Q1 2023 Reynolds Consumer Products Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Reynolds consumer Products' first quarter 2023 earnings call at.
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I'd now like to hand, the conference over to your Speaker today, Mark Schwartz birth.
Thank you. Please go ahead.
Thank you operator, and good morning, everyone and thank you for joining us on Reynolds consumer Products' first quarter 2023 earnings Conference call. Please note that this call is being simultaneously webcast on the Investor Relations section of our corporate website at Reynolds consumer products Dot Com our earnings press release and accompanying presentation slides are also available.
<unk> on the site.
With me on the call today are Lance Mitchell, our President and Chief Executive Officer, and Michael Graham, Our Chief Financial Officer.
For our call Lance will focus his remarks on our first quarter performance progress on the Reynolds cooking and baking recovery plan and what we're doing to drive results across our business.
Michael will review, our first quarter financials, and our outlook for the second quarter and the full year.
Following prepared remarks, we will open the call for questions.
Before we begin I would like to provide a few reminders first this mornings discussion may contain forward looking statements based on current expectations and beliefs.
These statements are subject to risks uncertainties and changes in circumstances that could cause actual results and outcomes to differ materially from those described today. Please.
Please refer to our risk factors section in our SEC filings, including in our annual report on Form 10-K.
And our quarterly report on Form 10-Q.
Please note that the company does not intend to update or alter these forward looking statements to reflect events or circumstances arising after the call.
During today's call, we will refer to certain non-GAAP or adjusted financial measures.
Reconciliations of these GAAP to non-GAAP financial measures are available in our earnings press release Investor presentation deck and Form 10-Q.
Copies of which can be found on the Investor Relations section of our website.
Now I'd like to turn the call over to Lance Mitchell.
Thanks, Mark and good morning, everyone.
I will begin today with comments on our performance and what we are doing to drive stronger results across our business.
Then I will.
Turning the call over to Michael to elaborate on our results and our guide and followed by your questions.
We exited 2022 with strong positions in our categories restore profitability in three of our four business segments and implemented a comprehensive plan for returning Reynolds cooking and baking to historical levels of profitability.
We executed that plan well in the first quarter setting the stage for strong earnings growth for the year.
We stabilized Reynolds cooking and baking operations.
By reducing operational inefficiencies.
And the other three businesses.
The waste storage hefty tableware and Presto continued to operate at restored levels of profitability.
Before I speak to what we're doing to drive improved results across our business I'd like to review Reynolds cooking baking segment more specific Lee from an operational commercial and financial perspective.
Operationally, we met our goals for stability of the quarter as we implemented the measures mentioned in our last earnings call, including cross functional teams focused on critical asset efficiencies.
<unk> technical expertise.
Alongside key production assets and redesign of equipment reliability processes and practices.
We're also standardizing processes across operations in order to further ensure operational stability.
We have now entered the next phase of our recovery plan, which is to rebuild margins driven by moderating material costs and improved operational efficiencies. We're also making continued progress in automation and recently installed our second new Spooling line in our Louisville facility.
Now why would you have hit our goals for the first quarter, we still have work to do to fully restore production efficiencies and our cost position.
Commercially dollar and volume share for Reynolds wrap is growing reflecting strength with millennials and other key demographics.
We're back to on air advertising and lifting trade support for Reynolds wrap this summer, including Memorial day and fourth of July .
And new products, including Reynolds kitchen stay flat partial paper and Reynolds kitchens Air Fryer liners are expanding distribution driven by strong consumer trial and adoption.
Financially.
<unk> are in line with our expectations for the quarter driven by Reynolds wrap share gains.
And we are on track to attain our quarterly earnings targets and a return to profit consistent with historical levels in the second half of 2023.
Reynolds cooking and baking is delivering against the plan we established at the start of the year and we're confident we will achieve the plan this year.
So now let me turn to what we're doing to drive continued momentum across our entire business.
As you know.
Many consumer staples brands benefited from the pandemic.
