interest on our part to de-lever a little bit before engaging in any meaningful M&A activity.

I think thats the focus of the organization, primarily when it comes to capital allocation.

What I would say is.

M&A is.

Of a reduced interest at the moment, just because of our leverage levels.

And there is an enhanced interest on our part.

To delever, a little bit before engaging in any meaningful M&A activity.

Yes, maybe to add a little bit.

Speaker 3: Yeah, maybe to add a little bit, you know, we've invested a fair amount of working capital. Wendy, so we probably got a half a turn that we're financing right now and working capital. And I would say that as free cash flow normalizes, we would look to probably pay down some debt and then to mark point. Emanuele.

We've invested a fair amount of working capital.

So we probably got a half a turn.

Our financing right now on working capital and I would say that as free cash flow normalizes, we would look to probably pay down some debt and then to marks point M&A would be after that.

Speaker 8: Got it. Got it. And then just on the auto side, more just from a demand perspective, do you have a sense, I mean, obviously,

Got it got it and then just on the auto side.

More just from a demand perspective.

A sense I mean, obviously.

People habits have changed in terms of how much they're commuting or whether they are using their car for vacations. I mean do you have any sense for kind of going into the spring summer the big sort of auto demand.

Speaker 8: Habits have changed in terms of how much they're commuting or whether they're using their car for vacations I mean do you have any sense for kind of going into the spring summer the big sort of auto demand? car cycle what however you want to Define it, but but do you have a sense for kind of what demand will look like when more people be in their cars?

Car cycle, However, you want to.

Just fine it but do you have a sense for kind of what demand will look like well more people be in their cars. This summer compared to last for more people be going on planes and traveling anything that you do you have from sort of a sentiment perspective on the demand side of the auto care side.

Speaker 8: This summer compared to last, will more people be going on planes and traveling? Anything that you have from sort of a sentiment perspective on the demand side of the auto care side. Thanks.

Speaker 6: Wendy, I think the demand in the auto care segment is very healthy. I think if you look at the primary drivers of the category, the size of the car park, which is increasing.

When the I think the demand in the auto care segment is very healthy I think if you look at the primary drivers of the category.

Size of the car park, which is increasing the age of vehicles, which is increasing because of the difficulty that people are having buying new cars as well as the number of miles driven as people get back to more normalized level of travel all of those are trending in a positive direction youre seeing it play out with very healthy category growth I mean, if you look.

Speaker 6: The age of vehicles, which is increasing because of the difficulty that people are having buying new cars as well as the number of miles driven. As people get back to more normalized level of travel. All of those are trending in a positive direction.

Speaker 6: You're seeing it play out with very healthy category growth. I mean, if you look at a two-year stack basis in the auto care segment, it's about 20%.

At a two year stack basis in the auto care segment about 20%. Our results have followed I mean, we're calling for the auto care to be up 2% this year and thats off a growth of 16% last year. We have we're off to a great start in our international auto care growth, we're gaining share, particularly in appearance in many of our major international markets.

Speaker 6: Our results have followed, I mean, we're calling for the auto care to be up 2% this year and that's off a growth of 16% last year. We have, we're off to a great start in our international auto care growth. We're gaining share, particularly in appearance. In many of our, our major international markets.

Speaker 6: So from an overall consumer sentiment, I would say, you know, consumers seem to be resilient. Our brands are certainly strong. And as a result, you're seeing an increased interest in the category. I do think if you hit economic downturns, one of the interesting things about this is you may have some consumers who walk away from purchasing the product, but you also have an offset, a natural offset where people will go from do it for me to do it yourself.

So from an overall consumer sentiment.

I would say consumers seem to be resilient. Our brands are certainly strong and as a result, youre seeing an increased interest in the category I do think if you hit.

Economic downturns one of the.

Interesting things about this is you may you may have some consumers who walk away from purchasing the product, but you also have an offset of natural offset where people will go from do it for me to do it yourself.

Speaker 6: So we have a natural hedge built in as the economic cycle sort of ebb and flow.

We have a natural hedge built in as the economic cycle sort of ebb and flow.

Got it fair enough. Thanks, so much for the color.

Thanks Linda.

Yes.

Speaker 1: Our next question comes from Kevin Grundy with Jeffrey. You may now go ahead.

