Q3 2024 Edgewell Personal Care Co Earnings Call

Operator: Good morning, and welcome to Edgewell's third quarter fiscal year 2024 earnings call. All participants will be in the synonym mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your telephone keypad. To withdraw your question, please press star, then 2. Please note, this event is being recorded. I'd now like to turn the conference over to Chris Gough, Vice President, Investor Relations. Please go ahead.

Speaker Change: Good morning and welcome to Edgewell's third quarter fiscal year 2024 earnings call.

Operator: All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero on your telephone keypad.

Speaker Change: All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero on your telephone keypad.

Speaker Change: After today's presentation, there will be an opportunity to ask questions.

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

Speaker Change: To withdraw your question, please press star then 2.

Speaker Change: Please note, this event is being recorded. I'd now like to turn the conference over to Chris Gough, Vice President, Investor Relations. Please go ahead.

Chris Gough: Good morning, everyone, and thank you for joining us this morning for Edgewell's third quarter fiscal year 2024 earnings call. With me this morning are Rod Little, our President and Chief Executive Officer, and Dan Sullivan, our Chief Financial Officer. Rod will kick off the call, then hand it over to Dan to discuss our results and full year fiscal 2024 outlook before we transition to Q&A. This call is being recorded and will be available for replay via our website, www.edgewell.com.

Chris Gough: Good morning everyone and thank you for joining us this morning for Edgewell's third quarter fiscal year 2024 earnings call.

Chris Gough: 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 and repositioning actions, acquisitions, and integrations. 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 1995, which reflect our current views with respect to future events, plans, or prospects.

Speaker Change: With me this morning are Rod Little, our President and Chief Executive Officer, and Dan Sullivan, our Chief Financial Officer.

Speaker Change: While we'll kick off the call, I'll hand it over to Dan to discuss our results and full-year fiscal 2024 outlook before we transition to Q&A. This call is being recorded and will be available for replay via our website, www.edgewell.com.

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

Speaker Change: This might include future sales, earnings, advertising and promotional spending, product launches, savings and costs related to restructuring and repositioning actions,

Speaker Change: acquisitions, integrations.

Dan Sullivan: changes to our working capital metrics, currency fluctuations, commodity costs, category value, future plans for return of capital shareholders, and more.

Chris Gough: These statements are based on assumptions and are subject to various risks and uncertainties, including those described under the captioned risk factors in our annual report on Form 10-K for the year ending September 30, 2023, 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 statements to reflect new events or circumstances unless acceptance is required by law.

Dan Sullivan: Any such statements are overlooking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995, which reflect our current views with respect to future events, plans, or prospects.

Dan Sullivan: These statements are based on assumptions and are subject to various risks and uncertainties, including those described under the captioned risk factors in our annual report on Form 10-K for the year end of September 30, 2023, as may be amended in our quarterly reports on Form 10-Q , which is on file with the SEC.

Dan Sullivan: These risks may cause our actual results to be materially different from those expressed or implied by our forward-looking statements.

Dan Sullivan: We do not assume any obligation to update or revise any of these forward-looking statements to reflect new events or circumstances.

Chris Gough: During this call, we'll refer to certain non-GAAP financial measures that 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 in the Investor Relations section of our website. This 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-gap measures provide investors with valuable information on the underlying trends of our pandemic. With that, I'd like to turn the call over to Rod.

Dan Sullivan: Acceptance required by law.

Dan Sullivan: During this call we 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.

Dan Sullivan: This 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.

Dan Sullivan: However, management believes these non- GAAP measures provide investors with valuable information on the underlying trends of our business.

Rod Little: Thank you, Chris. Good morning, everyone, and thanks for joining us on our fiscal 2024 third quarter earnings call. Results we posted today and so far this year continue to demonstrate that our strategy is working, and the transformation we began just over three years ago has had a profound impact on our business and results. We've exited a prolonged period of unmatched macroeconomic challenges and Global Business Disruption. Stronger, Healthier, Better Physician Business.

Dan Sullivan: With that, I'd like to turn the call over to Rod.

Rod: Thank you, Chris. Good morning, everyone. Thanks for joining us on our fiscal 2024 third quarter earnings call.

Rod: Results we posted today and so far this year continue to demonstrate that our strategy is working and that the transformation we began just over three years ago has had a profound impact on our business and results.

Rod: We've exited a prolonged period of unmatched macroeconomic challenges.

Rod: and Global Business Disruption as a stronger, healthier, better positioned business.

Rod Little: It's also important to note that we are far from done, and that the transformation of our business continues. Before I turn to our third-quarter results, I'd like to discuss the key changes to our leadership team and organization structure that we announced earlier today. These changes will further strengthen our operating model, streamline decision making, and improve enterprise execution, all of which will better position us to deliver on our overarching strategy to drive sustainable top and bottom line growth. We have five overarching areas of critical focus for our business that serve as the context for the announced changes.

Rod: It's also important to note that we are far from done and that the transformation of our business continues.

Rod: Before I turn to our third quarter results, I'd like to discuss the key changes to our leadership team and organization structure that we announced earlier today.

Rod: These changes will further strengthen our operating model, streamline decision-making, and improve enterprise execution, all of which will better position us to deliver on our overarching strategy to drive sustainable top and bottom-line growth.

Rod Little: First, strengthening our U.S. business, specifically in our right-to-play categories, to better compete for the long term. Second, strengthening and accelerating our consumer-centric innovation platform. Third, continuing to strengthen and leverage our international business. Fourth, doubling down on a clear stream and accelerating efforts to drive meaningful year-on-year gross margin accretion as a catalyst to increase commercial investment. We continue on our path to become a world-class supply chain organization. Fifth, strengthening critical underlying commercial capabilities across the enterprise to drive continued organic top-line growth.

Rod: We have five overarching areas of critical focus for our business that serve as the context for the announced changes.

Rod: First, strengthening our U.S. business, specifically in our right-to-play categories, to better compete for the long term. Second, fortifying and accelerating our consumer-centric innovation platform.

Rod: Third, continuing to strengthen and leverage our international businesses.

Rod: Fourth, doubling down on a clear strength and accelerating efforts to drive meaningful year-on-year gross margin accretion as a catalyst to increase commercial investment as we continue on our path to become a world-class supply chain organization.

Rod: And fifth, strengthening critical underlying commercial capabilities across the enterprise to drive continued organic top-line growth.

Rod Little: In order to increase the speed of progress across these areas of focus, today we announced a series of leadership changes. The first is the creation of a Chief Operating Officer role, to which Dan Sullivan has been appointed. This role will help to streamline and strengthen our existing leadership structure, narrow the span of control, enhance the speed of decision making, and improve enterprise execution that grants critical business priorities to maximize performance. Dan has been with Edgewell since 2019, serving as Chief Financial Officer and President of Europe and Latin America. He has proven to be an exceptional results-driven leader, making him the perfect candidate for the position.

Rod: In order to increase the speed of progress across these areas of focus, today we announced a series of leadership changes.

Speaker Change: The first is the creation of a Chief Operating Officer role, to which Dan Sullivan has been appointed.

Speaker Change: This role will help to streamline and strengthen our existing leadership structure, narrow span to control, enhance the speed of decision-making, and improve enterprise execution against critical business priorities to maximize performance.

Speaker Change: Dan has been with Edgewell since 2019.

Speaker Change: serving as Chief Financial Officer and President of Europe and Latin America. He has proven to be an exceptional results-driven leader, making him the perfect candidate for the position.

Rod Little: While continuing to have purview over finance, IT, strategy, M&A, and business development, he will now also oversee our entire international business. Global Operations and Supply Chain and Corporate Sustainability. As Dan moves into his new role, Francesca Weisman, who has been a key member of our finance team since 2019, will assume the role of Chief Financial Officer, effective December 1. Fran is a very talented finance leader and deserving of this promotion. As CFO, she will continue to lead all aspects of commercial and operational finance and global FP&A with additional responsibilities for controllership and accounting, investor relations, internal audit, tax, and treasury.

Speaker Change: While continuing to have purview over finance, IP, strategy, M&A, and business development, he will now also oversee our entire international business.

Speaker Change: Global Operations and Supply Chain and Corporate Sustainability.

Speaker Change: As Dan moves into his new role, Francesca Wiseman, who has been a key member of our finance team since 2019,

Unnamed Speaker: will assume the role of Chief Financial Officer, effective December 1. Importantly, our manufacturing and supply chain organization continue to execute at a high level and once again realized better than expected productivity savings. Women's Day remains highly competitive and extremely promotional, particularly in the mass channel.

Francesca Weisman: We'll assume the role of Chief Financial Officer, effective December 1st.

Speaker Change: Fran is a very talented finance leader and deserving of this promotion.

Speaker Change: As CFO , she will continue to lead all aspects of commercial and operational finance and global FP&A, with additional responsibilities for controllership and accounting, investor relations, internal audit, tax, and treasury.

Rod Little: These internal appointments are a reflection of our incredibly talented team that I am so proud to work alongside. As I mentioned, Dan will head our international businesses, which include Japan and China, in addition to Europe, Latin America, Oceania, and Armenia. Our current president of North America, Eric O'Toole, will be leaving the conference.

Speaker Change: These internal appointments are a reflection of our incredibly talented team that I'm so proud to work alongside.

Speaker Change: As I mentioned, Dan will head our international businesses, which include Japan and China, in addition to Europe , Latin America, Oceania, and Armenia.

Speaker Change: Our current president of North America, Eric O'Toole, will be leaving the company. I want to personally thank Eric for his contributions to Edgewell and wish him well in his future endeavors.