We participated in that trend and we have gained additional branch here in 2023 as well.
I mentioned, the improving share trends for Reynolds hefty share of waste bags also grow in the quarter and in recent weeks <unk> has also delivered a solid gain in food bags share driven by innovation.
I attribute much of our company's strength through our integrated brand and store brand model together with our role as a category adviser to the vast majority of our customer base.
Syndicated data makes it difficult.
Externally to see how we're doing on our combined brand and store brand basis, but I can tell you. We're pleased with our category share trends as well as our performance within the store brands for example.
Store brand share of food bags is growing and our share of that segment is also growing.
Investment and innovation are driving strength and we plan for that to continue.
We've increased trade investment consistent with our plan and the results are achieved our expectations.
<unk> is driving volume and share and we will continue to execute our plan to continue promotions around holidays and retailer key events.
We're advertising at pre pandemic historical levels, which represents a higher investments in prior years.
Advertising spend was up in the first quarter versus a year ago. We plan for increased advertising on top of last year's increase versus 2021 levels.
This is expected to translate not only into additional awareness as I mentioned Reynolds wrap returned to air advertising.
But also increases in household penetration.
And new products, we are strengthening our market position by elevating and expanding our categories, while bringing value to consumers through sustainable solutions.
Our hefty fabulous of waste bags continued to demonstrate momentum driven by expanding distribution for fabulous, so lavender and strong retailer adoption of the new <unk> so with lemon.
At the energy bag, our partnership program for recycling and hard to recycle plastics continues to perform well is being rebranded as hefty renew.
Other sustainable solutions, including hefty and store branded waste bags made with 20% post consumer recycled materials and Reynolds kitchens Air Fryer liners made with composed of all unbleached paper are performing well.
Our new product pipeline is very strong.
So look for more on that whenever you and your families are shopping in our future earnings calls.
Our integrated brand and store brand model is a competitive advantage and I am pleased how our portfolio is performing at retail.
But consumers are under pressure and were watching volumes more closely than ever before for impacts from price elasticity and changes in consumer behavior.
We believe our relentless focus on profitability puts us on track for strong earnings growth and financial performance in 2023.
With that over to you Michael Thanks, Lance and good morning, everyone. Our first quarter results were consistent with our expectations and provide us with a foundation for strong earnings growth and cash flow. This year net revenues increased 3% versus the prior year as the price increases implemented last year more than offset.
A 2% volume decline net income and adjusted EBITDA declined versus the prior year as the anticipated increases in material and manufacturing costs in the Reynolds cooking and baking business as well as higher personnel costs professional fees and advertising costs were partially offset by increased profitability in the rest of.
Of our businesses.
In addition, net income was negatively impacted by higher interest costs due to increased interest rates.
We drove an improvement in cash flow compared to the first quarter of prior year in spite of the anticipated earnings decline.
Working capital initiatives contributed to an improvement in cash conversion.
And we remain disciplined with our capital spending including strategic investments in Reynolds cooking baking operations consistent with the plans for the year.
For the full year of 2023, we are reiterating our previously provided guidance metrics, we expect net revenues to be flat plus or minus 1% with pricing flat to slightly up compared to net revenues of $3 $8 billion in 2022.
Adjusted EBIT to be in the range of $605 million to $635 million and adjusted EPS to be in the range of $1 30 to $1 41 per share.
Our key assumptions that underpin. This guy include continued execution of the Reynolds cooking and baking a recovery plan.
Which is land said is off to a strong start and further solid performance for hefty waste storage ft, tableware and Presto.
Commodity rates are relatively stable versus the end of April levels.
<unk> prices are certainly more stable than they have been but the environment remains dynamic including two polyethylene.
Price increases in the first quarter.
Another year of approximately 200 basis points of incremental margin from resolution cost savings, where we continue to use these savings as potential sources of investment in our categories and business.
Gross profit of approximately $920 million at the midpoint of our adjusted EBITDA Guy.
