Q2 2025 The Clorox Co Earnings Call - Q&A

February 3, 2025

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Lisa: I would now like to introduce your host for today's conference call Ms. Lisa <unk>, Vice President of Investor Relations for the Clorox company.

Speaker Change: MS. <unk> you may begin your conference.

Speaker Change: Thanks, Jen good afternoon, and thank you for joining US joining me today are Linda Randall, our chair and CEO, Kevin Jacobsen, our CFO and look ballet art treasurer and incoming CFO.

Speaker Change: I hope everyone has had a chance to review our earnings release and prepared remarks, both of which are available on our website.

Speaker Change: In just a moment Linda will share a few opening comments and then we'll take your questions.

Speaker Change: During this call we may make forward looking statements that are based on management's current expectations, but may differ from actual or outcome. In addition, these remarks made to certain non-GAAP financial measures.

Speaker Change: Please refer to our earnings release, which identifies various factors that could affect forward looking statements and provides information that reconciles non-GAAP financial measures to the most directly comparable GAAP measures. The risk factors section of the company's Form 10-K. Also includes further discussion of forward looking statements now ill turn it over to Linda.

Linda: Thank you for joining us today before we start the Q&A I think you all know that we announced a CFO transition last week.

Linda: I want to take a moment to thank Kevin for his nearly 30 years with Clorox. He has been an essential change agent to our ignite strategy in transforming our company.

Linda: Deeply appreciate his partnership leadership and countless contributions to clocks and I wish him the very best in his retirement later this year.

Linda: I also want to welcome look Palais as he steps into the role of CFO starting on April 1st Luca.

Linda: Look as a strong and experienced leader, who I've worked with in many roles over my career Clorox and I'm confident he'll build on the strong foundation established by Kevin.

Linda: With that Kevin will take your questions.

Linda: Yeah.

Linda: Okay.

Linda: Thank you.

Linda: At this time, we will conduct a question and answer session. If you would like to ask a question. Please press star one on your Touchtone pad.

Speaker Change: And our first question today will come from Andrea Teixeira with Jpmorgan.

Linda: Okay.

Linda: And Mr. <unk> Your line is open.

Linda: Okay.

Linda: Andrea.

Linda: If youre speaking we cannot hear you.

Linda: Yes.

Linda: John let's move on to the next.

Speaker Change: Q&A person and then we'll come back to Andre. Thank you. Our next question will come from Dara <unk> with Morgan Stanley.

Linda: Okay.

Dara: Hey, good afternoon guys.

Linda: Yeah.

Linda: Hi, Dara.

Linda: Yes.

Linda: So congrats to Kevin and look.

Linda: Maybe first was just hoping to give your perspective on your ability to continue to drive gross margin expansion beyond fiscal 'twenty five your forecast to get back to near peak levels based on your guidance.

Speaker Change: How confident are you in continued expansion over time.

Linda: And then B what are the longer term drivers.

Linda: And then.

Speaker Change: Maybe I'll come back with one other.

Speaker Change: Yes, let me start there on gross margin expansion as we look forward.

Speaker Change: As we've talked Lyndon I for quite a while our first priority has been to fully rebuild gross margins back to 44% and it was.

Speaker Change: Im sorry, Im sure you saw in our prepared remarks, we feel very confident our ability to do that this year and we really want to get back to you as an building EBIT margins in that 25 to 50 basis points per year going forward.

Speaker Change: Your question was how confident we feel about that I feel very good sitting here today about our ability to continue to do that and there is.

Speaker Change: There is a number of drivers I mean, as we've talked quite a bit and I'll talk about EBIT margin, maybe a little bit more than gross margin, but it certainly benefits both.

We're going to continue to drive productivity.

Speaker Change: We've got the next important phase in our transformation with our ERP conversion at the start of next year.

Speaker Change: Certainly great opportunity to drive even more productivity across the organization. So I feel good about the contribution there.

Speaker Change: And then as we've talked we've really expanded our historical cost savings, what we're calling more margin transformation, which means a lot more focus on design to value a lot more focus on net revenue management.

Speaker Change: These are all additional tools in our toolbox here, we're going to use it continue to expand margin as.

Speaker Change: So we talked about that really gives us a fuel either take to the bottom line or reinvest in the business.