Rod Little: I want to personally thank Eric for his contributions to Edgewell and wish him well in his future endeavors. I will assume direct responsibility for the North American region in the interim, and an executive search is currently underway to fill the position. Once the role is filled, it will continue to report to me.

Speaker Change: I will assume direct responsibilities for the North American region in the interim, and an executive search is currently underway to fill the position.

Rod Little: Importantly, moving forward, in addition to focusing on strengthening our U.S. business, I will also focus more of my time on accelerating our innovation agenda. While I am pleased with the progress here, as evidenced by the very successful execution behind our Banana Boat 360 coverage launch, which reached the number one and number two new products in the category in the third quarter, I want us to move faster and increase our disruption.

Speaker Change: Once the role is filled, it will continue to report to me.

Speaker Change: Importantly, moving forward, in addition to focusing on strengthening our U.S. business, I will also focus more of my time on accelerating our innovation agenda.

Speaker Change: While I am pleased with the progress here, as evidenced by the very successful execution behind our Banana Boat 360 coverage launch.

Speaker Change: which has reached the number one and number two new products in the category in the third quarter. I want us to move faster and increase our disruption.

Rod Little: I'm confident that these changes to enhance our leadership team and simplify our structure will strengthen our business and ultimately better position Edgewell for sustainable top and bottom line growth over the longer term. Now, let's turn to our results for the quarter. We delivered strong financial results again this quarter, with gross margin accretion of 160 basis points, 7% year-over-year adjusted EBITDA growth, and 23% adjusted earnings per share, all of which were above our expectations. Our team has executed well on the pillars of our strategy.

Speaker Change: I'm confident that these changes to enhance our leadership team and simplify our structure will strengthen our business and ultimately better position Edgewell for sustainable top and bottom line growth over the longer term.

Rod Little: This gross margin expansion in the quarter was underpinned by a healthy balance of our productivity initiatives for the disciplined execution of our strategic revenue management. Our strong third-quarter margin results serve as a catalyst for the increase in our profit outlook for the full year while reinforcing our commitment to return to pre-COVID levels of gross margins over time. Top-line results were mixed. However, our international businesses sustained their momentum, achieving organic med sales growth of over 6%, driven equally by price and volume gains, with growth realized across nearly all regions and markets. Sales in North America declined by just over 2%, largely driven by our film care business.

Speaker Change: Now let's turn to our results for the quarter.

Speaker Change: We delivered strong financial results again this quarter, with gross margin accretion of 160 basis points, 7% year-over-year adjusted EBITDA growth, and 23% adjusted earnings per share growth, all of which were above our expectations.

Speaker Change: Our teams executed well on the pillars of our strategy.

Speaker Change: as growth margin expansion in the quarter was underpinned by a healthy balance of our productivity initiatives and disciplined execution of our strategic revenue management efforts.

Speaker Change: Our strong third quarter margin results serve as the catalyst for the increase in our profit outlook for the full year, while reinforcing our commitment to return to pre-COVID level gross margins over time.

Speaker Change: Top line results were mixed. Our international businesses sustained their momentum, achieving organic med sales growth of over 6%, driven equally by price and volume gains, with growth realized across nearly all regions and markets.

Speaker Change: Sales in North America declined just over 2%, largely driven by our film care business.

Rod Little: Organic net sales growth in the quarter featured continued strength in our right-to-win portfolio, which grew over 5%, propelled by our industry-leading sun care and grooming business. Double-digit organic nut sales growth and grooming were underpinned by incremental distribution and new product rollouts in Cremo and Billy in North America. SunCare Organic Med sales increased mid-single digits in the quarter with modest growth in North America as it cycled double-digit growth a year ago.

Speaker Change: Organic net sales growth in the quarter featured continued strength in our right to win portfolio which grew over 5% propelled by our industry-leading sun care and grooming businesses.

Speaker Change: Double-digit organic nut sales growth and grooming was underpinned by incremental distribution new product rollouts in Cremo and Billy in North America.

Speaker Change: SunCare Organic Net Sales increased mid-single digits in the quarter with modest growth in North America as it cycled double-digit growth a year ago.

Rod Little: Though early season unfavorable weather dampened the start of the sun season in the United States, category consumption trends in our share position strengthened across the quarter. We remain bullish on the balance of the season with around 30% of the season's consumption still to go, and the teams are focused on ensuring strong execution in the summer's final month. Our right-to-play category declined 2% in the quarter, as broad growth across international markets was not enough to offset declines in the United States.

Speaker Change: Though early season unfavorable weather dampened the start of the sun season in the United States, category consumption trends and our share position strengthened across the quarter.

Speaker Change: We remain bullish on the balance of the season with around 30% of the season's consumption still to go. And the teams are focused on ensuring strong execution in the summer's final months.

Speaker Change: Our right-to-play category declined 2% in the quarter as broad growth across international was not enough to offset declines in the United States.

Rod Little: In North America, our wet shave and feminine care businesses continue to face challenging category, channel, and competitive dynamics that tighten promotional levels, further pressuring growth. Our wet shave business performed largely as we expected, with organic net sales down about 1%. However, our thin care performance was well below our expectations, as persistent sluggishness and sport tampons and a delay in our carefree pads rollout materially impacted sales.

Speaker Change: In North America, our wet shave and feminine care businesses continue to face challenging category, channel, and competitive dynamics. With heightened promotional levels, further pressuring growth.

Speaker Change: Our wet shave business performed largely as we expected.

Speaker Change: with organic net sales down about 1%.

Speaker Change: However, our FemCare performance was well below our expectations, as persistent sluggishness in sport tampons and a delay in our carefree pads rollout materially impacted sales.

Rod Little: With the shelf recess now finally complete and the new Carefree Master Brand having received solid retailer support, we expect organic sales growth to return for FemCare in the fourth quarter. In summary, looking at our year-to-date performance, our broad and diverse portfolio of global brands and excellent execution across our strategic priorities has enabled us to deliver 180 basis points of year-on-year adjusted gross margin accretion and realized 25% adjusted earnings per share growth.

Speaker Change: With the shelf resets now finally complete and the new Carefree Master Brand having received solid retailer support, we expect organic sales growth to return for FemCare in the fourth quarter.

Speaker Change: In summary, looking at our year-to-date performance, our broad and diverse portfolio of global brands and excellent execution.

Speaker Change: across our strategic priorities has enabled us to deliver 180 basis points of year-on-year adjusted gross margin accretion and realized 25% adjusted earnings per share growth.

Rod Little: And we continue to be disciplined in our approach to capital allocation, putting our healthy cash flow generation to work, supporting our brands, and returning $63.5 million to shareholders while lowering our net debt leverage to 3.1 times this quarter. With just one quarter of the fiscal year left, as we look to next year, particularly with the changes we announced today, our priorities are clear.

Speaker Change: And we continue to be disciplined in our approach to capital allocation.

Speaker Change: putting our healthy cash flow generation to work, supporting our brands and returning $63.5 million to shareholders while lowering our net debt leverage to 3.1 times this quarter.

Speaker Change: With just one quarter of the fiscal year left, as we look to next year, particularly with the changes we announced today, our priorities are clear. We will continue to make gross margin accretion a priority to both fuel brand reinvestment and deliver increased profitability.

Rod Little: We will continue to make gross margin accretion a priority to both fuel brand reinvestment and deliver increased profitability; we will invest in consumer-centric innovation as a core catalyst for the differentiation of our brands on shelf. And we will continue to deliver top and bottom line results in line with or above our stated algorithm. I'm confident that the changes announced today better position us to achieve our goals. And now, I'd like to ask Dan to take you through our third quarter results and discuss our outlook for fiscal 2024. Dan?

Speaker Change: We will invest behind consumer-centric innovation as a core catalyst for the differentiation of our brands on shelves, and we will continue to deliver top and bottom line results in line with or above our standard algorithm.

Speaker Change: I'm confident that the changes announced today better position us to achieve our goals.

Speaker Change: And now, I'd like to ask Dan to take you through our third quarter results and discuss our outlook for fiscal 2024. Dan?

Dan Sullivan: Thank you, Rod. Good morning, everyone. First, let me say that I'm thrilled to take on the role and responsibilities of COO. I also want to add my congratulations to Fran, whom I've had the privilege of working with for over two decades. She's been an invaluable asset in her four years here at Edgewell, and I know she'll build on her strong track record of success in the CFO role. As Rod outlined, the changes announced today will simplify operating and reporting structures, expedite decision making, and better leverage commercial and operational capabilities across our organization, all of which will better position us to capitalize on future growth, improve core operational performance, and maintain our commitment to grow our business responsibly. I appreciate the trust placed in me by Rod and the board, and I'm excited to work more closely with our talented teammates across the globe.

Dan Sullivan: Thank you, Rod. Good morning, everyone. First, let me say that I'm thrilled to take on the role and responsibilities of COO.

Dan Sullivan: I also want to add my congratulations to Fran, who I've had the privilege of working with for over two decades.

Speaker Change: She's been an invaluable asset in her four years here at Edgewell, and I know she'll build on her strong track record of success in the CFO role.

Speaker Change: As Rod outlined, the changes announced today will simplify operating and reporting structures, expedite decision-making, and better leverage commercial and operational capabilities across our organization.

Rod: All of which will better position us to capitalize on future growth, improve core operational performance, and maintain our commitment to grow our business responsibly.

Rod: I appreciate the trust placed in me by Rod and the board, and I'm excited to work more closely with our talented teammates across the globe.