And the same depreciation and amortization interest expense effective tax rate and capital spending estimates that we provided in our last earnings call.
For the second quarter, we expect net revenue growth in the range of flat to 2% on net revenues of $917 million in the prior year, including an approximate 2% increase from price.
Adjusted EBIT to be in the range of $135 million to $145 million up by comparison to the adjusted EBIT of $118 million in the prior year period, and adjusted EPS in the range of 27 to <unk> 30 per share now.
Now I will turn to the phasing and the factors that drive our confidence in earnings growth in the second quarter and for the year. We are pleased with the progress we are making in Reynolds cooking baking and are on track to achieve our quarterly margin targets in this business hefty waste and storage hefty tableware and Presto are operating at historic levels.
Profitability level.
The level of pricing and margin already achieved in these businesses translates into restored margin in 2023.
We have the retail momentum that Lance discussed and are investing to build on that including increases in spending and trade and advertising.
Operational inefficiencies and carryover of the higher cost of alumina are expected to remain a headwind and Reynolds cooking and baking in the second quarter, but to a lesser extent than the first quarter.
These headwinds are also expected to moderate during the quarter.
Shifting to our confidence in a return to earnings consistent with historical levels for this business in the second half of the year.
In terms of cash flows and capital allocation as mentioned cash conversion improved in the first quarter versus the same period last year multi.
Multiple initiatives are in flight to drive further working capital improvements we plan to remain disciplined in the area of capital spending as well.
Together with the anticipated earnings growth, we expect these measures to enable us to pay down additional debt this year.
And our capital allocation priorities are unchanged with that I'll hand, the call back over to you Lance.
Thanks, Michael.
Before we turn the call over to your questions. I know you would like to get an update on our CFO search following Michael's decision to retire.
Following the release of earnings for the fiscal year.
Our search for Michaels replacement is going well and I'm confident in a smooth transition.
We are looking at strong internal and external candidates and we expect to announce Michaels replacement before reporting fourth quarter results for the fiscal year.
We plan for an appropriate period of overlap between the new Cso's assumption of the role and Michael's departure for RCP.
Since we have nothing further to add on the CFO transition at this time.
Lease hold off any questions on this topic.
And with that operator, let's go to our first question.
Thank you.
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So the first.
Questions from as many participants as possible. We ask you. Please limit yourself to one question and one follow up.
Please poll for questions. Thank you.
Our first question is from the line of Nik Modi with RBC capital markets. Please proceed with your question.
Yes, good morning, everyone. Thanks for the question.
And Michael Best of luck in your future endeavors.
Okay. I was hoping you guys can just talk about critical price thresholds I mean, obviously oil you have to deal with some issues a year ago last year late late last year and I'm. Just curious as you look across the rest of the portfolio do you feel like.
Pricing isn't the right place.
Or given some of what we call the.
Part of my French, but the piss off point, where consumers really start.
Exiting categories are buying less of the category of a certain price threshold was cross any thoughts around that.
Seeing any consumer behavior changes in terms of people using more reusable containers to store their food.
And Nick overall, we're pretty happy with our price gaps thickness settle out where we expected and we're pleased with the gaps we continue to monitor and manage our categories are pricing and trade as necessary.
But for.
All of our categories, we're pretty pleased with where they are.
They're currently at.
Our volume is doing well across most of our categories customers are core is feeling the pinch and seeing.
Seeing alternatives to offset.
Some prolonged.
Inflationary prices, but overall, our categories are performing well and our shares are performing well across our categories.
Great and any thoughts on just the consumer behavioral changes I think what youre seeing in terms of renewables and things like that.
Essentially we're seeing.
We're seeing continued use of our household staple products and we're seeing share growth across most of our categories. In fact, the only two areas, where we are not gaining share.
And party Cups, and parchment, and we are addressing those specifically, but all the rest of our our brands and our categories are growing and we're gaining share.
Great. Thank you I'll pass it on.
Our next question is from the line of Rob Hottenstein with Evercore ISI. Please proceed with your question.