Our next question comes from Kevin Grundy with Jefferies. You May now go ahead.

Great. Thanks, good morning, everyone.

Speaker 9: Great. Thanks. Morning, everyone. A couple of questions on the guidance, one near term, one longer term. Just on the input cost, maybe just comment on some of your key assumptions for some of your larger exposures. Are you embedding any moderation? Are you holding current spot rates flat? How much are you hedged? Because, John , as you mentioned, you've seen a number of your input costs move higher, I think sharply higher in the case of lithium. So maybe you could just comment on that. And then, as a consequence of the 50 basis point additional drag you're anticipating on gross margin and some of the timing mismatch, is it fair to say that you are a lower point in your guidance than you were previously? Are you thinking more lower end? Are you thinking more midpoint, et cetera? I think that would be helpful for folks. And then I'll just squeeze in one last one now. Just longer term, the ambition is, and I know you guys are very focused on gross margin recovery.

Couple of questions on the guidance, one near term one longer term.

On the input cost maybe just comment on some of your key and key assumptions for some of your larger exposures are you embedding any moderation or you're holding current spot rates flat how much are you hedged.

Because John as you mentioned, you've seen a number of your input costs move higher I think sharply higher in the case of lithium. So maybe you could just comment on that and then.

As a consequence of the 50 basis point additional drag youre anticipating on gross margin and some of the timing mismatch is it fair to say that you are a lower point in your guidance than you were previously.

Are you thinking more lower end are you thinking more mid point et cetera, I think that'll be helpful for folks and then I'll just squeeze in one last one now just just longer term. The ambition is and I know you guys are very focused on gross margin recovery.

Speaker 9: To your best estimate today, what does that path look like to get back to mid-20% EBITDA margins? Is it three years? Do you think it's closer to five years? And I know there's a tremendous amount of uncertainty, but just in terms of your current planning, there's a lot of focus from a Wall Street perspective, obviously, just on the cadence to getting back to normalized margins. So thank you for all that.

To your best estimate today, what does that path look like to get back to mid 20% EBITDA margins is it.

Three years do you think it's closer to five years and I know, there's a tremendous amount of uncertainty, but just in terms of your current planning. There is a lot of focus from a wall Street perspective, obviously, just on the cadence to getting back to normalized margins. So thank you for all that.

Thanks, a lot in there Jon why don't you take the inflation.

Speaker 3: That's a lot in there. John , why don't you take the inflation assumption? Right, Kevin. So a couple things I'd say, as far as our modeling and the outlook, we are marking the market and holding spot as we go forward. So there's no expected improvement in there. We also aren't projecting anything getting worse. So similar to what we did last quarter, that's what we're doing go forward.

Alright, Kevin So a couple of things I'd say.

As far as our modeling in the outlook, we are marking to market and holding spot as we go forward. So there's no expected improvement and there. We also arent projecting anything getting worse. So similar to what we did last quarter Thats what were doing go forward.

Speaker 3: As far as fixing things up, we've got about 25 to 30 percent of our costs fixed for the remainder of the year. The only additional color I'd give on that is the ability to go longer term with a lot of our vendors has become more difficult in this environment. So, you know, we're doing everything we can to fix that out.

As far as fixing things that we've got about 25% to 30% of our cost fix for the remainder of the year.

Additional color I'd give on that is the ability to go longer term with a lot of our vendors has become more difficult in this environment. So we're doing everything we can to fix that up but.

Speaker 3: But we probably won't be able to push things out as far as we may have done historically.

But we probably won't be able to push things out as far as we may have done historically.

Speaker 6: Um, on the, on the overall recovery, Kevin, I mean, rather than speak to specific timeframes or specific milestones, which I'm sure you can appreciate difficult to pin down in this environment. You know, I think what the way we've laid it out today is. The price increases in the cost production activities. Make a dollar hole from a gross margin.

On the on the overall recovery, Kevin I mean, rather than speak to specific timeframes are specific milestones, which I'm sure. You can appreciate it's difficult to pin down in this environment.

I think with the way we've laid it out today is the.

The price increases in the cost reduction activities make us dollar whole from a gross margin standpoint for the balance of this fiscal year, we need to continue to execute pricing. We also need to continue to engage in the productivity programs that we have.