We've got the next important phase in our transformation with our ERP conversion at the start of next year, that's certainly a great opportunity to drive even more productivity across the organization. So I feel good about the contribution there.

Speaker Change: But without giving an outlook for next year I feel pretty confident sitting here today about our ability to start on that 25% to 50 bps starting in fiscal year 2016, then.

Speaker Change: Our intention is to continue that going forward.

And then as we've talked we've really expanded our historical cost savings wont claymore margin transformation, which means a lot more focus on design to value a lot more focus on net revenue management.

Speaker Change: Yes.

Speaker Change: Great that's helpful and maybe switching gears Linda.

Speaker Change: On the glass JV James why did this happen now, but with this change and the strengthened financial profile in recent quarters. Maybe you can just talk about if M&A is expected to be a more important piece of the strategy going forward and.

These are all additional tools in our toolbox. So we're going to use it continue to expand margin as we talked about that really gives us the fuel either take to the bottom line or reinvest in the business.

But without giving an outlook for next year I feel pretty confident sitting here today about our ability to start on that 25% to 50 bps starting in fiscal year 'twenty six and then.

Speaker Change: And what some of the areas of opportunity you see in potentially filling in white spaces in your portfolio.

Our intention is to continue that going forward.

Speaker Change: Thanks.

Speaker Change: Sure.

Speaker Change: We're excited to assume full control of our glad business coming up a year from now and really the timing is related to the end of our agreement and both parties mutually agreed not to renew and we think this is the right time for us given the transformation thats well underway of our company our confidence in our ability to drive innovation through our enhanced capabilities across the <unk>.

Speaker Change: Great that's helpful and maybe switching gears Linda.

Speaker Change: On the glass JV each games why did this happen now, but with this change and the strengthened financial profile in recent quarters. Maybe you can just talk about is M&A is expected to be a more important piece of the strategy going forward.

Speaker Change: And what some of the areas of opportunity you see in potentially filling in white spaces in your portfolio. Thanks.

Speaker Change: And the fact that we retained the very important IP that we've worked jointly with Procter on for a number of years that sets. The foundation for that so this is the right time given the contract expiring both parties came to this conclusion when we felt fully confident in our ability to continue to drive value in this business moving forward and then to the question on M&A.

Speaker Change: Thanks.

Speaker Change: Sure.

Speaker Change: We're excited to assume full control of our glad business coming up a year from now and really the timing is related to the end of our agreements and both parties mutually agreed not sure now and we think this is the right time for us given the transformation that's underway of our company our confidence in our ability to drive innovation through our enhanced capabilities across the.

Speaker Change: No change there.

Speaker Change: In terms of we're always looking for business opportunities that can be accretive to our portfolio.

Speaker Change: We're going to do deals, though that are right for our shareholders and that we think will offer a strong return we continue to evaluate our portfolio with our board as you would expect us to on an annual basis. So no change to our priorities our uses of cash.

Speaker Change: <unk>.

Speaker Change: And the fact that we retained the very important IP that we've worked jointly with Procter on for a number of years that sets. The foundation for that so this is the right time given the contract expiring. Both parties came to this conclusion you know when we feel fully confident in our ability to continue to drive value in this business moving forward and then to the question on M&A you know no change there.

Speaker Change: And certainly having full control of this business is a great thing for us moving forward and we're excited to have it a year from now.

Speaker Change: In terms of we're always looking for business opportunities that can be accretive to our portfolio.

Speaker Change: Thank you.

Speaker Change: And our next question today will come from Peter Grom with UBS.

Speaker Change: We're gonna do deals, though that are right for our shareholders and that we think will offer a strong return we continue to evaluate our portfolio with our board as you would expect us to on an annual basis. So no change to our priorities our uses of cash.

Peter Grom: Thank you operator, good afternoon, everyone Congrats Kevin Congrats Luke.

Peter Grom: So I was hoping to just get some perspective on the organic sales outlook from here and I know there are a lot of moving pieces, but just given the wide range of 4% to 7% it.

Speaker Change: And certainly having full control of this business is a great thing for us moving forward and we're excited to have it a year from now.

Peter Grom: It seems like Theres, a lot of their own ability in terms of how you might exit the year after backing out the ERP shipment benefit can you maybe just speak to what Youre embedding in the outlook for <unk> after backing out those benefits and how should we be thinking about that exit rate as it pertains to fiscal 2020.