Great. Thank you very much couple of questions here first.
Looking at the Q2 guidance.
It looks like Youre, suggesting volumes could be.
I guess flat to maybe down a couple percent versus 22.
Is that right and then I think more importantly can you give us a sense of where volumes are where the businesses compete.
Compared to 2019, so we can get into SaaS of what's happened kind of changed over over the last few years.
And what would explain any particular changes and then I'll have a follow up thank you.
Alright.
Consumers higher income consumers are purchasing larger sizes, they're concerned more about value per per bag or purse.
Square foot, which is extending the purchase cycle and lower income houses are purchasing smaller sizes are more concerned about specific price points.
Oil consumption is up 3% versus a pandemic.
Household formation increased activity in the home or benefit of consumption Reynolds wrap enter 2023 with higher share than.
It had in 2019, and we gained three share points during the quarter.
Waistband consumption continues to be above prepaid emmick levels, it's up 4% <unk>.
<unk> gained share before the pandemic during the pandemic and continue to gain share of the first quarter.
<unk> is also growing buyers of all generational groups, especially millennials.
And food bags, we estimate foodbank consumption is up slightly in all channels, but its shifted to on track channels.
Driven by both press to close.
Primarily.
Our first quarter trends in food bags were strong hefty sliders began gaining share driven in part by the introduction of the.
A half gallon freezer bag in our private label food bags also gained share during the during the third quarter.
Plastic party Cups also remain above pre pandemic levels they have grown 4%.
I did mentioned a moment ago that our branded share has gone down, but we have a very high participation in private label, we're growing very effectively in our private label in this segment.
Disposable dish consumption is up slightly to pre pandemic levels and our share of hefty dishes up versus pre pandemic levels.
And partially consumptions, probably the strongest of all its up 43% versus pre pandemic levels driven by the increase of baking among young adults and consumer behavior and we have a large share of this category and we're introducing some new products specifically the Reynolds stay flat parts, but.
Okay.
So just I mean, if we just look at bags would.
Would you say your volumes.
Are kind of running out.
2% to 4% over 2019 levels are up.
The category is up 4% and our shares up versus 2009, okay. So youre up more like 5% time.
Okay.
High single digits, yes.
Nice very nice.
Great and then as you given right these share gains that you've you've executed.
And then one.
Can you talk a little bit about the.
The competitive intensity in the market.
And if youre seeing you know more.
More of a promotional stance from your competition or are they trying to win through through innovation and marketing.
I describe the competitive environment right now at this point in time as being rational and all of our categories.
We are seeing some increases in promotional activities across our categories, but we.
We've planned for that as well, we're returning our trade to pre pandemic levels. So thats reflected in our guide and our plan.
Great. Thank you very much.
Thank you as a reminder, if you'd like to ask a question star one from your telephone keypad and please limit yourself to one question and one follow up.
The next question is from the line of Lauren Lieberman with Barclays. Please proceed with your question.
Great. Thanks, good morning.
Wanted to just first ask about the remediation in Reynolds cooking and baking I was just curious.
Very quick progress there obviously.
Just curious about.
To get that done.
<unk>.
Was there sort of excess costs embedded in the P&L. This quarter that you had to incur along that along that process.
And also just anything maybe that was uncovered through that work that may.
Lay groundwork for things to be arguably even better going forward like new efficiencies that you found opportunities within the scope of that work.
Yes, So one thing let me answer it in a couple parts the professional fees.
We are experiencing higher professional fees, and which is flowing through our SG&A and that's part of the reason that youre seeing and slightly higher SG&A.
Increase in overall results.
So that's kind of the the professional fee component of that.
As it relates to and wanted to understand make sure I am clear on the rest of your question though.
Sure. Thanks.
External consultants there is the one that <unk> been working with.
In the work to remediate the issue you run into if you also uncovered any incremental opportunities.
Our efficiency that.
That may build beyond again remediation like taking it a step further.
