Q3 2023 Edgewell Personal Care Company Earnings Call

Good day and welcome to the actual personal kit Q3, 2023 unencumbered school open.

He spent so they listen only mode should you need assistance. Please signal a conference specialist by pressing the stocky followed by zero. After today's presentation, there will be an opportunity to ask questions to ask a question. You May Press Star then one on the Touchtone phone to withdraw your question. Please press Star then two please note. This event is being recorded.

I would now like to Tony conference over to Chris Gough Vice President of Investor Relations. Please go ahead.

Good morning, everyone and thank you for joining us this morning for <unk> third quarter fiscal year 2023 earnings call with me. This morning are Rod Little our President and Chief Executive Officer, Dan Sullivan, Our Chief Financial Officer, Rod will kick off the call then hand, it over to Dan to discuss our results and update to the full year 'twenty three outlook before we transition to Q&A.

This call is being recorded and will be available for replay via our website www dot <unk> dot com.

During the call we may make statements about our expectations for future plans and performance.

This might include future sales earnings advertising and promotional spending product launches savings and costs related to restructuring acquisitions, and integrations and changes to our working capital metrics currency fluctuations commodity costs category value future plans for return of capital to shareholders and more.

Any such statements are forward looking statements for the purposes of the Safe Harbor provisions under the private Securities Litigation Reform Act of 1095, which reflect our current views with respect to future events plans or prospects. These statements are based on assumptions and are subject to various risks and uncertainties, including those described under the caption risk factors in our <unk>.

In our report on Form 10-K for the year ended September 32022 as may be amended in our quarterly reports on Form 10-Q, which is on file with the SEC. These risks may cause our actual results to be materially different from those expressed or implied by our forward looking statements. We do not assume any obligation to update or revise any of these forward looking.

Shipments to reflect new events or circumstances.

Except as required by law.

During this call we will refer to certain non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is shown in our press release issued earlier today, which is available at the Investor Relations section of our website.

non-GAAP information is provided as a supplement to not as a substitute for or as superior to measures of financial performance prepared in accordance with GAAP. However management believes these non-GAAP measures provide investors with valuable information on the underlying trends of our business with that I'd like to turn the call over to Rod.

Thank you Chris Good morning, everyone and thanks for joining us on our third quarter earnings call.

This was another strong quarter in which we continued to make progress against our strategic priorities.

Organic net sales increased four 5% largely in line with our expectations and making nine consecutive quarters of growth.

Adjusted earnings per share and adjusted EBITDA increased 14% and 12% respectively.

We expanded gross margin by 80 basis points or 185 basis points.

Constant currency.

Strong bottom line performance was delivered despite facing a <unk> 10 headwind from unfavorable currency and taxes and over 300 basis points of gross inflationary headwinds and cost of goods.

Our strong performance this quarter illustrates both the advantages of operating a broad and global Grand portfolio as well as the impact of strong commercial execution.

Organic net sales growth in the quarter was led by international markets, which contributed nearly 9% organic net sales growth.

This growth was broad based across segments and driven by both higher volumes and price.

North America organic net sales increased just over 2% driven by price as category growth slowed sequentially, most notably in Sun and skin care.

Since the initiation of our new growth strategy, two and a half years ago, our business has delivered consistent structural topline growth.

Fueled by a stronger portfolio of brands and underpinned by the strides we have made across brand building product innovation and retail execution.

While the growth this quarter once again exceeded our long term algorithm.

Composition of our growth was very consistent with our long term view is that right to win brands, which include some skin in grooming grew organic net sales double digits.

By both volume and price and a right to play brands were essentially flat in the quarter as higher pricing offset lower volumes.

As I've discussed previously in what continues to be a challenging operating environment. It is critical that we control the controllable.

I am proud of the team's strong operational execution that enabled us to deliver better in stock position.

Good on shelf performance with stable market share and strong E Commerce performance.

We again delivered against our productivity and efficiency initiatives, which coupled with price execution.

<unk> to more than offset inflationary headwinds leading to healthy gross margin expansion in the quarter.

And as you saw in our international performance, we are realizing the benefits from our revised go to market approach better execution and improved in market capabilities.