Dan Sullivan: Now, moving on to our results for the quarter. As Rod mentioned, execution of our broader strategies continues to yield good results. The inherent strength of our business model was again demonstrated this quarter as modest top-line growth of about 1%, which was largely in line with our expectations, translated into 23% adjusted EPS growth, driven by another quarter of meaningful year-over-year cross-margin accretion. While the macro environment in the U.S. remains choppy and increasingly promotional, our continued momentum across international markets and strong operational fundamentals and cost decisions enabled us to raise our Overall, the external environment in which we are operating is challenging. Inflation, though easing, remains stubbornly persistent, while the imbalance of labor supply and demand pressures wages.

Rod: Now, moving on to our results in the quarter.

Rod: As Rod mentioned, execution of our broader strategies continues to yield good results.

Rod: The inherent strength of our business model was again demonstrated this quarter as modest top-line growth of about 1%, which was largely in line with our expectations.

Rod: translated into 23% adjusted EPS growth.

Rod: driven by another quarter of meaningful year-over-year gross margin accretion.

Rod: While the macro environment in the U.S. remains choppy and increasingly promotional, our continued momentum across international markets and strong operational fundamentals and cost discipline enabled us to raise our full-year adjusted EPS and EBITDA outlook, which I will discuss shortly.

Rod: Overall, the external environment in which we are operating is challenging.

Rod: Inflation, though easing, remains stubbornly persistent while the imbalance of labor supply and demand pressures wages.

Dan Sullivan: The strong dollar and higher interest rates continue to be headwinds, and importantly, consumption across U.S. shave categories, and in particular women's shave, is softening. Gains from pricing have eased compared to a year ago, and volumes were down slightly in our segment. These trends are most notable in the drug channel, where we're seeing lower foot traffic, retailer execution challenges, and a highly competitive environment on shelves. We also continue to see a highly promotional environment, especially, and though not limited to, the wet shave and feminine care category.

Rod: The strong dollar and higher interest rates continue to be headwinds, and importantly, consumption across U.S. shave categories, and in particular women's shave, softened.

Rod: Gains from pricing have eased compared to a year ago, and volumes were down slightly in our segments.

Rod: These trends are most notable in the drug channel, where we're seeing lower foot traffic, retailer execution challenges, and a highly competitive environment on shelf.

Rod: We also continue to see a highly promotional environment, especially in, though not limited to, the wet shave and femme care categories.

Dan Sullivan: We've responded in kind, reallocating top-of-the-funnel brand investment into retail execution spend, with an increased focus on promotions and value offerings for our consumers. Importantly, our manufacturing and supply chain organization continue to execute at a high level and once again realize better than expected productivity savings, which fuels strong year-over-year growth margin gains despite the increased promotional spending in the U.S. Now, let me turn to the detailed results Organic net sales increased 0.6%; a strong performance across international markets and global growth in sun care and grooming were offset by declines in North America wet shave and fencing. International growth of over 6% was equally fueled by price and volume gains of 3%. High single-digit growth across Latin America and greater China, coupled with mid-single-digit growth in Europe and Oceania were notable.

Rod: We've responded in kind, reallocating top-of-the-funnel brand investment into retail execution spend, with increased focus on promotions and value offerings for our consumers.

Rod: Importantly, our manufacturing and supply chain organizations continue to execute at a high level, and once again realize better than expected productivity savings.

Rod: which fueled strong year-over-year growth margin gains despite the increased promotional spending in the U.S.

Dan Sullivan: Market share gains in wet shade in Japan and strengthening trends across key European markets and in Mexico sun care highlights in the course, Organic sales in North America were down 2.4%, as double-digit growth in grooming and 1% growth in sun were offset by declines in wet shave and femme care. Wet Shave Organic Net Sales were down 0.6% as growth in our men's and women's systems businesses was offset by declines in preps and disposal.

Speaker Change: Now let me turn to the detailed results for the quarter. Organic net sales increased 0.6 percent. A strong performance across international markets and global growth in sun care and grooming were offset by declines in North America wet shave and fem care.

Speaker Change: international growth of over 6% was equally fueled by price and volume gains of 3%.

Speaker Change: High single-digit growth across Latin America and greater China, coupled with mid-single-digit growth in Europe and Oceania were notable.

Speaker Change: Market share gains in wet shade in Japan and strengthening trends across key European markets and in Mexico's sun care were highlights in the quarter.

Speaker Change: Organic sales in North America were down 2.4% as double-digit growth in grooming and 1% growth in sun were offset by declines in wet shave and femcare.

Speaker Change: Wet Shave Organic Net Sales were down 0.6% as growth in our men's and women's systems businesses were offset by declines in preps and disposables.

Dan Sullivan: International Wet Shave Room in single digits with price and volume gains, reflecting continued category health, solid distribution outcomes, and strong in-market brand activation. In North America, wet shave organic net sales declined mid-single digits, largely as expected, and continued to be negatively impacted by weakening category and channel dynamics, particularly in the highly promotional drug chain. Women's Day remains highly competitive and extremely promotional, particularly in the mass channel.

Speaker Change: International Wet Shave grew mid-single digits with price and volume gains reflecting continued category health, solid distribution outcomes, and strong in-market brand activation.

Speaker Change: In North America, wet shave organic net cells declined mid-single digits, largely as expected, and continued to be negatively impacted by weakening category and channel dynamics, particularly in the highly promotional drug channel.

Speaker Change: Women's Shade remains highly competitive and extremely promotional, particularly in the mass channel.

Dan Sullivan: We also face transitory supply challenges in our shaved preps business in North America that caused widespread stockouts on shelves as we transitioned to a new supplier and executed a packaging re-platforming of our Edge brand. We've taken the appropriate steps with our supplier to remedy the situation. So we will likely incur further headwinds in 4Q, which is contemplated in our outline. In the U.S., razors and blades category, consumption was down 3.2% in the quarter, driven mostly by the drug channel, with declining traffic, weaker retailer performance, and heightened promotional levels pressured results.

Speaker Change: We also faced transitory supply challenges in our ShadePreps business in North America that caused widespread stockouts on shelves as we transitioned to a new supplier and executed a packaging re-platforming of our Edge brands.

Speaker Change: We've taken the appropriate steps with our supplier to remedy the situation, though we will likely incur further headwinds in 4Q, which is contemplated in our outlook.

Speaker Change: In the U.S., razors and blades category, consumption was down 3.2 percent in the quarter, driven mostly by the drug channel, with declining traffic, weaker retailer performance, and heightened promotional levels pressured results.

Dan Sullivan: While our market share decreased to 150 basis points overall, the leading driver of this decline is in the drug channel, where we are. The Ability brand again gained share, delivering 180 basis points of share growth as it continues to outperform at retail. The brand has reached a 16 share at Walmart and over a 10 share in drugstores in that target. Sun and skin care organic nut sales increased about 5% as 14% growth in grooming and 4% growth in sun was partially offset by declines in skin.

Speaker Change: While our market share decreased 150 basis points overall, the leading driver of this decline is in the drug channel, where we overindex.

Speaker Change: The Billy brand again gained share, delivering 180 basis points of share growth as it continues to outperform at retail.

Speaker Change: The brand has reached a 16 share at Walmart and over a 10 share in drug in that target.

Speaker Change: Sun and skin care organic nut sales increased about 5% as 14% growth in grooming and 4% growth in sun was partially offset by declines in skin.

Unnamed Speaker: North America and international each grew in sun care, with international leading the way delivering 16% growth through a combination of volume and price. Adjusted SG&A increased 50 basis points in rate of sale versus last year, as higher people-related costs and legal fees were only partly offset by savings realized from ongoing operational efficiency programs, lower VAD debt, and favorable currency. Adjusted EBTA for the full year is now expected to be approximately $356 million.

Dan Sullivan: North America and international each grew in sun care, with international leading the way delivering 16% growth through a combination of volume and price. Results in Mexico were notable, with improved share trends in dollars and units, and strong performance across Mass and Dermaturgy. In the U.S., the sun care category consumption increased approximately 2 percent despite a sluggish start to the quarter, with material consumption declining through May.

Speaker Change: North America and international each grew in sun care with international leading the way delivering 16% growth through a combination of volume and price gains.

Speaker Change: Results in Mexico were notable with improved share trends in dollars and units and strong performance across the mass and derma channels.

Speaker Change: In the U.S., the sun care category consumption increased approximately 2% despite a sluggish start to the quarter, with material consumption declines through May.

Dan Sullivan: Our portfolio reached a 24.5% share, a 10 basis point gain year-on-year, and our 360 coverage spray innovation claimed the top two new items in the category. Grooming organic net sales increased by 14 percent, largely driven by strong U.S. chromo sales, as well as the continued rollout of Billy's Body Care launch at retail. WETRUN's organic net sales declined 2%, and our share declined 210 basis points to approximately 77%. Semicare organic nut sales were down 8% for the quarter, and the decline was more than expected.

Speaker Change: Our portfolio reached a 24.5% share, a 10 basis point gain year-on-year, and our 360 coverage spray innovation claimed the top two new items in the category.

Speaker Change: Grooming organic net sales increased by 14%, largely driven by strong U.S. Carmo sales, as well as the continued rollout of Billy's Body Care launch at retail.

Speaker Change: Wet One's organic net sales declined 2% and our share declined 210 basis points to approximately 77%.

Speaker Change: Senecare Organic Nut Sales were down 8% for the quarter, and the decline was more than expected.