Speaker Change: Yeah.

Speaker Change: Thank you.

Peter Grom: And our next question today will come from Peter Grom with UBS.

Speaker Change: Thank you operator, good afternoon, everyone Congrats Kevin Congrats Luke.

Speaker Change: So I was hoping to just get some perspective on the organic sales outlook from here and I know there are a lot of moving pieces, but just given the wide range of 4% to 7% it.

Peter Grom: Yes, Peter happy to answer that and I think I might it might be helpful to talk about Q3, a little different in Q4, because theyre going to look different terms of how they play out.

Peter Grom: Let me just start with Q3 and you may have seen this in our prepared remarks, we expect from our reported sales perspective will be down mid single digits.

Speaker Change: It seems like Theres a lot of variability in terms of how you might exit the year after backing out the ERP shipment better but can you maybe just speak to what you're embedding in the outlook for <unk> after backing out those benefits and how should we be thinking about that exit rate as it pertains to fiscal 'twenty.

Peter Grom: End of about five to six points of impact related to our divestitures of Argentina and Vms.

Peter Grom: And then we've added about one point of FX headwinds now keep in mind, we started the year not expecting FX headwinds, but as we've seen the dollar continue to strengthen on the New administration, we got a <unk>.

Speaker Change: <unk>.

Speaker Change: Yeah, Peter we're happy to answer that and I think I might it might be helpful to talk about Q3, a little differently in Q4, because theyre going to look different terms of how they play out.

Peter Grom: Point headwind loaded into the back half of the year, including Q3.

Peter Grom: And as a result of that you get to the organic sales growth I'd say low single digits for Q3.

Let me just start with Q3 and you may have seen this in our prepared remarks, we expect from our reported sales perspective will be down mid single digits, that's kind of about 5% to six points of impact related to our divestitures of Argentina and Vms.

Peter Grom: But also keep in mind that includes the impact we pulled forward some new distribution, we secured at a major retailer on our Kingsford business.

Peter Grom: The retailer place the order in December we fulfilled in December but we essentially shipped ahead of consumption that will be consumed in Q3 as they do some early season merch support around the Super Bowl.

Speaker Change: And then we've added about one point of FX headwinds now keep in mind, we started the year not expecting the FX headwinds, but as we've seen the dollar continue to strengthen the new administration, we got to a point headwind loaded into the back half of the year, including Q3.

Peter Grom: So that has not shifted and we had ship closer to consumption in Q3, I would expect it to be somewhere around 2% to 4%, but since we pulled that forward I think will be around low single digits for Q3.

Speaker Change: And as a result of that you get to the organic sales growth I'd say low single digits for Q3.

Speaker Change: But also keep in mind that includes the impact we pulled forward some new distribution, we secured at a major retailer on our Kingsford business.

Peter Grom: And then Q4 to your very good point is going to be noisy, while we said the ERP transition will add 1% to two points of growth over the course of the year. It's all going to happen in Q4. So as a result, I expect organic sales growth in the fourth quarter to be somewhere between mid and high single digits.

Speaker Change: The retailer place the order in December we fulfilled it in December but we essentially shipped ahead of consumption that will be consumed in Q3 as they do some early season merch support around the Super Bowl.

Peter Grom: It's a combination of continued growth in the base business and then the impact of this temporary transition where we see increased sales. This year and then that will reverse out in the front half of next year.

Speaker Change: So that has not shifted and we had shipped close to consumption in Q3, I would expect it to be somewhere around 2% to 4%, but since we pulled that forward I think will be around low single digits for Q3.

Peter Grom: Got it that's super helpful and then not to get too technical but just on the earnings guidance. When you back out the benefit from the ERP. It seems like the guidance is entirely that but you also lowered your tax rate outlook has anything changed from an underlying basis, that's offsetting the benefit from a tax rate standpoint.

Speaker Change: And then Q4 to your very good point is going to be noisy, while we said the ERP transition, we'll add one to two points of growth over the course of the year, it's all going to happen in Q4. So as a result, I expect organic sales growth in the fourth quarter to be somewhere between mid and high single digits.

It's a combination of continued growth in the base business and then the impact of this temporary transition where we see increased sales. This year and then that will reverse out in the front half of next year.