In the quarter. We also released our fiscal 2018, a sustainability report highlighting the good progress we have made against our commitments across all three of our sustainability pillars, namely our brands, our operations and supply chain and our people and communities are.

Our sustainable care 2030 strategy underpins all that we do and aligns with our values as a modern and responsible.

<unk> sustainable consumer goods company.

I'm proud of our accomplishments to date, including being recognized as one of USA today's climate leaders in the United States as well as a meaningful gain in rankings up to number 37 overall in Newsweek's annual list of the most responsible companies.

With respect to our outlook for the business, we continue to navigate this challenging environment well.

Despite persistent inflation broader macroeconomic headwinds the consumer remains largely resilient.

This said we have seen some impactful changes within the Sun care category in North America since our last earnings call in early May.

After a solid start to the season beginning around memorial day consumption has been negatively impacted by unfavorable weather conditions across most of the United States.

Which has subsequently affected replenishment order flow for most retailers in the current quarter.

And although we are still in the midst of the season and recent category consumption trends in July have improved we now anticipate that our United States Sun care sales, while still projected to grow mid single digits for the year.

Will be lower than previously expected, which is reflected in our revised sales outlook with Dan will take you through shortly.

We remain confident in the underlying fundamentals of our business.

And we expect to deliver organic net sales growth slightly above the midpoint of our previous outlook range.

This puts us on track to deliver our third consecutive year of 4% or more organic net sales growth.

We expect adjusted earnings per share and adjusted EBITDA to be at or above the high end. The previously provided ranges.

Importantly, we've seen a return to gross margin accretion.

The realization of price actions ongoing execution of our productivity initiatives and some moderation in inflation.

I'm confident that we are taking the right actions to deliver sustained value creation over the long term.

As I said a quarter ago as we move beyond this period of significant inflation and foreign exchange headwinds as well as other supply chain challenges I believe we will realize the full potential of.

Our fundamentally improve business model driven by continued top line growth gross margin expansion and free cash flow generation.

And now I'd like to ask Dan to take you through our third quarter results.

Also to provide additional details on our outlook for fiscal 2023, Dan.

Thank you Rob Good morning, everyone. As you just heard we delivered another strong quarter with mid single digit organic net sales growth and notable gains internationally from strong performance in both wet shave and Sun care.

Market share performance was solid highlighted by gains in our women's shave business here in the U S and in key international markets.

On the bottom line, we delivered double digit adjusted EPS growth that was underpinned by meaningful gross margin expansion and good cost control.

Giving us increased confidence in our ability to deliver full year profitability at or above the high end of the previously provided range for both EPS and EBITDA.

This quarter was the ninth consecutive quarter organic net sales growth.

This was delivered both in international and North American markets, reflecting continued strong demand for our products and was led by further price realization and good performance on shelf and improved product availability.

As anticipated we had significant gross margin expansion during the quarter.

We have successfully delivered the margin inflection originally forecasted.

Rob mentioned that the operating environment remains challenging so let me give you some insight into the external dynamics in the quarter.

Overall, the supply chain continues to stabilize and our service levels and fill rates further strengthened.

Inflation is east and certain items in the commodity basket of turned deflationary the labor remains extremely tight.

Gross inflation still presented meaningful headwinds in the quarter of approximately 330 basis points.

This did represent sequential easing and we continue to expect further flattening in the fourth quarter.

While the consumer remained largely healthy across the start of the summer we saw some softening in certain category consumption in the U S.

Aggregate category growth in the quarter was just over 3% down about six points from a quarter ago, driven primarily by Sun care and to a lesser degree Fem care.

The Sun care category was essentially flat in the most recent 13 weeks influenced by extreme heat and excessive rain across the U S.

This adverse weather across the U S. Since memorial day negatively impacted retailer replenishment orders in July , which I'll talk about in a bit more detail shortly.

In the wet shave category, we continue to be very pleased with Billy's U S retail expansion there.

In the U S razor blades category consumption was flat for the quarter, while our market share an aggregate declined 20 basis points.

Gains in our women systems portfolio led by Billy were offset by declines in men systems and disposables.

Women shave value share results in the quarter continue to be positive. Despite the heightened competitive environment and importantly, our volume share gains of 160 basis points, where above recent trend.