If there is any sort of incremental findings as you've been working on that.
I would answer that by saying we are exactly on the plan that we had expected when we developed at the beginning of the year.
Those operational cost that Michael just referred to.
In our in our plan and in our guide.
And the Kpis that we establish that we share with the board on a <unk>.
Monthly basis are exactly on plan, so I wouldn't say that there is anything thats.
Potentially above the plan, but we are executing exactly what we'd expected to.
<unk> achieved in Q1 and on track to achieve in Q2.
Okay and Lora.
Mark those professional fees were built into the into the guide we provided for the first quarter and what we actually add in the first quarter.
Okay and for the year.
Okay, Great and I also ask that in the context of adding a lot of other companies would probably exclude those charges.
So.
Yes.
The Genesis of the question so that's great.
Okay and then other thing was just I know aluminum has been really very volatile, but it seems to be pricing is coming down.
You still got high cost of aluminum is flowing through your P&L.
Promotion is backing them.
Actual activity back in the market shares are back up but just curious like when should we start to season that lower cost of aluminum make its way through.
Given your expectations for volume growth and working directly with inventory.
And is there any pressure in the marketplace could take trade promo deeper.
And what you would what.
You have planned just given the spot rate.
Deflation that's out there.
Well, yeah, I'll remind you the aluminum during 2020 was like at 70 cents a pound.
At the end of the year. It was $1 30, it spiked up to $1 40 in Q1 and is back down to a $1 30. So it is more stable than it was but it's stable at a much higher price than it was.
Our retailers have recognized that.
It is a commodity.
They are in line with our our plans for trace and pricing.
And so.
At this point, we're executing exactly what we expected and planned and our retailers are.
In agreement with with our plants.
Okay, alright, great. Thanks, so much.
Thank you.
Our next question is from the line of Mark Astrachan with Stifel. Please proceed with your question.
Hey, good morning, guys.
First first question anything in particular that drove the higher unallocated cost in the quarter can be if you look at the profitability on a segment basis. It was obviously much better offset by that so what was in that and kind.
Kind of how do we think about that going forward.
Yes, let me start I would say.
The costs were in line with our expectation.
Higher cost over prior year to due to higher variable comp and professional fees. The majority of which are in support of the cooking baking recovery that we just talked about and also work known that there are some costs in Q1 2023 that had historically been added back such as D&O insurance, but again these costs were.
<unk> and baked into our overall guide.
Okay.
It does recur in I guess, it's not been that.
Yes that the profitability on a segment basis would be greater because the base is higher.
Is that reasonable.
I'm not I'm not sure I understand can you repeat that.
Yes, I'm, just basically saying like that was a bigger dragging from <unk> on EBITDA right to debate on this segment profitability is higher so if those costs unallocated costs won't recur in the debate on this segments are higher.
Should be pretty flat.
Throughout the throughout the year Mark.
Okay Alright.
Alright.
And I guess, just switching to more of a higher level question.
Any sort of thoughts any any.
To the extent you can.
Relay how your customers are the retailers are thinking about the balance of <unk>.
Private label in your brands as they think about what's potentially a more volatile consumer environment.
How you think about.
Both the pricing and the promotional activity as it relates to those discussions.
Well overall private label share is up in waste bags food bags Party cups in par.
On paper Plaza grab.
And it's down in foil bone doses slow cooker liners and oven bags.
But as I think I indicated in our prepared remarks, our integrated brand store brand model is really a competitive advantage and it positions us to benefit and shifts in either direction.
Our retailers were really rely on us to advise them on the category mix and we've been doing that for years.
So the relative stability that we've seen between brands and store brands.
His sound economically for both consumers and retailers alike.
And that are our category adviser council is reliable.
Private label already represents a sizable portion of our categories consumption in the private label category share has been relatively consistent and stable throughout.
All of these economic cycles, including this one.
And we have a strong share of private label many of our categories, including food bags plastic wrap waste bags film dishes are slow cooker liners.
Yes.