Speaker 6: For the balance of this fiscal year, we need to continue to execute pricing. We also need to continue to engage in the productivity programs that we've that you've heard a lot from us in the past. We have an ongoing pipeline of initiatives.

You've heard a lot from us in the past we have an ongoing pipeline of initiatives given the environment, we've pulled together and integrated cross functional team, which is focused on driving gross margin improvement. This is this is not a separate program. This is within the ordinary course of the business, but we're really looking at short medium and long term initiatives as you look across.

Speaker 6: Given the environment, we pulled together an integrated cross functional team, which is focused on driving gross margin improvement. This is this is not a separate program. This is.

Speaker 6: within the ordinary course of the business. But we're really looking at short, medium, and long-term initiatives as you look across. On the short-term side of things, it's mixed management, it's pricing.

On the short term side of things, it's mixed management pricing and revenue management its cost reduction.

Speaker 6: and revenue management, it's cost reduction, it's opportunities and skew optimization. And then on the other end of that spectrum, you know, network opportunities, automation opportunities, can we continue to lean in with other suppliers?

Opportunities and SKU optimization, and then on the other end of that spectrum network opportunities automation opportunities can we continue to lean in with other suppliers.

Speaker 6: All that's going to be connected to our digital transformation efforts, which is an effort to improve the insight. The availability of data and insight, which is going to allow us to make better business decisions on all of those different.

All of that is going to be connected to our digital transformation efforts, which is an effort to improve the insight.

The availability of data and insight, which is going to allow us to make better business decisions on all of those different components. So from that perspective, we're going to execute that while we're executing pricing and continue to manage through that and get the gross margin and ultimately the the margin structure of that business back to where we think it should be in terms of putting down a specific timeframe I think theres too many varied.

Speaker 6: So, from that perspective, we're going to execute that while we're executing pricing and continue to manage through that and get the gross margin and ultimately the margin structure of this business back to where we think it should be. In terms of pinning down a specific timeframe, I think there's too many variables outside of our control for us to be able to do that with any degree of precision at right now.

Outside of our control for us to be able to do that with any degree of precision.

Right now.

Very good. Thank you guys. Good luck.

Thanks, Kevin.

Our next question comes from Robert Goldenstein with Evercore you May now go ahead.

Speaker 1: Our next question comes from Robert Otenstein with Evercore. You may now go ahead.

Great. Thank you very much.

Speaker 10: Great, thank you very much. You talked about, you know, in a fair amount of detail, the timing of some of the price increases, and, you know, I think we all understand it's a very fluid environment, early days on some of those increases.

You talked about a fair amount of detail the timing of some of the price increases.

I think we all understand it's a very fluid environment.

Early days on some of those increases.

Speaker 10: I was just wondering if you had started to see any kind of sense of consumer response

Just was wondering if you.

You had started to see any kind of sense of consumer response.

Speaker 10: whether it is, you know, going from one channel to another, or different pack sizes. And you also mentioned, I think, in your opening statement that, you know, you were now discussing in terms of the markets, both brick and mortar and e-commerce. So, perhaps you could give us an update on what your e-commerce business is looking like, you know, the growth there, the percent of sales, and whether you're still category agnostic. Thank you.

Whether it is going from one channel to another or a different pack sizes.

And you also mentioned I think in the in your opening statement you were now discussing in terms of the markets.

Both brick and mortar and E. Commerce, So perhaps you could give us an update on what your E. Commerce business is looking like.

The growth there as a percent of sales and whether youre still category agnostic. Thank you.

Speaker 6: I can answer the last question first, Robert. I think we are still channel agnostic as consumers migrate brick and mortar to online.

I can answer the last question first Robert I think we are still channel agnostic as consumers migrate brick and mortar to online.

Speaker 6: And I would say, I mean, your first part of the question was.

I would say.

For your first part of the question was was a good one and a general one around the state of the consumer and what's happening is some of these prices are increasing both on our products, but also across the store and what we've seen is our brands have really been resilient and have been able to carry the additional pricing quite well consumers have been resilient.

Speaker 6: was a good one and a general one around the state of the consumer and what's happening at some of these prices.

Speaker 6: Are increasing both on our products, but also across the store.

Speaker 3: You know, what we've seen is our brands have really been resilient and have been able to carry.