John and skincare organic net sales increased 13% driven by strong growth across the full portfolio of Sun grooming and weapons.

North American Sun care growth of just under 11% was driven by both price and volume gains.

This quarter strong performance comes in spite of the negative impact of Sun care order phasing into cue to discuss last quarter.

As mentioned international Suncor sales increased over 20 per cent also driven both by price and volumes.

In the U S. The Sun care category was flat for the quarter, an occasion base usage was down due to the poor weather conditions.

As competitive products return to shell following last year's recalls our son care brands lost approximately 90 basis points of market share in the quarter. However, a marked improvement from trend.

Banana boat Hello, This number one share position during the quarter.

Grooming organic net sales increased almost 13% led by Jack Black growth in North America, and Bulldog growth internationally.

Went once organic net sales grew just under 13% and our share approached 80%.

As category consumption in the U S flattened in the third quarter up about a point or Femcare organic net sales were essentially flat as nearly 7% price gains were offset by similar volume declines.

<unk> to your stacked organic growth continues to be healthy and our dollar sharing the quarter and over the last 52 weeks with stable <unk>.

Importantly, our volume share increased 30 basis points in the quarter.

Now moving down the P&L.

Gross margin on and adjusted basis increased 80 basis points for 185 basis points at constant currency.

In the quarter gains from price execution fully offset persistent yet easing cogs inflation as approximately 375 basis points of price gains and 205 basis points of productivity savings helped to offset a 330 basis points headwind from inflationary pressures and the 65 basis point <unk>.

Packed from negative category and market mix.

ANP expense was 12.3% of net sales.

Excluding the favorable impact of currency translation A&P decreased about a million dollars compared to the prior year quarter.

Adjusted SG&A decreased 20 basis points versus last year as the benefits of leverage in operational efficiency programs more than offset the impact of hire people costs and travel expense.

Adjusted operating income was $83.5 million compared to $70.3 million last year, an increase of nearly 19% or 28% constant currency increase gap.

Gap diluted net earnings per share, where one dollar one compared to 57 cents in the third quarter of fiscal 22 and.

And adjusted earnings per share were 98 cents compared to 86 cents in the prior year period, including an estimated 17 negative impact from unfavorable currency and taxes and a three cent favorable impact from share repurchases.

Justin EBITDA, it was $109 $1 million compared to $97.1 million in the prior year inclusive of an estimated 5.5 million dollar unfavourable impact from currency.

Cash flow generation was robust in the quarter and net cash from operating activities for the nine months ended June 30th more than doubled to $168.3 million compared to $72.4 million in the same period last year.

We ended the quarter with $207 million in cash on hand access to the $334 million Undrawn portion of our credit facility and a net debt leverage ratio of about 3.2 times.

And the quarter share repurchases totaled over $15 million.

In addition, we continued our quarterly dividend payout and declared another cash given out of 15 cents per share for the third quarter.

In total we returned nearly $23 million to shareholders during the quarter and $69 million over the first nine months of the year.

Now turning to our outlook for fiscal 2023.

As we've discussed the commercial and operational fundamentals of our business are strong and we're confident that we're on track to deliver another year of mid single digit top line growth.

The consumer remains largely healthy and international categories continue to strengthen across many core markets. However.

However, we're mindful that the challenges of the external operating environment that we've discussed have not fully abated.

In addition, a less robust whether impacted some season in the U S has impacted our growth outlook for the current quarter as retailers adjust replenishment ordering and managed down in store inventory levels.

Despite this we anticipate delivering EBITDA and dps results at or above the high end of our guidance range.

As a result for the fiscal year, we know anticipate organic net sales growth to be slightly above the mid point of the three to five per cent range, reflecting lower projected sun care sales in the fourth quarter.

As a reminder, this is inclusive of an estimated 50 basis points full year headwind related to our intentional steps to revamp promotional activity with wholesalers in Japan, and structurally decrease inventory levels in queue for which we spoke to last quarter, but was not contemplated in our initial outlook at the beginning of the year.

We now expect full year gross margins to be flat with last year, whereas previously we anticipated a small level of rate accretion.