Dan Sullivan: Consumption in the category was up 1.9%, so it was entirely driven by pads, as tampon consumption declined just over 1%, and liners were flat. Overall, the category remains highly promotional, with increasing breadth and depth of promotions from the market.

Speaker Change: Consumption in the category was up 1.9% so entirely driven by pads as tampon consumption declined just over 1% and liners were flat.

Speaker Change: Overall, the category remains highly promotional, with increasing breadth and depth of promotions from the market leader.

Dan Sullivan: We've now cycled through the new plan, Graham, executional delays at retail and broader retailer inventory buy-downs that started last quarter, both of which disproportionately impacted our CARE-free Master Grand Lawn. As the brand scales up on the shelf, we are encouraged by the initial response from consumers, with pads gaining over a point of share in the quarter. In tampons, despite sluggish consumption, the launch of our Playtex Sport High Count was strong, though largely offset by some clean comfort delisting. Now moving down the PML.

Speaker Change: We've now cycled through the new planogram executional delays at retail and broader retailer inventory buy-downs that started last quarter, both of which disproportionately impacted our care-free master brand launch.

Speaker Change: As the brand scales up on shelf, we are encouraged by the initial response from consumers, with pads gaining over a point of share in the quarter.

Speaker Change: In tampons, despite the sluggish consumption, the launch of our Playtex Sport High Count was strong, though largely offset by some clean comfort delistings.

Dan Sullivan: Gross margin rate on an adjusted basis increased 160 basis points, inclusive of 15 basis points of unfavorable currency. We delivered approximately 225 basis points of productivity savings and realized 110 basis points of net price and strategic revenue management, which more than offset core gross inflation and volume absorption of 60 base and Mick's and other headwinds of a hundred. A&P expenses were 11.8% of net sales, down from 12.3% last year, as we responded to the increased promotional environment by reallocating core top-of-the-funnel brand investment into increased promotion and shelf activation.

Speaker Change: Now, moving down to P&L.

Speaker Change: Gross margin rate on an adjusted basis increased 160 basis points, inclusive of 15 basis points of unfavorable currency.

Speaker Change: We delivered approximately 225 basis points of productivity savings, and realized 110 basis points of net price and strategic revenue management gains.

Speaker Change: which more than offset core gross inflation and volume absorption of 60 basis points.

Speaker Change: and Mick's and other headwinds of a hunter-based point.

Speaker Change: A&P expenses were 11.8% of net sales, down from 12.3% last year.

Mick: as we responded to the increased promotional environment by reallocating core, top-of-the-funnel brand investment into increased promo and shelf activation spend.

Dan Sullivan: Adjusted SG&A increased 50 basis points in rate of sale versus last year, as higher people-related costs and legal fees were only partly offset by savings realized from ongoing operational efficiency programs, lower VAD debt, and favorable currency. Adjusted operating income was $94.8 million, compared to $84.1 million last year, an increase of approximately 13%. Adjusted operating margin increased to 170 basis points, reflecting higher gross margin and lower A&P costs, partially offset by higher SG&A.

Mick: Adjusted SG&A increased 50 basis points in rate of sale versus last year as higher people-related costs and legal fees were only partly offset by savings realized from ongoing operational efficiency programs, lower bad debt, and favorable currency.

Mick: Adjusted operating income was $94.8 million compared to $84.1 million last year, an increase of approximately 13 percent.

Mick: Adjusted operating margin increased to 170 basis points, reflecting higher gross margin and lower A&P costs, partially upset by higher SG&A expenses.

Dan Sullivan: Gap diluted net earnings per share were $0.98 compared to $1.02 in the third quarter of fiscal 23, and adjusted earnings per share were $1.22 compared to $0.99 in the prior year period. Currency movements had an approximate $0.06 per share unfavorable impact in the quarter due to translational currency headwinds to operating profit and lower year-over-year hedge gains within other income and expenses.

Mick: Gap diluted net earnings per share were $0.98 compared to $1.02 in the third quarter of Fiscal 23 and adjusted earnings per share were $1.22 compared to $0.99 in the prior year period.

Mick: Currency movements had an approximate $0.06 per share unfavorable impact in the quarter due to translational currency headwinds to operating profit and lower year-over-year hedge gains within other income and expense.

Dan Sullivan: The adjusted EPA was $117.2 million, inclusive of a $4 million unfavorable currency impact, compared to $109.7 million in the prior year. Net cash provided by operating activities was $157.3 million for the first nine months, compared to $168.3 million in the prior year period. We ended the quarter with $196 million in cash on hand, access to the $370 million undrawn portion of our credit facility, and a net debt leverage ratio of 3.1 times.

Mick: The adjusted EBTA was $117.2 million inclusive of a $4 million unfavorable currency impact compared to $109.7 million in the prior year.

Mick: Net cash provided by operating activities was $157.3 million for the first nine months compared to $168.3 million in the prior year period.

Mick: We ended the quarter with $196 million in cash on hand, access to the $370 million undrawn portion of our credit facility, and a net debt leverage ratio of 3.1 times.

Dan Sullivan: To date this fiscal year, we've paid down $72 million of our revolver as we continue to execute our capital allocation strategy with discipline and with a clear priority to de-lever the balance. In the quarter, share repurchases totaled $10 million, and we continued our quarterly dividend payout and declared another cash dividend of 15 cents per share for the third quarter. In total, we returned $17.4 million to shareholders.

Mick: To date this fiscal year, we've paid down $72 million of our revolver as we continue to execute our capital allocation strategy with discipline and with a clear priority to de-lever the balance sheet.

Mick: In the quarter, share repurchases totaled $10 million, and we continued our quarterly dividend payout and declared another cash dividend of $0.15 per share for the third quarter.

Mick: In total, we returned $17.4 million to shareholders during the quarter.

Dan Sullivan: Now, turning to our outlook for fiscal 2020. With our strong financial performance today, we are raising our full-year outlook for both Adjusted EBITDA and EPS. We're also updating our expected organic sales growth to be approximately 1% for the year. We now expect full-year adjusted gross margin accretion of 140 basis points, with no impact from current. This represents a 20 basis point improvement over a previous outcome. Our outlook for gross margin expansion in Q4 has improved by approximately 10 basis points, as we expect stronger productivity gains and continued easing of FX to be partially offset by the impact of increased promotional levels and the negative effect of lower capacity utilization.

Mick: Now, turning to our outlook for fiscal 2024.

Mick: With strong financial performance to date, we are raising our full-year outlook for both adjusted EBITDA and EPS. We're also updating our expected organic net sales growth to be approximately 1% for the year.

Mick: We now expect full-year adjusted gross margin accretion of 140 basis points with no impact from currency.

Mick: This represents a 20 basis point improvement over a previous outlook.

Mick: Our outlook for gross margin expansion in Q4 has improved by approximately 10 basis points.

Mick: as we expect stronger productivity gains and continued easing of FX to be partially offset by the impact of increased promotional levels and the negative effect of lower capacity utilization.

Dan Sullivan: Our outlook now reflects higher SG&A expense than previously contemplated, reflecting today's organizational analysis. Adjusted EBTA for the full year is now expected to be approximately $356 million. Adjusted EPS is now anticipated to be approximately $3 per share, inclusive of an estimated 12 cents per share impact of currency headway, for their year-over-year increase of approximately 15% or 20% at constant current. For more information related to our fiscal 24 outlook, I would refer you to the press release that we issued earlier this March. And now I'd like to turn the call back over to the operator for the Q&A. Yes, thank you. We will now begin the test.

Mick: Our outlook now reflects higher SG&A expense than previously contemplated, reflecting today's organizational announcement.

Mick: Adjusted EBTA for the full year is now expected to be approximately $356 million.

Mick: Adjusted EPS is now anticipated to be approximately $3 per share, inclusive of an estimated $0.12 per share impact of currency headwinds.

Mick: for their year-over-year increase of approximately 15% or 20% at constant currency.

Speaker Change: For more information related to our fiscal 24 outlook, I would refer you to the press release that we issued earlier this morning. And now I'd like to turn the call back over to the operator for the Q&A session.

Operator: Yes, thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing. If at any time your question has been addressed and you would like to withdraw it, please press star then 2. At this time, we will pause momentarily to assemble the roster. And the first question today comes from Chris Carey with Wells Fargo Security.

Speaker Change: Yes, thank you. We will now begin the question and answer session.

Speaker Change: To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker Change: If any time your question has been addressed and you would like to withdraw it, please press star then 2.

Speaker Change: At this time, we will pause momentarily to assemble the roster.

Speaker Change: And the first question today comes from Chris Carey with Wells Fargo Securities.

Chris Carey: Hey, good morning, everyone.

Chris Carey: I wanted to ask about the durability of growth, specifically on the top line. Clearly, you're making some changes to the organization, refocusing on innovation. I do think that organic sales are being more driven by pricing. You're not alone in that type of backdrop. But as we start to glance toward fiscal 25, can you just talk about some of your own visibility and things you can do to perhaps get organic sales going again, specifically in shave and feminine care, and perhaps some of the investments you think you may need to put in place in order to make that outcome achievable, specifically given some of the margin strength that you've seen year-to-date? Thank you.

Speaker Change: Morning. Morning, Chris.

Chris Carey: I wanted to ask about durability of growth, specifically on the top line.

Speaker Change: Clearly you're making some

Speaker Change: changes to the organization, refocusing on innovation. I do think that organic sales is being more driven by pricing, you're not alone, and that type of backdrop.

Speaker Change: But as we start to glance toward fiscal 25...