Got it okay. Thanks, if I could just squeeze one more quick one in their pricing flat to up slightly I think I heard for the year. So what does that imply in the back half of the year as pricing come down or is it negative two eight volumes opt into H.
Way to think about it.
Second half down a bit.
And remember we had a higher rate than the floor. We've got some contractual pass throughs that occur.
And our private label business as well as our related party transactions.
Got it thank you.
Yeah.
Our next question is coming from the line of Andrea Teixeira with Jpmorgan. Please proceed with your question.
Good morning, everybody.
Thanks, operator.
Just wanted to check in in terms of how you're tracking on coming back to the pre pandemic margins in Q3, and I know you did speak to that on the last earnings call.
Today, I think last one Michael I think you both kind of alluded that youre on track to that to that comment.
But then knowing knowing what you had said actually abouts and other pass through the last quarter.
Obviously that was on track and that's why we knew would happen.
As you put in the New show guide.
And so the last quarter now you reiterated it.
But <unk> have since changed I'm thinking footprint. So when you think about those margins I think saddle and going back to that hopefully.
High Twenty's and potentially in the fourth quarter is that contemplated including.
The price.
The reduction in pricing from Presto products seem to the fourth quarter.
Or on the private label that you have with <unk>.
A key customer.
Is that included or that's only on apples to apples basis.
Yeah, So let me kind of take that on.
The.
From an overall standpoint, we are quite pleased on how our recovery process is working right. We're on track and we anticipate that consistent with our guide that recovery plan is pretty much right in line with our overall expectations and I think Lance spoke to this earlier so at this point in time really.
There is no additional updates we can provide an overall space goes through tracking in accordance with plan so well.
We are quite pleased with that as it relates to their private label pass through.
That pass through is built into it.
Into our in our Presto business already so Atlanta indicated.
There is some contractual stuff that we already have to give back to our customer base. So that's already baked in.
Mhm and just this is super helpful. Michael just one quick.
Final point on the second quarter, specifically, because I did the math right and with the top line that Youre, saying.
As expected right. This is the first quarter was a tough quarter, where you had the the.
The cooking and baking issues kind of most prohibited and recovery there and then in the second quarter.
You have a very seasonally high.
Number four.
For cleaning and cooking.
And it implies and you guys did that youre tracking actually to do an inflection and we all had it in the second quarter, an inflection I think your margins at least consensus shows that but is it fair to say that the second quarter is probably shaping up better than you than you thought.
No.
I wouldn't draw that conclusion, so I mean, we do and we've shared this before that on a sequential quarter basis, we did expect to see improvements.
As the higher cost aluminum that was flowing through our business would begin to abate.
As well as we start to make progress on our operational efficiencies.
And we're tracking to that so I don't see at this point in time any additional upside.
Hopefully there will be but.
Nothing that we're willing to commit to at this point and Andre I would entirely echo everything Michael just said and add that on a total company basis, you can tell from the second quarter guide that we expect our gross profit dollars and gross margin percentage to be up year on year in the second quarter.
Yeah, Okay, great. Thank you so much again I'll pass it on.
Yes.
Thank you.
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The next question is from the line of Bill Chappell with two of Securities. Please proceed with your question.
Yeah.
Thanks, Good morning.
Just had a couple I guess clarifications over the prior question.
First I guess I didn't fully understand the answer to Lauren's question in terms of pricing promotion I mean, I think you've said that elasticities in aluminum foil Ben.
Higher than you would expected and <unk> had some customers switching and kind of behavioral change to other options. So I would think from a consumer standpoint, you would want to get the prices down where you drive volume as fast as possible let alone what you have planned with the retailers my thinking about that wrong or.
Are you do you believe consumers will eventually adjust.
Well, if you looked at our volume in.
Aluminum foil in Q1, we actually surpassed our expectations.
We've gotten our price gaps to across all of our categories to where we want to have them. So we've got really good price points granted.
There are higher than they were because of inflation, but price gaps across the categories. We've established points, where we're pleased with.