There is no material change to our view on price realisation inflationary headwinds or productivity savings for the year. However.

However, more unfavorable mix and incremental unfavorable transactional FX have impacted fourth quarter expectations.

Importantly, gross margin accretion in the fourth quarter is expected to be approximately 200 basis points inclusive of about 100 basis points of effects headwinds.

We continue to anticipate adjusted operating profit margin accretion on a full year basis.

The impact of currency on operating profit is now expected to be a 27 million dollar headwind, a 3 million dollar incremental headwinds over our prior outlook.

Adjusted EBITDA is now expected to be slightly above the high end of the $320 million to 335 million dollar range.

We anticipate that the tax rate will remain at 25%.

Adjusted EPS is expected to be at the high end of the $2 and $32.50 range inclusive of approximately 38 per share of currency headwinds.

This upward revision to our outlook is largely reflective of are better than expected results in Q3.

For more information related to our fiscal twenty-two anything outlook I would refer you to the press release that was issued earlier this morning, and now I'd like to return the call to the operator for the Q&A session.

We will now begin the question and answer session to ask a question.

And one on your type stuff.

Using a speaker phone please pick up.

Pressing the keys you said anytime you question, that's been addressed and you would like to <unk>. Your question. Please press starving too.

We will have a tough time blockbuster.

Our first question comes from the line up to make money with apathy. Please go ahead.

Thank you good morning, everyone. So just two two questions on on the Sun care business, you know now that we're going through the fall reset.

Process and there's been a lot of volatility on the shelf given product Lee calls in products coming back on shelf. Just maybe you guys. If you can just give us kind of the state of the Union on what you see net net can kind of in terms of how you think you'll end up.

As we kind of come to the close of the year and then the the broader bigger pick a question is there's been a lot of changes in your international business as it relates to operating model and management and just wanted to see if we can get an update on what's going on in that Martin in Japan, and Europe and some other China I think there was some changes there.

You can just give us an update there as well thank you.

Hi, good morning, good questions <unk>, let's start their state of the Union, we feel good about our business.

And Sun care and that we got the distribution, we expected to get we had a good innovation program. This year, that's been well received by the consumer.

And I think you know when we look at what we can control and how we've executed in Sun care I think that the team has done a fantastic job.

What we cannot control Unfortunately is the weather and as Dan had referenced.

Starting about memorial day, all the way through the July 4th holiday.

On both the west and East coast, particularly in the northeast.

We have poor weather lots of rain cooler than normal and that impacted consumption. If you'll recall Q2, we had a good shipment in Q3.

I'm here in the U S. We grew a double digits again, and so without weather not being good. We're now seeing a ketchup on consumption. So good news is consumption turned positive in July 2nd week of July .

So it's gonna be a bit of a different phasing, but but as we called out in the script. We do expect the son or Sun care business to be down versus what we had talked about last quarter still growing nicely for the year and again you saw not only a good result here in the U S. But also internationally.

Where we were up a little over 20% organic based on strength internationally as well. So again, what we can control we feel good about we're not going to get into a situation, where there's gonna be a messy clean up at the end with too much inventory out there will be careful with what we ship an ear in Q4 and that's contemplated.

In our revised guide as it relates to international.

We have made a lot of change <unk>.

In terms of how we run the business effectively eliminating.

An international layer, Dan taking on Europe , Latin America is direct reports to him me taking on Japan, China is direct reports to me and then of course, we have Erica tool running North America. What this has done for US is allowed us to go recruit.

New leadership and talent and in some markets, who have built out entirely new what I think are more capable teams and some of the markets and we've got momentum and international as you see with the nearly 9% organic increase this quarter I would expect that to continue as we start to look towards 2024.

By the way son care.

With this bad weather base should bode well for 2024, if we get a more typical weather season, I think both will be tailwinds for US now my son care at the base now button International we're just getting started with some of the work we need to do to transform our capability and some of the markets, but I think the work done in Latin America.

<unk> team down there has been fantastic up 16 per cent in the quarter. They're ahead on the journey, we've got new leadership in Europe , taking a more pan European approach.

That bodes well for 24 and beyond and.

Then again, China, Japan. We're further ahead in Japan at this point I think we'll see those be accretive as we look into 24 and beyond so we're excited about what's happening.