Speaker 6: the additional pricing quite well. Consumers have been resilient with the price increases that we executed last year over the holiday season.

With the price increases that we executed last year over the holiday season.

Speaker 6: Um, we assumed historical elasticities would hold and, and they held up much better than we anticipated. And, you know, that's both.

We assumed historical elasticities would hold.

And they held up much better than we anticipated.

<unk>.

Speaker 6: Due to the strength of the consumer, but frankly, also the strength of our brands and the execution by our teams in the marketplace. As we've launched these additional price increases. We are assuming historical elasticities also will hold going forward. We did not assume that the elasticity that we thought holiday would continue. But I would say, when you look at the underlying drivers of the category.

Due to the strength of the consumer, but frankly also the strength of our brands and the execution by our teams in the marketplace.

As we've launched these additional price increases.

We are assuming historical elasticity is also will hold going forward, we did not assume that the elasticity that we saw in holiday would continue.

But I would say when you look at the underlying drivers of the category.

For both auto care, and we talked a little bit about that with <unk>, but I'll, let let's touch on batteries for a minute I mean batteries are driven by devices disasters and demographic, but really a focus on devices and from that perspective and in devices may be a bit of an antiquated word you use I mean, what this is about for consumers right now.

Speaker 6: For both auto care, and we talked a little bit about that with with Wendy, but let's, let's touch on batteries for a minute. I mean, batteries are driven by devices, disasters and demographics. Really focus on devices and. From that perspective, and devices may be a bit of an antiquated word to use. I mean, what this is about for consumers right now is. Connected homes, connected health, connected work. All of these tools that they use to stay connected throughout all parts of their lives.

<unk> homes connected health connected work all of these tools that they use to stay connected throughout all parts of their lives.

Many of them take our batteries and as a result, youre seeing a battery category that is healthier than it has been in years you are certainly coming out of the other end of this pandemic in a healthier spot than you did going into it.

<unk> seen devices in the home go up about seven 5% over the last two years. So when you look at the battery category.

Speaker 6: in the home go up about 7.5% over the last two years. So when you look at the battery category and the auto care category, our consumers are healthy, our brands are strong.

The auto care category, our consumers are healthier brands are strong and the underlying drivers for category demand is better than it's been in several years I think the underlying health of both of our businesses. This tremendous it's just simply a question right now executing pricing managing cost reduction opportunities within your business and driving gross margin improvement.

Speaker 6: And the underlying drivers for category demand is better than it's been in several years. I think the underlying health of both of our businesses is tremendous. It's just simply a question right now of executing pricing, managing cost reduction opportunities within your business, and driving gross margin improvement.

Great and can you break out what percentage of your U S businesses E Commerce.

Speaker 10: Great. And can you break out what percentage of your U.S. business is e-commerce?

We have not broken that out specifically I will tell you. If you look at the battery category.

Speaker 6: We have not broken that out specifically. I will tell you, if you look at the battery category across all of e-commerce, again, not just Amazon, you're looking at about 17 percent of the category goes through online.

Across all of E Commerce again, not just Amazon Youre looking at about 17% of the category goes through online.

Great. Thank you very much.

Our next question comes from Bill Chappell with Tour Securities You May now go ahead.

Speaker 1: Our next question comes from Bill Chappell with Tourist Securities. You may now go ahead.

Thanks, Good morning.

Okay.

Speaker 6: Can you talk a little bit just about the trends at Rayovac and kind of what that says in terms of elasticity, in terms of retailers' willingness to have more price points or better price points, if you've got any distribution gains there, and anything, you know, that maybe kind of helps us understand how that franchise is progressing?

Can you talk a little bit just about the trends that rayovac and kind of what that does in terms of elasticity in terms of.

Retailers willingness to have more price points or better price points, you got any distribution gains.

They're in anything.

Maybe if it helps us understand how that franchise is progressing.

That's been a tremendously.

Speaker 6: That's been a tremendous addition to our portfolio, Bill. I think it's particularly as you head into environments like we're in right now, having that strong value brand in the portfolio just add a level of defense to your portfolio that we didn't have before in the US.

Addition to our portfolio of Bill I think it, particularly as you head into environment like we're in right now having that strong value brand in the portfolio just adds a level of defense.

To your portfolio that we didn't have before in the U S. Rayovac distribution in the U S is a little bit limited in terms of.