Peter Grom: Yeah, there's a few puts and takes in plan. So to your good point. If you set aside the ERP benefit can you just talk about our base business before ERP I would highlight two benefits we've seen versus when we talked last quarter. The first is the tax benefit you highlighted which is about seven cents in the quarter and then you may have seen we have modestly reduced.

Got it that's super helpful and then not to get too technical but just on the earnings guidance. When you back out the benefit from the ERP. It seems like the guidance raise is entirely that but you also lowered your tax rate outlook. So has anything changed from an underlying basis not offsetting the benefit from a tax rate standpoint.

Peter Grom: Our supply chain inflation expectation for the year. So we're going to look a little bit of benefit there and then the flip side of that is we've added about one point of FX headwinds in the back half of the year and we've added a little bit more trade spending as were seeing some increased competitive activity in the bags and wraps category. So I describe that as a number of puts and takes but it very much keeps us on track for the year and as you.

Speaker Change: Yeah, there's a few puts and takes in plan. So to your good point. If you set aside the ERP benefit can you just talk about our base business before ERP I would highlight two benefits we've seen versus when we talked last quarter. The first is the tax benefit you highlighted which is about seven cents in the quarter and then you may have seen we have modestly reduced.

Peter Grom: You saw we just brought up the low end of our outlook before we put on top of that the impact of the ERP transition.

Peter Grom: Yeah.

Speaker Change: Thank you so much I'll pass it on.

Speaker Change: Our supply chain inflation expectation for the year. So we're going to look a little bit of benefit there and then the flip side of that is we've added about one point of FX headwinds in the back half of the year and we've added a little bit more trade spending as were seeing some increased competitive activity in the bags and wraps category. So I described that as a number of puts and takes but it pretty much keeps us on track for the year and as you.

Peter Grom: Yeah.

Speaker Change: And our next question will come from Filippo <unk> with Citi.

Filippo: Hey, good afternoon, everyone and congrats Kevin and Luke.

Filippo: Firstly, just a quick clarification on the Q2 organic sales the bead relative to your guidance was that entirely driven by king's for shipment or any size of the benefit from the kings or shipment.

Speaker Change: You saw we just brought up the low end of our outlook before he put on top of that you get back to the ERP transition.

Speaker Change: Yeah.

Speaker Change: Thank you so much I'll pass it on.

Speaker Change: Yeah, Hey, Felipe all I would say, it's a combination so as you know we thought our sales on an organic basis, we'd be down in low teens, and we were down about nine 5%.

Speaker Change: Yeah.

Speaker Change: And our next question will come from Filippo <unk> with Citi.

Filippo: Hey, good afternoon, everyone and congrats Kevin to look.

Speaker Change: Let's say if I separate the Kingsport item a lot of that was based on.

Filippo: Firstly, just a quick clarification on the Q2 organic sales the bead relative to your guidance was that entirely driven by the king for shipment or any size of the benefit from the Kinks are shipment.

Speaker Change: As we came into this year, we expected the consumer to be under pressure in category growth, which slowed in somewhere between flat and 1% to at least the front half of the year. We've been operating at the higher end of that range and that was true for Q2 as well and then we continue to make very good progress on our share growth. We had another point of share. So we're seeing good strong results from our demand creation plans.

Speaker Change: Yeah, Hey, Filippo I would say, it's a combination so as you know we thought our sales on an organic basis, we'd be down in the low teens and we were down about nine 5%.

Speaker Change: That was the primary driver and then shifting kingsford shipping in front of consumption in Q2 that was worth a little less than a point in the quarter. So.

Filippo: Let's say if I separate that kingsford item a lot of that was based on.

Speaker Change: It certainly contributed to the over delivery in Q2, but it was not the primary driver that was really the strength of the business was the primary driver.

Filippo: As we came into this year, we expected that consumer to be under pressure in category growth, which slowed in somewhere between flat and 1% to at least the front half of the year. We've been operating at the higher end of that range and that was true for Q2 as well and then we continue to make very good progress on our share growth. We had another point of share. So we're seeing good strong results from our demand creation plans.

Speaker Change: Got it that's super helpful and then bigger picture.

Speaker Change: The human and that really is Linda about theater angle.

Speaker Change: Is this increasing promotional activity more than what you would expect in like does it does it require incremental spending from you guys in the back half I think Kevin you alluded to in the gross margin question, but any thoughts on like how competitive the category can get from here and potential actions there.