Internationally two years ago, the focus was U S gift.

Get the U S competitive build the team and the structure and capability here, we've done that and so now the focus has moved international so not only do we have a better brand portfolio, but geographically. We have you know just more countries winning versus losing which was the past posture.

Great. Thanks for the perspective.

Thank you Nick.

Upper next question please.

Okay. Next question comes from the line must be a capital K.

Please go ahead.

Yeah good morning.

Johnny Bill.

Yeah.

And to understand.

The the kind of slight slowdown and just trying to.

It seemed the in the spring quarter, you got some more shelf space and we're getting some momentum there and didn't know if it's more just you had good shipments in the last quarter and the volume didn't show up the consumers didn't show up this order for.

Mmm.

Okay.

The signature slow down I know it was kind of.

Yeah, Bill, where we're struggling to I think I've got the basis of the costume, but you're breaking up just the category are interested in here is what yeah just.

Right now.

Can you hear me now.

Yes.

You just just to comment on your Femcare performance from last quarter. This quarter it seemed to be a pretty big slowdown and didn't know if that's just <unk>.

<unk> space Gaines versus consumer takeaway being a little bit lower than you would expect it or if there's something else going on.

Yeah, it's more of a base period issue Bill if it and I'll, let Dan give you a little more perspective.

On what we're saying we are confident in our Femcare business like where we are sure performance volume all that good pricing has been received.

The biggest issue you're seeing this quarter.

Is what happened at the base period year ago, where there was some media coverage about a tampon shortage that drove a big consumption increase by consumers effectively pantry loading worried that they wouldn't be able to get tampons.

It was not an accurate portrayal I don't believe of what was actually happening not only with us, but our competitors and so that that was in the base is is that bubble that we effectively cycled the quarter. We just finished yeah. That's right <unk> to remember last year Q2 of last year, we were down double digits organics.

And Femcare for the exact reason brought highlighted recycled that last quarter to two hence the growth.

But I think if you're a ladder up to the category, you're seeing a much more sort of expected category in terms of growth and performance in the quarter were 52 weeks now with you know flat value share performance. So we feel like we we certainly hit that point of stability I think importantly in the third quarter.

Even though the Femcare category slowed versus recent trend we grew volume sure about 30 basis points in a quarter. So so we liked the performance we recognize the the organics are a bit choppy given what's in the base.

Got it and then just kind of a housekeeping on currency I'm not sure. If you said, where where things stand in terms of top and bottom line now tailwind for the fourth quarter and kind of how that would play out as we move into next year I know, you're not giving guidance, but I would think we've now moved to a full full.

Tailwind from currency standpoint.

Yeah, I'll look I think I'll take it in two parts Bill I think.

For the back half of the year, we see that Tailwinds now that it's important to understand where those came from an operational margin operating margin. It's a headwinds transactional FX is still a headwind and that's largely the the effect of the yen what we saw in the quarter and we expect to.

See also on the fourth quarter as gains from below the line hedge and balance sheet Remeasurement. So net net slightly better currency environment. Then we fought a quarter ago quite candidly that flowed through that's why you see the uptick in the guide turns vps.

As far as next year, obviously, you're right, we're not going to comment on that yet, but the thing I would hesitate, though or or put caution around is not only do we need to see how the currency environment shakes out, but we have to then understand the transactional impact again and how inventory will play out over the course of next year similar.

To how we think about inflationary pressures and when that relief will come. So I would we certainly are encouraged but I wouldn't assume that's a day one tailwind for our business.

Got it thank you.

Okay. Thank you Bill operator next question please.

The next question comes from the line of Kris K. The task <unk>. Please go ahead.

Good morning, everyone.

Because I have a couple of questions about gross margin hi, So just maybe just simply the gross margin what was the the the key driver of why gross margin.

Is coming.

Got a bit versed prior expectations.

Got it very simply Chris it's increased headwinds from mix, that's largely a reflection of the international growth raw.

<unk> talked about and then within the shaved category.

International markets tend to be more disposable and P. B G base. So <unk>. So the mix was a bit more negative than we had anticipated on the margin profile and then you have a bit higher FX headwinds on transactional FX that I've mentioned on a previous call I think really important to call out the <unk>.