Speaker 6: Ravec distribution in the U.S. is a little bit limited in terms of one large mass customer and then the main customers being at home center. But that brand plays a very key role in their offering to their shoppers.

One large mass customer and then Maine Dominion customers being at home Center.

That brand plays a very key role in their offering to their shoppers.

Speaker 6: You know, I think our emphasis as a selling organization, as a company, is always going to be on the Energizer brand, but not to the detriment of Rayovac. We just want to make sure that we use Rayovac in the value offering space and where we can trade those consumers up to Energizer.

I think our emphasis.

As a selling organization as a company is always going to be on the energizer brand, but not not to the detriment of rayovac, we just want to make sure that we use rayovac and the value offerings space and.

And where we can trade those consumers up to energizer, but it will be.

Speaker 6: But it will be a, it will be a very important tool to us as we move forward. The distribution gains on that should not, I don't think I would expect seismic distribution shifts from a RAYVAC standpoint. I think we're going to continue to use it as a tool that we have in the portfolio to fill a need with specific. With specific.

It will be a very important tool to us as we move forward the distribution gains on that should not I don't think I would expect seismic distribution shifts from rayovac standpoint, I think we're going to continue to use it as a tool that we have in the portfolio to fill the need with specific.

With specific customers.

Okay.

Speaker 6: Thanks. I guess I'm trying to figure out what we've seen in other CPG over the past year is kind of a trade-up to more premium stuff away from value. And I guess it's too early for the consumers to trade back, but I didn't know if you've seen that. It's tougher to track the DIY channel for us. And so it may have actually seen a similar type of growth that the Energizer brand is, or if that started to turn or started to get worse or better, anything that would tell us.

Thanks, and I guess I'm trying to figure out what we've seen in other CPG ever over the past year is kind of a trade up to more premium stuff away from value and I guess, it's too early for the consumers to trade back, but I didnt have you seen that.

Cover detract.

DIY channel.

Until.

We are exiting the similar type growth that the Energizer brand is or if that started to turn a started getting worse or better or anything that would tell us.

Yes, I think as pricing is moving as dynamically as the market. We do watch this very very carefully what you saw for the bulk of the last couple of years as consumers are trading up to more premium brands.

Speaker 6: Yeah, I think as pricing is moving as dynamically as in the market, we do watch this very carefully. What you saw for the bulk of the last couple of years is consumers were trading up more premium.

Speaker 6: What you started to see as price points are moving is there is some in certain retailers where the shoppers tend to be more price sensitive than others, you will see a trade down into Rayovac and other value brands. Sometimes, you know, that's a very temporary move for consumers and then they will ultimately migrate back up to the premium end. It's something we're going to watch. We're going to watch both as it impacts our Energizer business, but it also opens the door for greater opportunities for Rayovac in the future as well.

Which you started to see those price points are moving is there are there is some in certain retailers, where the shoppers tend to be more price sensitive than others, you will see a trade down into rayovac and other value brands.

Times.

Very temporary.

Thats, a very temporary move for consumers and then they will ultimately migrate back up to the premium and it's something we're going to watch.

Going to watch both as it impacts our energizer business, but it also opens the door for greater opportunities for rayovac in the future as well.

Got it and one last follow up.

Speaker 3: Got it. One last follow-up. You made the comment that you feel like the battery category is bigger post-pandemic, you know, and you'll grow off of that new base. Can you just give us some examples of what that means? I mean, why people don't, as they go back to work and fully back to school and fully back to normal, you know, don't use some of those battery-powered devices less and receive some contraction?

Just you made the comment that you feel like the battery category bigger post pandemic.

And in <unk>.

We'll grow off of that new base can you just give us some examples of what that means I mean why.

People don't as they go back to work and fully back to school and fully back to normal.

Don't use some of those battery powered devices less and we see some contraction.

Well I think what we've said is you've got to work through the elevated demand that you saw during the pandemic and get to that new baseline level and what we talked about in November as Q1, and Q2 being the elevated comp with Q3 and Q4 being the more normalized level of demand I think that outlook provided that stair step bill into law.