Speaker Change: Can you just talk about some of your own visibility and things you can do to

Speaker Change: perhaps get organic sales going again, specifically in shave and feminine care, and perhaps some of the investments you think you may need to put in place in order to make that outcome achievable, specifically given some of the margin strength that you've seen year-to-date.

Dan Sullivan: Yeah, hey Chris. Good morning. It's Dan.

Dan Sullivan: Yeah, hey Chris, good morning, it's Dan. I'll start just by framing out kind of how we think about growth drivers to date and I'll let Rod talk more specifically about North America and some of the implications there. I think it's important to separate North America results from international and I'll start with international.

Dan Sullivan: I'll start just by framing out kind of how we think about growth drivers to date, and I'll let Rod talk more specifically about North America and some of the implications there. I think it's important to separate North America results from international results, and I'll start with international. We've now seen a couple of years of six-ish percent organic sales growth. This year will actually be slightly better than that, closer to seven internationally, with almost a 50-50 split of price and volume.

Rod: We've now seen a couple of years of

Rod: 6-ish percent organic sales growth. This year will actually be slightly better than that, closer to 7.

Dan Sullivan: So you're seeing both levers there drive growth. And that's all about the leadership changes we've made, about strengthening the portfolio, about investing in innovation, and then just really good execution on the ground. And so I think there is a healthy profile there with both volume and price. You're right.

Rod: [inaudible]

Rod: Profile there with both volume and price. You're right. Eventually.

Dan Sullivan: Eventually, the price becomes harder to get, and you have to rely on the role of volume. And I think in international trade, we're starting to see those dynamics play out already and feel really good about it. As we look to North America, I think you really have to look at the different categories.

Speaker Change: The price becomes harder to get and you have to rely on the role of volume.

Speaker Change: And I think in international, we're starting to see those dynamics play out already and feel really good about it. As we look to North America...

Dan Sullivan: And this is particularly true in Q4, let alone as we think to the future. We are contemplating volume growth in Q4, in FemCare and in SunCare, which is a reflection of the launch of Carefree, a bit delayed, certainly, but now scaling here in Q4, and a stronger sun season here at the back end of the year. And so as we think about the business, Yes, volume is at the core now.

Speaker Change: I think you really have to look at the different categories, and this is particularly true in Q4, let alone as we think to the future. We are contemplating volume growth in Q4, in FemCare and in SunCare, which is a reflection of

Speaker Change: The launch of Carefree, a bit delayed, certainly, but now scaling here in Q4 and a stronger sun season here on the back end of the year. And so, as we think about the business,

Dan Sullivan: I wouldn't say that that means there aren't opportunities to take price, but as we saw this year, it'll be selective, it'll be surgical, it'll be in markets where we have a strong presence and strong brands and can lead with price. You saw that in Japan, you saw that in Europe, you saw that in Mexico, so on.

Speaker Change: Yes, it is volume at the core now. I wouldn't say that that means there aren't opportunities to take price, but as we saw this year, there will be selective, there will be surgical.

Rod: They'll be in markets where we have strong presence and strong brands and can lead with price. You saw that in Japan. You saw that in Europe . You saw that in Mexico. So I think there are opportunities to continue to balance. I'll pause there and let Rod talk more about North America and innovation.

Dan Sullivan: So I think there are opportunities to continue to balance. I'll pause there, and let Rod talk more about North America and innovation. Yeah, good morning, Chris.

Rod Little: So look, the leadership changes that we announced today are really about accelerating our performance. We're going to finish here with our fourth consecutive year of growth on the top line; we've got gross margin inflecting and now positive, heading back towards the 2019 era gross margin profile within the company. So, from my perspective, we're making these leadership changes at a time when we're coming from a position of strength. We want to accelerate our progress from here and become truly high-performance, not only in top-line delivery, better innovation, faster, more disruptive things we bring to the market to drive the sales line, but I think we can do an even better job in accelerating our gross margin decrease, really tightening up our overall sales and operations planning

Rod: Yeah, good morning, Chris. So, look, the leadership changes that we announced today

Rod: are really about accelerating our performance. We're gonna finish here with our fourth consecutive year of growth on top line. We've got gross margin inflecting.

Unnamed Speaker: growth on the top line; we've got gross margin inflecting

Rod: and now positive heading back towards the 2019 era gross margin profile within the company. So, from my perspective, we're making these leadership changes at a time where we're coming from a position of strength.

Rod: And we want to accelerate our progress from here and become truly high-performing.

Rod: Not only in top-line delivery, better innovation, faster, more disruptive things we bring to the market to drive the sales line.

Dan Sullivan: But I think we can do an even better job in accelerating our gross margin decretion and really tightening up our overall sales and operations planning, our execution. Dan's uniquely positioned to work with the teams to do that, to bring commercial inputs forward.

Rod Little: Dan's uniquely positioned to work with the teams to do that, to bring commercial inputs and supply together in a way that we haven't done in this company. And with that comes, I think, significant unlocks over time and margin. So that's how we're thinking about it. And as I look forward to 25 and beyond, I think we're still confident that our algorithm holds on both the top and bottom lines. And that's what we're prepared to work to deliver as we look to 25.

Dan Sullivan: and supply together in a way that we haven't done in this company and with that comes I think significant unlocks over time in margin.

Dan Sullivan: So that's how we're thinking about it, as I look forward to 25 and beyond, I think we're still confident that our algorithm holds on both top and bottom line, and that's what we're prepared to work to deliver as we look to 25.

Operator: Okay, thank you.

Operator: Operator, next question please.

Speaker Change: Okay, thanks guys. I'll leave it there.

Speaker Change: Thanks Chris. Operator, next question please. Thank you and that comes from Peter Grom with UBS.

Bryan Adams: Morning, everyone. This is Bryan Adams. I'm on behalf of Peter Grom.

Speaker Change: Morning, everyone. This is Brian Adams. I'm for Peter Grom. Thanks for taking the question.

Operator: Thanks for taking the question. So just looking at the updated top line growth expectations for the year, you're implying a pretty similar growth rate in 4Q versus what we saw in 3Q, despite some of the easier comparisons, particularly I think it's in SHAVE and in SunCare. And I know you mentioned the return to growth in FemCare and 4Q, but I'd love to just get some color on kind of how you're thinking about growth across SHAVE and sun and skin, particularly given some of the comps. Thanks.

Brian Adams: Just looking at the updated top-line growth expectations for the year, you're implying a pretty similar growth rate in 4Q versus what we saw in 3Q, despite...

Speaker Change: some of the easier comparisons, particularly I think it's in shave and in sun care. And I know you mentioned the return to growth in femcare and 4Q, but I'd love to just get some color on kind of how you're thinking about growth across shave and sun and skin, particularly given some of the comps. Thanks.

Dan Sullivan: Yeah, good morning. It's Dan.

Dan Sullivan: Happy to take that. You're right. We're looking at about 1% growth in 4Q, which, you know, is similar to 3Q. But I think the path there is different.

Dan Sullivan: Good morning. It's Dan. Happy to take that. You're right. We're looking at about a 1% growth in 4Q, which is similar to 3Q. I think the path there is different. We are certainly anticipating continued strong performance in U.S. sun.

Dan Sullivan: We are certainly anticipating continued strong performance in the U.S. sun. We have a double-digit growth profile for our sun care business in the quarter. Remember last year we had the choppiness around the season and how it played out in 3Q and 4Q, so experiencing a bit of that on a shipment level and expecting the category to still grow mid to high single digits here as we enter the final quarter of the season. So double-digit growth profile on sun, grooming mid-single digits in line with what we have seen, and shaving slightly down, which is in line with what we have seen.

Dan Sullivan: We have a double-digit growth profile on our sun care business in the quarter. Remember last year we had the choppiness around the season.

Dan Sullivan: and how it played out in 3Q and 4Q. And so cycling a bit of that on a shipment level and expecting the category to still grow mid to high single digits here as we enter the final quarter of the season. So double-digit growth profile on Sun.

Dan Sullivan: grooming mid-single digits in line with what we have seen.

Dan Sullivan: I think the second inflection point comes in FemCare, where now we anticipate low single-digit growth coming off of declines that you would have seen in 3Q. And now that we have cycled through the execution challenges, the shelf reset challenges, a bit of buy-down on inventory, and candidly the perfect storm against launching a new brand platform, we're largely through that. Just to give everyone a data point, shelf resets this year took, on average, start to finish, about 20 weeks across FemCare. So the delays that we incurred here as we're bringing a new brand to the shelf were meaningful. We're beyond that now.

Dan Sullivan: Shave, you know, slightly down, which is in line with what we have seen. I think the second inflection point comes in FemCare, where now we anticipate low single-digit growth coming off of declines that you would have seen in 3Q. And now that we have cycled through the execution challenges, the shelf reset challenges, a bit of buy-down on inventory.

Dan Sullivan: candidly, the perfect storm against launching a new brand platform. We're largely through that. Just to give everyone a data point, shelf recess this year took on average, start to finish, about 20 weeks.

Dan Sullivan: across some care. So the delays that we incur here as we're bringing a new brand

Dan Sullivan: Now we have to scale up. Now we have to activate, but ultimately, I feel good about a low single-digit growth profile on FemCare versus the declines that you had seen. The last point I'll add for everyone is just to comment on July. Shipments for July across Edgewell were in line with our expectations, which underpins our full forecast for the quarter. July is an important month, obviously. It's our biggest month of the

Dan Sullivan: to shelf were meaningful. We're beyond that now. Now we have to scale up. Now we have to activate.