<unk> elements of margin right. So we go back to price realisation productivity.

Execution and easing inflation.

We're literally on the pen, where we thought we would be a year ago nothing has changed their but obviously some of these other items are a bit harder to predict have proven to be a bit of a headwinds here as we exit the year, but those are those are not structural we think those are unique to this to this moment.

Okay, Okay and then.

Just a second related question you know just.

On your view around perhaps medium term gross margins I I guess I'm struck by <unk>.

Street estimates for.

Basically 100 basis points of gross margin expansion next year would seem significant it relative to what you typically do and thoroughly that's driving Ah and Ernie throat number that you don't typically do either.

Have your.

You know thinking about continuing to invest.

Which I would imagine is top of mind.

So I guess I'm, just you know relative to gross margins coming out of touch you know just.

How do you think about the medium term trajectory to get back to a gross margin kind of in the.

Pre pandemic range and.

Perhaps the kind of timeline that you can see that that coming together and whether you know.

Near to medium term methods seem reasonable or not.

I don't know if you have any comment on that.

All of that and how that balances together. Thanks.

Yeah, Yeah. Thanks, Chris So look I think what we've said and we still fundamentally believe is was one we are absolutely committed to getting this business back to its pre COVID-19 margin profile right, we've said that.

And we're committed to that I think the second piece and certainly 2023 is a good proof point, we're confident in our ability to pull the lever is necessary to do that right you have seen that and not just in the pricing work, we've done but in the S. R. G. M work. The teams have done our ability to drive you know cost savings can.

Assistant Lee 200, 225 basis points.

A year or so so the leavers at our disposal, we feel really good about but there are certain factors, namely the inflationary pressures FX that impact the pace at which we can recover the margin mm.

So we're obviously not yet ready to to guide on that for next year will will give full transparency as we do in November .

We liked the fact that that that inflation is easing, we do see structural deflation and certain elements of the commodity basket labor is still the long pole in the tent Oh and is still challenging. So there there are puts and takes and then I think you hit the right point, which is there's a reinvestment cadence here. So I think what I would say.

Just the commitment is there believers are clear and available to us we've demonstrated that I think the pace at which will your cover the margin near term has some some factors to it that we have to work our way through and the plans and certainly we'll talk about it in November and <unk> I would just add one thing onto what.

Dan said, which I think is very comprehensive and hopefully gives you how we're thinking about it.

But don't underestimate the impact of foreign exchange, we talked about it at the beginning of the year, we got 38 cents a headwind year over year <unk>.

In here in foreign exchange and as we go forward and again <unk> out of our control and we won't predict when it happens, but as you get two more normal as defined by the last 2030 years F X ranges among the major G seven currencies.

We will pick that up over time as well right. There. There's a there's a pretty negative view maximally negative I think you're in fiscal twenty-three that we feel like we will recover and you know that's that's well north of 10, 10% EPS right. There. So beyond the work will do in running the business better and and driving revenue management I think we're confident.

Over time, we'll get somebody that F X back as well.

Hey, that's that's helpful. Thank you.

Thank you. Thanks, a lot Chris Operator next question. Please.

The next question comes from the line of Susan Anderson, which kind of kind of Tennessee. Please go ahead.

Hi, My name's. Thanks for taking my question I was wondering if you said how much Kelly contributed in the corner and did you see growth in Philly and then also how it's performing in any retailer and if you've got it going into are you seeing that add to growth or bringing in new customers to the brand.

Hey, Good morning, It's then yeah, Billy did grow in the quarter, we don't disclose sort of the ins and outs with Billy but I think your second question I'll start their spot on like we really are excited about the performance we're seeing in retail.

You'd recall last year was a super important year for the brand at Walmart and.

And the performance there was a clear catalyst or 2023 retail expansion, we're seeing that the brand is up to about a nine sure in the category.

Well you know we're super pleased with the results retailers are very pleased with the results and even as the shelf has gotten more crowded in that space, particularly a target the branch certainly sticks out as a winner amongst the women's category that is then proving to be very important catalyst for next year right and 24.