Okay. So if you look at like the elasticity and kind of.
Demand destruction last year, but you.
You just figure consumers will kind of bounce back to that and it will get used to the new prices overtime. Yes. They have look at the look at the growth across our categories and our share growth and you can see that there is strong evidence of that consistent with what we've guided we're promoting at pre pandemic levels and it's been very effective.
Okay.
Moving on to.
Just the comment on margins I, just want to make sure I understand getting back to pre pandemic margins.
Would entail cost coming down.
A price for margin improvement.
You would need some help from the cuttings to get back to that level is that right or have you actually price for margin.
Hey, Bill.
Really since the beginning of the pandemic and the inflation that began with that we've been saying we're about dollar gross profit unit economics in dollar terms not percentage margins. So in three of our businesses were there.
And we're tracking to where we want to be in the Reynolds cooking and baking business. Later this year and as you know we expect approximately $920 million of gross profit. This year at the midpoint of our guide that's approximately four points of margin expansion versus last year.
And in terms of progression through the year. We're on track for dollar gross profit growth in the second quarter.
And that translates into multiple points of expansion in terms of gross profit as a percentage of sales.
Versus 20% in Q2 of last year, and we look for that trend to continue to go forward in Q3 and Q4 as well.
Okay.
Okay. Thanks for the color.
The next question is from the line of Robert <unk> with Evercore ISI. Please proceed with your questions.
Great. Thank you for the follow up so I'd like to kind of shift gears a little bit.
I stand back and think more longer term.
Obviously, a lot of fires to put out over the last two to three years incredibly challenging environment, where you had to think short term in many ways.
Out of necessity.
Lance I would love to get a sense of are you at the point now where you can start spending more time thinking longer term strategically.
And maybe give us a little bit of your thoughts kind of going forward over the next 345 years whatever timeframe you want in terms of the things that your initiatives that you're thinking about.
In terms of driving the value of the business. Thank you.
So you asked a question that the board asked.
Last month and absolutely.
We have been having to really thing short term over the last two years.
And we are in the in the process of developing our long term strategic plan. We obviously had a long term strategic plan on the roadshow, which we shared with everybody.
But the world has changed since then and we're redevelop it and our long term plan.
It is not fully <unk>.
<unk> for Prime time.
I expect us to have an investor day. After we've completed our discussions with the board and they're aligned with our plan. We are sharing that plan with them in July at our board meeting.
So, perhaps third or fourth quarter will have an investor day, we'll be able to go into more detail.
Makes sense. Thank you very much.
Thank you.
As a reminder, if you'd like to ask a question today. Please press star one from your telephone keypad.
Our next question is from the line of Brian Mcnamara with Canaccord Genuity. Please.
Proceed with your questions.
Good morning, Thanks for taking our question our profitability inflection question was already answered. So just one from us as perhaps it from a longer term question I guess, while it's tough for anybody to grow volumes in the current inflationary environment, what is a reasonable expectation for volume growth across your product lines. During normal times you guys have what appears to be.
Our winner's curse of really high brand awareness and household penetration.
Curious what drives those incremental volumes. Thank you. So as we said on the road show and our algorithm has really not changed since then with household formation and.
The overall <unk>.
Sold staples and use of our products low single digits, which is what we've been performing at now versus pre pandemic levels.
Most of our categories is that fair.
Volume growth to used as a model.
Thank you.
Thank you.
At this time, we have reached the end of our question and answer session I'll turn the call over to Lance Mitchell for closing remarks.
Well. Thank you operator, and thank you everyone for your questions and your interest in our business.
I want to extend a sincere. Thank you to all of our employees and to our team that's been focused on the execution of the Reynolds be recovery plan, they've done an outstanding job on him I'm really proud of them.
We're off to a good start in 2023 and I look forward to updating you further throughout the year. Thank you.
Thank you. This does conclude today's conference you may disconnect. Your lines at this time. Thank you for your participation.