Filippo: That was the primary driver and then shifting kingsford shipping in front of consumption in Q2 that was worth a little less than a point in the quarter. So.

Filippo: It certainly contributed to the over delivery in Q2, but it was not the primary driver that was really the strength of the business was the primary driver.

Filippo: Got it that's super helpful and then bigger picture.

Speaker Change: Thank you.

Speaker Change: Yeah. Thanks, Filippo maybe just take a broader comment on our categories and what we're seeing and I think you saw in the release that largely our expectations around what we expected for the categories are playing out.

Filippo: The human and that really is Linda about.

Filippo: At her angle flat is this increasing promotional activity more than what you would expect in like does it does it require incremental spending from you guys in the back half I think Kevin you alluded to in the gross margin question, but any thoughts on like how competitive the category can get from here and.

Speaker Change: And that also plays true for what we're seeing from competitive activity I.

Speaker Change: And I would include later in that so we expect it later it would be more competitive and it's in line with our expectations. So certainly promotions up it's up for us as well, but it's in line with what we expected it caused a little bit different where we are seeing more competitive activity than we originally anticipated now if you put that in perspective. This is not isn't been show of our bags and wraps for a number of years.

Filippo: Potential actions there. Thank you.

And it's something we feel really well equipped to deal with.

Speaker Change: And that also plays true for what we're seeing from competitive activity I.

Speaker Change: We grew share.

Speaker Change: Sure and glad trash in Q2, despite all of this but we are seeing some more deep discounting from a price promotion perspective, and just more dollars and from a branded competitor than we had expected.

Speaker Change: And I would include later in that so we expect it later it would be more competitive and it's in line with our expectations. So certainly promotions up except for us as well, but it's in line with what we expected. So that's a little bit different where we are seeing more competitive activity than we originally anticipated now if you put that in perspective. This is not this is a show of our bags and wraps for a number of years.

Speaker Change: Have reacted and we have addressed that and that is included in the outlook that we provided and.

Speaker Change: And again, we felt really well equipped to deal with US our innovation is resonating we're growing share, but we know the long term way to grow the bags and wraps category is not through deep discounting and price promotion, we want to make sure we're driving that through trading up consumers et cetera, and we're going to stay focused on that but in the short term, we will absolutely react to competitive pressures, we have and again we've accounted for that.

Speaker Change: And it's something we feel really well equipped to deal with.

We grew share.

So I think that the high level takeaway is mostly in line with our expectations and the only exception to that would be the trash category, we're seeing increased competitive promotions and we're handling it.

Speaker Change: Have reacted and we have addressed that and that is included in the outlook that we provided.

Speaker Change: Got it thank you so much.

Speaker Change: Thanks.

unknown: Our next question will come from Andrew <unk> with Bank of America.

Speaker Change: Hi, good morning, and good afternoon. Thank you so much for the question can you.

Speaker Change: Graduations, all sort of covenant Luke.

Speaker Change: For that so I think that you know the high level takeaway is mostly in line with our expectations and the only exception to that would be the trash category, we're seeing increased competitive promotions.

Speaker Change: You mentioned in the prepared remarks that consumer who is continuing to be choice on their spending and their shopping behavior. Just wondering if you could talk about the dynamics that you're seeing more specifically on sales across different retailers and different channels and also purchasing behavior, such as buying in larger versus smaller quantity.

Speaker Change: We're handling it.

Speaker Change: Got it thank you so much.

Speaker Change: Thanks.

Speaker Change: Our next question will come from Andrew <unk> with Bank of America.

Speaker Change: He is.

Andrew <unk>: Hi, good morning, and good afternoon, and thank you so much for the question and.

Speaker Change: And then just a follow up on the prior discussion here with lettering glaad across those categories.

Speaker Change: Congratulations also to covenant Luke.

Speaker Change: Just to clarify it sounds like you're continuing to use promotion as a primary means of gaining back market share here is that expected for the rest of the year. Thank you.

Speaker Change: You mentioned in the prepared remarks that consumer who is continuing to be choice on their spending and their shopping behavior.

Speaker Change: Wondering if you could talk about the dynamics that you're seeing more specifically.

Speaker Change: Yeah.