Is the year that Billy makes its move outside in a much more meaningful way of the shaved category and gets into adjacent category. So we're we're executing sort of the integration playbook and the growth playbook for the brand exactly as we kind of wrote it a year and a half two years ago, and so far really really excited.

About the performance on shelf.

Great that sounds great. Good luck the rest.

Yeah.

Thank you.

Thanks, Susan Upper next question please.

The next question comes from that I normally get tongue, which maintain please go ahead.

Great. Thanks, Good morning, Uhm I wanted to ask you about the next promotional plan versus advertising.

<unk> promised bang across someone that's gonna come up.

Uhm conditions normal lives.

But and relative to Oregon, I think the market expectations advertising emergency ma'am.

A little bit less than I expected and request Martin and buy some perhaps while I'm working like in a substantial as they expect a total would love to hear your commentary in terms of <unk>.

Most high level of this quarter and and your expectations coming forward and Uhm compare and contrast, I'm advertising. Thank you.

Yeah. Thanks, Olivia stand, let let me take the A&P question first because I think that's that's important we spent in the quarter at over 12% rate of sale. So it was by no means a light order you know we felt good about the quantity of spend it was probably about $3 million.

Below what we had anticipated when we last spoke to everyone a quarter ago and I think there were two two reasons for that both around Sun care in the international markets.

You heard we talked in our prepared remarks, we saw tremendous growth over 30% category grow within the key markets in which we play with Sun.

So we had the product on the floor. The execution was terrific. There was simply no need to overspend and we drove a 21% organic growth in the quarter and we gained share in some some pretty important markets like Australia, and Mexico and so for US the international Peace was all about efficiency there was no need to over.

<unk> Conversely in the U S and we talked about what we've seen there in the category and the weather impact by by late May retailers. The shelves had been had been stacked supply was saturated the unfavourable weather was certainly weighing in on on consumer consumption and so it didn't make any.

For us to spend more in that space. The consumer wasn't there so in the U S. It was about effectiveness of spend and so we made the decision to.

To pull back some of that will come back in the quarter <unk> <unk> in the in the quarter. We're in we're expecting over 9%.

<unk> of spend in the fourth quarter, which is you know meaningfully more than a year ago, but again, we're focused on on spending the right amount in the right way and we felt really good about how we executed that in the core to frame P to the broader point, we've said a quarter ago, we expected that that things <unk>.

Get a bit more promotional in the back half of the year that was already contemplated on our outlook, we haven't seen widespread increased promotions or or let's say any irrational behavior a bit in women's shave.

But we don't think that's a reflection of consumer sentiment. We think that's a direct reflection of Billy success, and so, but but that sort of incremental promotional activity on our end was already contemplated an in N out guide from what we said a quarter ago. So no new news there.

Alright, that's helpful. And then perhaps can I just follow up on your read on on consumer sentiment, particularly in saving you might have a few a few companies that have both a private branch broke and it's my life branded so curious if you could talk about sure changes across brain and private label.

Typically if you're seeing any acceleration actually at the low end of the category given the macro situation any any.

Mentality in terms of pricing Tiffany.

We're not seeing any meaningful change in consumer sentiment, we talked about a little deceleration in a couple of categories son being the biggest one which is more about whether the.

The consumer being there, but but beyond that and particularly in shape. If we look at the the last three months.

<unk> growth rate versus prior 52 very much in line here domestically in the U S. So we're not seeing a slowdown internationally, it's actually picked up and we're seeing some increases the depending on the market. You are looking at the consumer is healthy and then within that.

We're not seeing any meaningful trade down to private label for example in the opening price point and we're also not seeing any meaningful trade down to disposable pulling after a you know a lower absolute price point.

Which consumers sometimes do when they get finished and so within Shay, we're seeing a stable growing category and no meaningful to write down.

Alright, thank you.

Thank you. Thank you Olivia operator next question please.

Again, if you had a question please press start than one.

And all my questions. At this time. This concludes that question and answer session. How 'bout now like to turn the conference back over to that plan, a Friday closing remarks.

We just like to thank everybody for your time your continued interest and as well and we'll talk to you in three months.

The conference has not concluded. Thank you for attending today's presentation you may not disconnect.

[music].