Dan Sullivan: but ultimately feel good about a low single-digit growth profile on FemCare versus the declines that you had seen. The last point I'll add for everyone is just to comment on July . Shipments for July across Edgewell were in line with our expectations.

Dan Sullivan: and what underpins our full forecast for the quarter. July is an important month, obviously. It's our biggest month of the quarter. That is some seasonal replenishments here in the U.S. happening, so feel good about how July has played out. There's obviously more work to do in the quarter, but off to a very good start in terms of solidifying the base for 4Q.

Dan Sullivan: That is some seasonal replenishments here in the U.S. happening. So I feel good about how July has played out. There's obviously more work to do in the quarter, but off to a very good start in terms of solidifying the base for forecast.

Dan Sullivan: Really helpful, Dan. Thanks.

Dan Sullivan: Really helpful, Dan. Thanks. One more quick one just on profitability. I think it's seven straight quarters now.

Speaker Change: of over 200 basis points of profitability and gross margin, even as over that time you've had volume growth kind of fluctuate here and there. So not trying to put the cart before the horse and talk about 25 too much, but how are you thinking about the ability to kind of drive?

Dan Sullivan: One more quick one just on profitability. I think it's seven straight quarters now of over 200 basis points of profitability and gross margin, even though, over that time, you've had volume growth kind of fluctuate here and there. So not trying to put the cart before the horse and talk about 25 too much, but how are you thinking about the ability to kind of drive profitability or productivity, excuse me, at this level, looking out to next year? Like, is this level a fair starting point? Or is that kind of to be determined? Thanks.

Speaker Change: profitability or productivity, excuse me, at this level looking out to next year. Like is that, is this level a fair starting point or is that kind of to be determined? Thanks.

Dan Sullivan: Yeah, it's a good question. I think what we've said, and this year certainly bears that out, that 300 basis points of tailwinds coming through a combination of productivity, price, and revenue management, and good unit economics is a pretty good proxy for how we think about the business. There will be years when productivity will overdeliver, and there might be years when price and revenue management might overdeliver, but I think that sort of 250 to 300 basis point combination of the two is a good proxy.

Speaker Change: Yeah, it's a good question. I think what we've said, and this year certainly bears that out, is

Speaker Change: 300 basis points of tailwinds coming through a combination of productivity, price and revenue management, good unit economics, is a pretty good proxy for how we think about the business. There will be years when productivity will over-deliver, there might be years when price

Speaker Change: and Revenue Management might over-deliver, but I think that sort of...

Dan Sullivan: Look, the productivity savings that this business is generating are significant. The team's focus, their ability to execute, continue to surprise us in a good way and overdeliver is meaningful, and we need that. And as Rob said earlier, we actually want to double down on that strength as we go forward and continue to generate more dry powder out of really, really good cost discipline in COGS, and we'll continue to do that.

Speaker Change: 250 to 300 basis point combination of the two is a good proxy. Look, the productivity savings that this business is generating are significant. The team's focus, their ability to execute, continue to surprise us in a good way and over deliver.

Bryan Adams: Great. I'll leave it there. Congratulations.

Operator: Thanks Bryan. Operator, next question please. Thank you. This comes from Olivia Tong with Raymond James.

Olivia Tong: Great, thanks. Good morning. I wanted to ask about the profile of what you're looking for in your next head of North America, you know, given the backdrop that we're dealing with right now and potentially some incremental challenges, at least from a macro perspective, how you're thinking about, you know, the profile of that person.

Speaker Change: Great, thanks. Good morning. I wanted to ask about the profile of what you're looking for in your next head of North America, you know, given the backdrop that we're dealing with right now.

Olivia Tong: Hey Olivia, this is Chris. Could you please repeat the question? I'm having difficulty hearing you. It's a little bit muffled.

Olivia Tong: Oh, sorry about that. Is this better? Thanks for watching. Okay, great. My question was just a better understanding of the profile of what you're looking for in your next head of North America, especially considering potentially a little bit more volatility from a macro perspective, and how you're thinking about that next person. Thank you.

Unnamed Speaker: Bless them.

Speaker Change: Yes, sir.

Rod Little: Thank you, Olivia. I thought you were going to Q4 sales in North America, so I'm glad we confirmed. Hey, look, from a North American perspective, it's the most difficult competitive market in the world in our space. All the things that are new happen here, and the big-scale players have a home base here and a home field advantage, if you will. So we're not the disruptor, historically. It's the

Rod Little: Thank you, Olivia. I thought you were going to Q4 sales in North America. So I'm glad we confirmed. Hey, look, from a North American perspective, it's the most difficult competitive market in the world in our space. All the things that are new happen here, and the big-scale players have a home base here, and it's a home-field advantage, if you will. So we're not the disruptor, historically; it's the small-nation startup. We're also not a big-scale player, and so we play in the middle of that.

Rod Little: We're also not a big-scale player, and so we play in the middle of that. As we've said before, we need to operate more like a disruptor and leverage scale where we have it. I'm very confident that we've got a great team in place in North America that can operate more and more like a disruptor. My intent with the next leader, which we started the search for, and it's already underway, is to have someone who can balance brand building and marketing but commercial execution equally as well. We have challenged categories at the moment, particularly in shave, right? Shaves have become a little more challenging.

Rod Little: As we've said before, we need to operate more like a disruptor and leverage scale where we have it. And so, as we look to the future. I'm very confident that we've got a great team in place in North America that can operate more and more like a disruptor. My intent with the next leader, which we started the search for, and it's already underway, is to have someone who can balance brand building and marketing but commercial execution equally as well. We have challenged categories at the moment, particularly in shave, right? Shaves have become a little more challenging.

Speaker Change: I'm very confident that we've got a great team in place in North America that can operate more and more like a disruptor.

Speaker Change: My intent with the next leader, which we started the search for, it's already underway, is to have someone who can balance

Rod Little: We like the position that we have. My goal is to accelerate our performance, and with that, we will need very strong commercial execution, back to demand planning, and supply match with that. When we change something in our system, it needs to be flawless. And we need to move faster on everything we do. And so the profile is going to be very balanced.

Rod Little: We like our position that we have. My goal is to accelerate our performance, and with that, it's going to need very strong commercial execution. Thank you, to supply match with that. When we change something in our system, it needs to be flawless, and do it faster and do it with better execution. So a lot of words there.

Rod Little: If anything, lean more towards outstanding commercial execution. Again, we're in a mode in this company now where we're happy with the progress we've made. We're happy with the performance we've delivered over the last couple of years. But equally, we're very unhappy with where we can go with laser consumer focus, getting all the roadblocks out of our processes to deliver and delight on what the consumer wants, and to do it faster and to do it with better execution. So there are a lot of words there.

Speaker Change: We're happy with the progress we've made. We're happy with the performance we've delivered over the last couple of years.

Speaker Change: Equally, we're very unhappy with where we can go with laser consumer focus getting all the roadblocks out of our processes to deliver and delight on what the consumer wants.

Speaker Change: and to do it faster.

Rod Little: It's very complicated to do that, but I think we have all the ingredients to do it. Eric has done a very nice job for us over the last four years. He started right as the pandemic was hitting and has done a lot of good things. So this is a time, again, from a corporate perspective, to pivot from a position of strength toward a consumer-oriented leader who's very, very commercially savvy.

Unnamed Speaker: It's very complicated to do that, but I think we have all the ingredients to do it. Eric has done a very nice job for us over the last four years. He started right as the pandemic was hitting and has done a lot of good things. So this is a time, again, from a corporate perspective, to pivot from a position of strength toward a consumer-oriented leader who's very, very commercially savvy.

Speaker Change: and to do it with better execution.

Speaker Change: So, a lot of words there. It's very complicated to do that.

Speaker Change: But I think we have all the ingredients to do it.

Speaker Change: Eric has done a very nice job for us over the last four years. He started right as the pandemic was hitting.

Olivia Tong: I got it. That's helpful. And then since you set me up on Q4 sales, it sounds like, obviously, that you mentioned that the magnitude of change on promotion will be pretty heightened in Q4. So, as you think about your level of confidence in delivering the Raised Profit Guide, despite the sales challenges, could you just talk a little bit about that in terms of, you know, you sound very good in terms of the cost savings, but it also sounds like you plan on upping the promotion level pretty substantially as we go into the next, not only in Q4, but as we head into fiscal 25 as well?

Speaker Change: Got it, that's helpful. And then since you set me up on Q4 sales...

Speaker Change: It sounds like, obviously, that you mentioned that the magnitude of change and promotion will be pretty heightened in Q4.

Speaker Change: So, as you think about your level of confidence on delivering

Speaker Change: The Raised Profit Guide Despite the Sales Challenges. Could you just talk a little bit about that in terms of...

Speaker Change: You know, you sound very good in terms of the cost savings, but it also sounds like you plan on upping the promotion level pretty substantially as we go into the next, not only in Q4, but as we head into fiscal 25 as well.

Rod Little: Yeah, I think as we look to Q4, Olivia, we're very confident with the guide we put out there. We've got a good line of sight to it, as Dan mentioned, we've got July sales in. We know what we have on some of the spend lines, and so I think it's a prudent call to take the guide on EPS to $3. I'll let Dan talk about promotional spend. I will tell you the summary level is the promotional spend levels we think require to be competitive in the market are contemplated in the guide. Yeah, that's the punchline.