Speaker 6: Well, I think what we've said is you've got to work through the elevated demand that you saw during the pandemic and get to that new baseline level. And what we. Talked about in November is Q1 and Q2 being the elevated comps. With Q3 and Q4 being the more normalized level of demand. I think that. Outlook provided that stair step bill into what we would do is more normalized usage patterns as people get back into. Whatever the routine is that they're going to have post pandemic.

What we would view as more normalized usage patterns as people get back into whatever the routine is that theyre going to have post pandemic, but in the course of the pandemic consumers bought more and more devices I used the number earlier, but seven 5% more devices in the home and.

Speaker 6: But in the course of the pandemic, consumers bought more and more devices. I used the number earlier, but 7.5 percent more devices in the home in 21 than there were in 19. So there's a larger installed base in homes in the US and around the world. So the inventory of batteries that consumers need is larger than it was pre-pandemic. So I think the battery category will continue to grow off that newly installed base.

In 'twenty one than there were in 19, so theres a larger installed base in homes in.

In the U S and around the world.

The inventory of batteries that consumers need is larger than it was pre pandemic. So I think it is.

The battery category will continue to grow offset newly installed base.

In terms of usage, that's really what's going to drive in terms of the growth rate and I think we said in the past it is definitely a larger category and it's going to grow.

Speaker 6: In terms of usage, that's really what's going to drive in terms of the growth rate. And I think we've said in the past, it is definitely a larger category, and it's going to grow in accordance with historical growth rates off that larger base. In terms of a higher growth rate, I think that's when we're going to have to watch consumer usage of those devices, because if that starts to escalate, then I think that could move the growth rate of the battery category.

In accordance with historical growth rates off that larger base in terms of a higher growth rate I think that's when we're going to have to watch consumer usage of those devices, because if that starts to escalate and I think that could move the growth rate of aesthetics battery category.

Got it thanks, so much for the color.

Thanks Bill.

Speaker 1: Our next question comes from Jason English with Goldman Sachs. You may now go ahead.

Our next question comes from Jason English with Goldman Sachs.

You May now go ahead.

Hey, good morning folks thanks for Slotting me.

Speaker 6: Hey, good morning, folks. Thanks for spotting me in. A couple of quick questions. So first, a lot of focus on your pathway to recovering gross margins to what you think it should be. What do you think?

Couple of quick questions.

So first a lot of focus on your pathway to recovering gross margins to what you think it should be.

What do you think it should be.

[laughter].

It should be higher than it is right now Jason I think what we're trying to do right now.

Speaker 6: It should be higher than it is right now, Jason. I think what we're trying to do right now is we are trying to offset the inflationary pressures on a dollar basis first. And let's get those price increases in the marketplace, let's get them executed, let's restore that element of stability in the P&L. From that point forward, we've got a number of internal initiatives, productivity initiatives to try and drive gross margin improvement. And then also, I would say the...

We are trying to offset the inflationary pressures on a dollar basis first and let's get those price increases in the marketplace, let's get them executed, let's restore that element of stability in the P&L from that point forward. We've got a number of internal initiatives productivity initiatives to try and drive gross margin improvement and then also I will.

Say the.

Speaker 6: The macro backdrop has to stabilize and start to reverse course in terms of some of this input cost inflation. And then, I think, as you get to the back half of this year, as John talked about in his prepared remarks, you're going to see gross margin improvement. In the 2nd, half of 22. But I don't want to get too ahead of ourselves and start providing 23 color this. You know, as far away from it.

The macro backdrop has to stabilize and start to reverse course in terms of some of this input cost inflation.

And then I think as you get to the back half of this year as John talked about in his prepared remarks, youre going to see gross margin improvement.

In the second half of 'twenty two.

But I don't want to get too ahead of ourselves and start providing 23 color.

<unk>.

As far away from it.

Speaker 6: For sure. I'm not trying to lock you down to that either. To help us understand the bridges, we're through the bulk of synergy related to the acquisitions, your prior acquisitions. John , what's the right level of productivity to think about as we contemplate these COGS bridges and gross margin bridges?

Oh for sure I'm not sure on Lucky downside either.

Help us understand the bridge as it worked through the bulk of the synergies related to the acquisition prior acquisitions, John what's the right level of productivity to think about as we as we contemplate these cogs bridges in gross margin for just last few years.

Yeah as Mark said, we've got a number of programs in place I think we're going to look at.