Unnamed Speaker: Yeah, I think as we look to Q4, Olivia, we're very confident with the guide we put out there. We've got the line of sight to it, as Dan mentioned, we've got July sales in, we know what we have on some of the spend lines, and so I think it's a prudent call to take the guide on EPS to $3. Yeah, that's the punchline.

Dan Sullivan: Yeah, I think as we look to Q4, Olivia, we're very confident with the guide we put out there. We've got good line of sight to it, as Dan mentioned, we've got July sales in, we know what we have on some of the spend lines, and so I think it's a prudent call to take the guide on EPS to $3.

Speaker Change: I'll let Dan talk the promotional spend. I will tell you summary level is the promotional spend levels we think require to be competitive in market are contemplated in the guides.

Dan Sullivan: You hit it well, Rod. As we unpacked the margin profile, Olivia, we've got a good line of sight on productivity savings. Equally, we've got a good line of sight on the step up in promotions. We saw that in 3Q. We've modeled it in 4Q. So I think to summarize Rod's point, really, really comfortable with the overall profit picture for the fourth quarter and certainly emboldened by what we see as a solid July in line with what we had a year ago.

Unnamed Speaker: You hit it well, Rod. As we unpack the margin profile, Olivia, we've got a good line of sight on productivity savings. Equally, we've got a good line of sight on the step up in promotions. We saw that in 3Q. We've modeled it in 4Q. So I think to summarize Rod's point, really, really comfortable with the overall profit picture for the fourth quarter and certainly emboldened by what we see as a solid July in line with what we had expected.

Dan Sullivan: Yeah, that's the punchline. You hit it well, Rod. As we unpack the margin profile, Olivia, we've got a good line of sight on productivity savings. Equally, we've got a good line of sight on the step-up in promotions. We saw it in 3Q. We've modeled it in 4Q. So, I think, to summarize Rod's point,

Speaker Change: Really, really comfortable in the overall profit picture for the fourth quarter and certainly emboldened by what we see as a solid July in line with what we had expected.

Olivia Tong: Great, thank you. I'll pass it on.

Operator: All right, thanks, Olivia. Operator, next question, please.

Operator: Great. Thanks, Olivia. Operator, next question, please.

Speaker Change: Great, thank you, I'll pass it on.

Dara Mohsenian: Thank you, and the next question is from Dara Mohsenian with Morgan Stanley.

Speaker Change: Great, thanks Olivia. Operator, next question please. Thank you and the next question is from Dara Mohsenian with Morgan Stanley .

Operator: Hey guys, good morning.

Dara Mussanian: Hey guys, good morning. Two things on my end. With the organization and management changes, is there a focus on yielding greater productivity as a result of those changes? I know it's a focus in general.

Dara Mussanian: as you discussed earlier in the call. But is there anything incremental we should expect on that front? And then second, just as you think about marketing levels.

Speaker Change: Are you comfortable with levels in your share of voice where it is today? How do you think about that looking forward after this year? Thanks.

Dara Mohsenian: Two things on my end. With the organizational and management changes, is there a focus on yielding greater productivity as a result of those changes? I know it's a focus in general.

Dara: Dara, I'll start and then focus on the leadership changes.

Darrell: and then let Dan take the marketing levels and A&P piece. What the leadership changes, as I indicated a little bit earlier, are being done, in my view, from a position of strength.

Rod Little: take us to the next level of a truly high-performing company that ultimately commands a higher multiple. In simple terms, that's the objective. And so with that, there are two elements to that. The first element is around sales growth acceleration. I'm driving faster organic top line growth. I think we've been pretty consistent.

Speaker Change: Sales Growth Acceleration.

Rod Little: We've been on an algorithm, on average, if you take our last four years and kegger that out, we want to continue to do that, and even over time, accelerate and be at the top end of the algorithm. So this is all about me personally putting my focus more on the North American market, which is the battleground, and it's the profit pool of our company. And it's me putting more of my focus on innovation and unlocking the innovation capabilities in this company. So that is the ultimate priority.

Dan Sullivan: We've been on algorithm on average if you take the last four years and check that out.

Dan Sullivan: and be at the top end of the algorithm. So this is all about me personally putting my focus more on the North American market, which is the battleground, and it's the profit pool of our company. And it's me putting more of my focus on innovation.

Dan Sullivan: our ability to unlock even faster gross margin accretion.

Dan Sullivan: There's always room to trim and be more efficient. We'll continue to look at it and do that, but there's nothing more implied there. And then I think importantly, to complete the play, to give band capacity to do that.

Unnamed Speaker: Yeah, and then to finish the point on AMP, look, I think that the questions you're asking Dara are good ones and are directly related, right? What you heard Rod say is, we want more, and we want it faster. And that is what we are after. And part of the reason we want more is because we want more dry powder to invest in this business. It's not all about AMP.

Dara Mohsenian: , and we had a couple of questions that were discussed earlier in the call, but is there anything incremental we should expect on that front? And then second, just as you think about marketing levels, A&P is down year-to-date, it was down last year, and it's down since pre-COVID-19. That's at odds with what we're seeing from peers in the industry. So just how do you think about the next couple of years here, if you need to, comfortable with levels and your share of voice where it is today? How do you think about that looking forward after this year? Thanks.

Dara Mussanian: Yeah, and then to finish the point on A&P, look, I think that the questions you're asking, Dara, are good ones and are directly related, right? What you heard Rod say is we want more and we want it faster, and that is what we are after.

Rod Little: Dara, I'll start and then focus on the leadership changes, and then let Dan take the marketing levels and A&P piece. The leadership changes, as I indicated a little bit earlier, are being done, in my view, from a position of strength to take us to the next level of a truly high-performing company that ultimately commands a higher multiple. In simple terms, that's the objective. And so with that, there are two elements to that. The first element is around sales growth acceleration. I'm driving a faster organic top line. I think we've been pretty consistent.

Rod Little: We've been on an algorithm, on average, if you take our last four years and kegger that out, we want to continue to do that, and even over time, accelerate and be at the top end of the algorithm. So this is all about me personally putting my focus more on the North American market, which is the battleground, and it's the profit pool of our company. And it's me putting more of my focus on innovation and unlocking the innovation capabilities in this company. So that is the ultimate priority. To give me capacity and bandwidth to do that, Dan steps up and takes on more. Japan and China no longer report to me.

Rod Little: They're going to report into Dan with the rest of International, and supply chain is going to slide into Dan away from me around really what I hope is our ability to unlock even faster gross margin accretion. Cost productivity in the COGS world will remain a priority, and we will remain very efficient with our G&A spend. I don't contemplate any big G&A programs, for example.

Unnamed Speaker: There's R&D, there's innovation, there's trade spend, there's promotion. We want to be able to compete in all aspects, and more dry powder will help us do that. I would say if we look at the third quarter, we did spend at almost 12% of sales. It was not a light quarter.

Rod Little: We like the leadership structure we have. We like the organizational structure we have. There's always room to trim and be more efficient.

Rod Little: We'll continue to look at it and do that, but there's nothing more implied there. And then, I think, important to complete the play, to give Dan the capacity to do that. We're super excited to have Fran stepping up and becoming the CFO of the company. She's been with us for five years, very, very talented, and gives us the ability to unlock our time and energy to go after a higher performance.

Speaker Change: And part of the reason we want more is because we want more dry powder to invest behind this business. It's not all about A&P. There's R&D, there's innovation, there's trade span, there's pro model. We want to be able to compete.

Speaker Change: in all aspects, and more dry powder will help us do that. I would say, if we look at the third quarter,

Unnamed Speaker: And we allocated about 60 basis points of spend out of AMP and into what you would think of as gross margin trade, promo, and retail execution. We've got to continue to get that balance right. We can't evaluate the horsepower we're putting against the business simply by the AMP line.

Dan Sullivan: We did spend at almost 12% rate of sale, it was not a light quarter, and we did allocate about 60 basis points of spend out of A&P.

Unnamed Speaker: But to Rod's point, these changes are going to help us accelerate all that we're doing and unlock more value, putting us in a better place to compete whatever the market requires. Sometimes it'll be trade investment and promotion. Sometimes it'll be brand and equity, and we have to be prepared to invest in both.

Dan Sullivan: Yeah, and then to finish the point on A&P, look, I think that the questions you're asking Dara are good ones and are directly related, right? What you heard Rod say is that we want more, and we want it faster. And that is what we are after.

Dan Sullivan: But to Rod's point, these changes are going to help us accelerate all that we're doing and unlock more value, puts us in a better place to compete, whatever the market requires. Sometimes it'll be trade investment and promotion, sometimes it'll be brand and equity, and we have to be prepared to invest in both.

Great, thanks. Thank you, Dara. Great. Next question, please. Yes. And, again, just a reminder to press star, the one if you would like to ask a question. And the next question does come from Susan Anderson with Canada.

Speaker Change: Great, thanks.

Dara Mussanian: Thank you. Thank you, Dara. Operator, next question, please. Yes, and again, just a reminder to press star 1 if you would like to ask a question. And the next question does come from Susan Anderson with Canaccord Genuity.

Dan Sullivan: And part of the reason we want more is because we want more dry powder to invest in this business. It's not all about A&P. There's R&D, there's innovation, there's trade spend, there's promotion. We want to be able to compete in all areas, and more dry powder will help us do that. I would say if we look at the third quarter, we did spend at almost 12% of the rate of sale. It was not a light quarter.

Dan Sullivan: And we allocated about 60 basis points of spend out of A&P and into what you would think of as gross margin trade, promo, and retail execution. We've got to continue to get that balance right. We can't evaluate the horsepower we're putting against the business simply by the A&P line.