Speaker 3: Yeah, as Mark said, we've got a number of programs in place. I think we're going to look not only at pricing like we have, we're digging into the cost side of it. I mean, we want to go after realistically, one to 200 basis points a year is what we probably need to go after. But as Mark said, it's a very volatile fluid environment. So we're trying to figure out the best.

Not only is pricing like we have we're digging into the cost side of it I mean.

We want to go after.

Realistically.

One to 200 basis points of years, but we probably need to go after.

As Mark said, it's a very volatile fluid environment. So we're trying to figure out the best way to go after that.

Sure one to 200 bps should be certainly better than what we're expecting.

Speaker 11: short, one to 200 bits would be certainly better than what we're expecting. Last question, the cost pressures, you highlighted the internal cost just to get things across the pond here. I've got to believe...

Last question.

Cost pressures you highlighted like the incremental cost savings across the pond.

I've got to believe that this is creating substantial.

Speaker 11: creating a substantial amount more stress and turbulence in a private label model, particularly given so many of the private label products sold in the U.S. in the battery category are brought from overseas.

A substantial amount more stress and turbulence in a private label model.

Particularly given that so many of the products sold in the US in the battery category are brought for overseas.

Why are we not seeing more price momentum building in our private label do you think it's just a matter of time what is your end market Intel telling you on that Brian .

Speaker 11: Why are we not seeing more price momentum building on private labels? Do you think it's just a matter of time? You know, what is your in-market intel telling you on that?

Speaker 6: We have we've started to see price private label pricing move. I mean, because private label is going to be at the discretion, you know, as all pricing is with the retailers. I think it's up to them to set their pricing parameters. Yeah, I, I would expect them as you said that they're experiencing the same inflationary pressures that that that we are. And as a result, I would. I would expect that pricing to move in tandem with with branded. Competition at some point over the next quarter or 2.

We've started to see price private label pricing move.

Because private label is going to be at the discretion as all pricing is with the retailers I think it's up to them to set their pricing parameters.

Yes, I would expect them as you have said that they are experiencing the same inflationary pressures that debt that we are in as a result, I would I would expect that pricing to move in.

Condom with with branded <unk>.

Competition at some point over the next quarter or two.

Okay.

Thanks, a lot guys I'll pass it on.

Our next question comes from William Reuter with Bank of America, You May now go ahead.

Speaker 1: Our next question comes from William Buder with Bank of America. You may now go ahead.

Good morning.

Speaker 12: So, with regard to the most recent price increases that you've pushed through in the battery category in the U.S., it sounds like from the fact that you expect that there's going to be some distribution gains this spring that there weren't many customers that pushed back and are either going to reduce allocation or reallocate any sort of their shelf space. Do you think that that's the case?

So with regard to the most recent price increases.

Pushed through in the battery category in the U S. It sounds like from the fact that you expect that theres going to be some distribution gains spring that there.

There arent many customers have pushed back and are either kind of reduced allocation or reallocate any sort of their shelf.

<unk> shelf space do you think that that's the case.

Speaker 6: I don't want to front run our discussions with customers at the moment. We're in the middle of executing these price increases, you know, the latest round with both battery and auto care, and I'll let those conversations.

I don't want to front run our discussions with customers at the moment, we're in the middle of executing these price increases the latest round with both battery and auto care and I'll, let those conversations progressed as they normally would I think there is a recognition by our retail partners of the environment that we're operating in.

Speaker 6: Progress as they normally would, I think there is a recognition. By our retail partners of the environment that we're operating in. I would say, you know, we will, we know how we know the different. Procedures that they all have in order to execute price increases. We, you know, it's a fact based discussion and we're going to. We're going to make sure we execute that and get that across the line. You know, retailers.

I'd say, we will we know how we know the different procedures that they all have in order to execute price increases.

It's a fact based discussion and we're going to we're going to make sure we execute that and get that across the line.

Retailers.

Speaker 6: have different cadences in terms of their line reviews, and we'll go through those as appropriate and make sure that we update all of the outlook. The outlook that we've provided contemplates all of the distribution and puts and takes that we're aware of.

Have different cadences in terms of their their line reviews.

We'll go through those.

As appropriate and make sure that we update all of the outlook. The outlook that we've provided contemplates all of the distribution puts and takes that we're aware of at the moment.

Got it yes, I didn't mean to put words in your mouth, there, but the helpful commentary and then.

Speaker 12: Got it. Yeah, I didn't mean to put words in your mouth there, but the helpful commentary. And then it sounds like from the tone of the comments you've made about M&A as well as debt reduction that the focus is shifting more towards debt reduction and getting leverage down. I don't think you guys have a firm or stated leverage target either long term or in the near term. Is that still the case or are you guys going to be implementing something like that?

It sounds like from the tone of the comments, you've made about M&A as well as debt reduction.

<unk> focus is.

Shifting more towards.

Debt reduction and getting leverage down.

I don't think you guys have a firm our stated leverage target either long term or in the near term is that still the case or are you guys going to be implementing something like that.

Yes, but we don't we don't have a stated target I mean, the one thing I'd say about Leverages as I mentioned, a little bit earlier, we're carrying about a half a turn incremental for the working capital investments that we've made and what we're really focused on right now is making sure that we've got liquidity. So we've got very minimal near term maturities.

Speaker 3: Yeah, but we don't we don't have a stated target. I mean, the one thing I'd say about leverage is, as I mentioned a little bit earlier, we're carrying about a half a turn incremental for the working capital investments that we've made. And what we're really focused on right now is making sure that we've got liquidity. So, you know, we've got very minimal near term maturities. We've got our debt fixed up at below four percent. We did just increase the revolver and added one hundred million dollars. So we feel like liquidity is in really good shape and we'll continue to manage that balance down as we go forward.

We've got our debt fixed up at below 4%. We did just increase the revolver and added $100 million. So we feel like liquidity isn't really good shape and we'll continue to manage that debt balance down as we go forward.

Makes sense, all right I'll pass to others. Thank you.

Okay.

Our next question comes from Mike <unk> with Jpmorgan you May now go ahead.

Speaker 1: Our next question comes from Mike Coppola with J.P. Morgan. You may now go ahead.

Speaker 5: Hey, good morning and thanks for taking our question. Just one of the ones we wanted to ask about was the battery segment. You know, it was a little better than we'd expected. We're just kind of curious if you guys could talk about how much of that was driven by shelf space gains or any other factors like seasonal promotions and restocking. Any call there would be much appreciated. Thank you.

Hey, good morning, and thanks for taking our question just warmer ones. We wanted to ask about was.

The battery segment.

Although better than we'd expected. We're just kind of curious if you guys could talk about how much of that was driven by shelf space gains or any other factors like seasonal promotions and restocking.

There'll be much appreciate it thank you.

Speaker 3: Look, I would say as far as the quarter performing well, I think two things. Pricing did start to come in in the category, which was good. And then the other thing is we had anticipated very tough comps from 21. We had grown over 10% in the first quarter last year. And so I think as we came through and we took the pricing, we actually did outperform some of those expectations.

And look I would say as far as the quarter performing well I think two things we pricing did start to come in in the category, which was good and then the other thing is even we had anticipated.

Tough comps from 'twenty, one we had grown over 10% in the first quarter last year and so I think as we came through and we took the pricing we actually did outperform some of those expectations.

Speaker 6: And the numbers that we talked through on the call from a category standpoint, you know, for the three months ending November , you missed the December part of the selling season, but on a two-year basis, volume was up about 7.8% and value in the category was up 9.7%.

And the numbers that we talked through on the call from a category standpoint for the three months ending November two.

You missed the December part of the selling season, but on a two year basis volume was up.

About seven 8% in value in the category was up nine 7%.

Speaker 6: So the category over a two-year basis is really trending in a healthy direction.

The category over a two year basis.

Really.

Trending in a healthy direction.

Yeah.

Yeah.

Great. Thank you that's all from me.

Thanks.

Okay.

Yeah.

This concludes our question and answer session I would like to turn the conference back over to Mark Levine for any closing remarks.

Speaker 1: This concludes our question and answer session. I would like to turn the conference back over to Mark Levine for any closing remarks.

Thanks for joining our call today and the ongoing interest in Energizer hope everyone have a great day.

Speaker 6: Thanks for joining our call today and the ongoing interest in Energizer. Hope everyone has a great day.

The conference has now concluded thank you for attending.

Speaker 1: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Today's presentation you may now disconnect.