Dan Sullivan: Yeah, good morning Susan, it's Dan. Thanks for the question. And look, we're seeing it in drug, but also in mass, certainly in Target and Walmart. It is largely and disproportionately in women's shave and in femcare, in terms of the categories in which we compete, that's where it is most.

Dara Mussanian: for announcing it is across the board. It is promotional activity, it is BOGO activity, it is driving value to higher counts.

Dan Sullivan: It is incremental feature and display, it is price dent markdown, you're seeing it all in those categories. So it is a breadth and a depth issue that we're seeing and we're obviously reallocating our own spend to help drive that.

Speaker Change: In terms of the fourth quarter and the margin profile, you're absolutely right.

Speaker Change: We are basically not going to see any tailwinds in margin through price and revenue management in the quarter. And that is driven by the fact that we are now lapping.

Speaker Change: The pricing that's been in play here, mostly in international markets, and we're stepping up in our promotional intensity. So the margin gains that we see in the quarter, still healthy, 60 basis points.

Speaker Change: before exchange is all being driven by productivity savings with some negative offsets around inflation, capacity utilization, and NICs.

Speaker Change: I wouldn't say that's a good proxy going forward. We'll still contemplate price and the role price plays for us as we look at 2025. That's a discussion for another day, but you're right. In Q4, the gains and margin are all being driven by productivity.

Speaker Change: Okay, great. That's helpful. And then maybe if you could just talk, you mentioned that, you know, you want to be more the disruptor, I guess.

Speaker Change: Do you think that you can do that with the brands that you have now, or do you think that you need more brands, such as, say, like Ability, that add newness and differentiation to the portfolio, I guess?

Speaker Change: How are you thinking about kind of that portfolio longer term? You know, do you expect to kind of tap on any new brands or, you know, is it really just kind of new product innovation?

Dan Sullivan: But to Rod's point, these changes are going to help us accelerate all that we're doing and unlock more value, putting us in a better place to compete whatever the market requires. Sometimes it'll be trade investment and promotion. Sometimes it'll be brand and equity, and we have to be prepared to invest in both.

Dara Mohsenian: Great, thanks. Thank you, Dara. Great. Next question, please. Yes. And, again, just a reminder to press the star on the one if you would like to ask a question. And the next question comes from Susan Anderson with Canada.

Susan: Good morning, Susan.

Operator: Hi, good morning. Thanks for taking my question. I guess maybe just to follow up on the promotional activity. I'm just curious, is this, I mean, you mentioned the drug channel, I think, being the worst in the US? Are you also seeing that at Walmart and Target? I think they've both announced lower prices. And then also, how should we think about that impact on the gross margin? It looks like to get to the year guidance, the fourth quarter is going to be about slavish. I guess I'm just curious how much of that is kind of pricing rolling off versus the higher promotion?

Susan: Look, I think we like our portfolio we have today. I think it's much, much better, much stronger than it was a few years ago with the four acquisitions we've done. We look at all four acquisitions as being successful, integrated into the company, and being part of the growth story here.

Susan Anderson: Yeah, good morning, Susan and Stan. Thanks for the question. And look, we're seeing it in drug but also in mass, certainly in Target and Walmart. It is largely and disproportionately in women's shave and in femcare in terms of the categories in which we compete. That's where it is most pronounced, and it is across the board.

Dan Sullivan: It is promotional activity. It is BOGO activity. It is driving value to higher counts. It is incremental feature and display. It is price, and debt markdown. You're seeing it all in those categories.

Dan Sullivan: So it is a breadth and depth issue that we're seeing, and we're obviously reallocating our own spend to help drive that. In terms of the fourth quarter and the margin profile, you're absolutely right. We are basically not going to see any tailwinds in margin through price and revenue management in the quarter. And that is driven by the fact that we are now lapping the pricing that's been in play here, mostly in international markets, and we're stepping up our promotional intensity.

Dan Sullivan: So the margin gains that we see in the quarter, still healthy, 60 basis points before exchange, are all being driven by productivity savings with some negative offsets around inflation, capacity utilization, and NICs. I wouldn't say that's a good proxy going forward. We'll still contemplate price and the role price plays for us as we look at 2025, but that's a discussion for another day. But you're right, in Q4, the gains in margin are all being driven by productivity.

Susan: And we have learned from the founders that have started those brands and in all cases came along with us.

Susan: and are still friendly with the company, if not still in the company, friends of the company and helping us shape how we think about brand development, how we think about what speed looks like and breaking down barriers to move fast.

Susan: And so, look, I think we have lots of room within our portfolio to grow. We don't have a portfolio problem.

Susan: We like the categories we play and we like the brands we have. Equally, there is an opportunity to enhance or develop even faster growth over time with more disruptive brands potentially being in the portfolio.

Susan: We said the bar is very, very high for that. We're not looking to go deploy capital proactively towards addressing holes in the portfolio.

Susan: But if things come up...

Susan: that we feel like we can create value with, of course, we'll look at them, but we're very happy with the portfolio that we have. I would also just end on.

Susan: on saying, I think, we like our ability to acquire and integrate and halo the broader company with capability builds. And one I'll give you, just as a hard example, the team that runs Billy Direct-to-Consumer

Susan: runs the whole company direct-to-consumer platform.

Susan: and that has given us a very different level of capability as we think about activating our brands in an omnichannel world. So this is as much about capability as it is brand portfolio. And we're seeing the benefits from that in many, many areas.

Speaker Change: So, hope that helps. Yeah, that's a really helpful thing. If I could just maybe add one more. I'm just curious on the private label raisers, if you've seen that, you know, kind of grow at all? Are you seeing kind of more consumers flock towards that area, just given the value there?

Speaker Change: I think we're seeing private label razor shares overall be relatively stable.

Speaker Change: Our private label business is good, it's doing what we expected it would do.

Speaker Change: And so from here, I would say stable. And I think the other thing that's happening, brands that are well-positioned, well-architected in the value price point are winning.

Speaker Change: and Billy, for example, up 180 basis points in share in the last quarter and in growing share period on period. So it's not only private label, it's well-architected value brands that are benefiting in this environment.

Speaker Change: Okay, great. Thanks so much. Good luck the rest of the year.

Speaker Change: Thank you. Thanks, Susan. Operator, next question, please. Actually, there are no questions at the present time. We would like to return the floor to Rod Little, CEO, for any closing comments.

Susan Anderson: Okay, great. That's helpful.

Susan Anderson: And then maybe, if you could just talk, you mentioned that, you know, you want to be more of a disruptor. I guess, you know, do you think that you can do that with the brands that you have now, or do you think that you need more brands, such as, say, Ability, that adds newness and differentiation to the portfolio? I guess, how are you thinking about kind of that portfolio longer term? You know, do you expect to kind of tap into any new brands or, you know, is it really just kind of new product innovation?

Rod Little: Yeah, good morning, Susan. Look, I think we like our portfolio we have today. I think it's much, much better, much stronger than it was a few years ago with the four acquisitions we've done. We look at all four acquisitions as being successful, integrated into the company, and being part of the growth story. And we have learned from the founders that started those brands, and in all cases, came along with us and are still friendly with the company, if not still in the company, friends of the company, and helping us shape how we think about brand development, how we think about what speed looks like, and breaking down barriers to move fast. And so, look, I think we have lots of room within our portfolio to grow. We don't have a portfolio problem.

Rod Little: We like the categories we play in, and we like the brands we have. Equally, there's an opportunity to enhance or develop even faster growth over time with more disruptor brands potentially being in the portfolio. But we said the bar is very, very high for that. We're not looking to deploy capital proactively towards addressing holes in the portfolio.

Rod Little: But if things come up that we feel like we can create value with, of course, we'll look at them, but we're very happy with the portfolio that we have. I would also just end by saying I think we like our ability to acquire and integrate and halo the broader company with capability builds. And one I'll give you just as a hard example, the team that runs Billy Direct-to-Consumer runs the whole company's direct-to-consumer platform.

Rod Little: Thank you all for your time today, your continued interest and investment. We look forward to talking to you next quarter as we wrap the fiscal year and give a guide for what's ahead. Thank you.

Rod Little: And that has given us a very different level of capability as we think about activating our brands in a non-retail world. So this is as much about capability as it is about brand portfolio. And we're seeing the benefits from that in many, many areas. Yeah.

Susan Anderson: Yeah, that's a really helpful thing. If I could just maybe add one more, I'm just curious about the private label raisers. If you've seen that, you know, kind of grow at all, or are you seeing kind of more consumers flock to that area, just given the value there?

Rod Little: I think we're seeing private label razor shares overall be relatively stable. Our private label business is good. It's doing what we expected it would do. And so from here, I would say stable.

Rod Little: And I think the other thing that's happening is brands that are well positioned, well architected at the value price point are winning. Billy, for example, up 180 basis points in share in the last quarter, and growing share period on period. So it's not only private label; it's well architected value brands that are benefiting.

Susan Anderson: Okay, great. Thanks so much. Good luck the rest of the day.

Operator: Operator, next question, please? Actually, there are no questions at the present time.

Rod Little: We would like to return the floor to Rod Little, CEO, for any closing comments. Thank you all for your time today, your continued interest, and investment. We look forward to talking to you next quarter as we wrap up the fiscal year and give a guide for what's ahead. Thank you. Thank you, and as mentioned, the conference has now concluded.

Operator: Thank you. As mentioned, the conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

Speaker Change: Thank you. And as mentioned, the conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

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Speaker Change: [inaudible]