Speaker Change: Why don't I I stick on the litter glad for a moment just to clarify that so we are certainly are returning to a promotional environment thats more normalized are returning to that environment. We saw pre COVID-19 and that was our expectation for both glad and litter.

On sales across different retailers and different channels and also purchasing behavior, such as buying in larger versus smaller quantities.

Speaker Change: And then just a follow up on the prior discussion here with lettering glaad across those categories.

Speaker Change: But those are highly competitive categories, and we're seeing temporarily litter higher than that and right now, we're seeing glad a bit above that as well.

Speaker Change: Just to clarify it sounds like you are continuing to use promotion as a primary means of gaining back market share here is that I expect in for the Boston beer. Thank you.

Speaker Change: But I would not say that that's the only way we're driving the category. It's just our suites are a part of a suite of tools that we're using primarily focused on ensuring that we're getting the right value messaging to consumers on the benefit that our products offer in the category offers so for things like our glad with lineup.

Speaker Change: Yeah.

Speaker Change: Why don't I I stick on litter glad for a moment just to clarify that so we are certainly are returning to a promotional environment thats more normalized I'm returning to that environment, we saw pre COVID-19 and that was our expectation for both glad and litter.

Speaker Change: We offer a stronger bag, we offer a better sense, we control odor. So we're really focusing on those value added levers that we have in the trash bag to ensure that we get consumers to.

Speaker Change: But those are highly competitive categories, and we're seeing temporarily litter higher than that and right now we're seeing quite a bit about that as well.

Speaker Change: To buy those as well as innovation and glad span.

Speaker Change: A category driven by innovation for a number of years and we're continuing to do that and we're seeing all of our innovation really resonating with consumers Bahama Bliss is a great example of that and it was off to a fast start and we'll be building on that platform coming up here in the back half.

Speaker Change: No promotion plays an important role in the category, but it is not the main driver and we would see over the long term it'll continue to play the role that it always has a way to drive traffic a way to ensure that we are introducing.

Speaker Change: We control odor. So we're really focusing on those value added levers that we have in the trash bags to ensure that we get consumers.

Speaker Change: To buy those as well as innovation and glad span.

Speaker Change: Introducing innovation and making sure that consumers are reminded of the great value that glad house.

Speaker Change: And then getting to just what we're seeing from the consumer overall I would say the consumer environment has largely been steady and in line with our expectations consumers are continuing to exhibit value seeking behavior and that shows up in a number of ways and I think first and foremost I want to reemphasize that it shows up that they are looking.

Speaker Change: And for better and enhanced value in our products, which means they are trading up to innovation, which.

Speaker Change: Introducing innovation and making sure that consumers are reminded of the great value that glad house.

Speaker Change: Which is working really well for us even though it might be a trade up on a price per use basis, but we're seeing that across our categories. They want us to make their lives easier and they are willing to pay for innovation. We're also seeing it as they trade up to both larger sizes to get the very best cost per use and smaller sizes for those consumers, who may not be able to have that single outlay of cash.

Speaker Change: Depending on where they are in their pay cycles. We continue to see all of those behaviors. What we're not seeing is any material change in private label private label shares were down this quarter on the other.

Speaker Change: And for better and enhanced value in our products, which means they are trading up to innovation, which.

Speaker Change: Which is working really well for us even though it might be a trade up on a price per use basis, but we're seeing that across our categories. They want us to make their lives easier and they're willing to pay for innovation. We're also seeing it as they trade up to both larger sizes to get the very best cost per use and smaller sizes for those consumers, who may not be able to have that single outlay of cash.

Speaker Change: They're off their peak of when we were out of stock due to the cyber issue.

Speaker Change: Not seeing any material change and in fact, if you look at the three categories, where we compete most heavily with private label.

Speaker Change: They're down in share across all three of those that being in trash.

Speaker Change: And bleach and Kingsford business. So I think it's pretty steady our categories are certainly a little bit depressed given the environment, but we feel great about our brand's ability to compete not just emphasize we continue to invest strongly in our brands, we increased our percent of sales against advertising and sales promotion this year than we do.

Speaker Change: Depending on where they are in their pay cycles, we continue to see all of those behaviors.

Speaker Change: We're not seeing is any material change in private label private label shares were down this quarter on the other.

Speaker Change: They're off their peak of when we were out of stock due to the cyber issue.

Speaker Change: Not seeing any material change in fact, if you look at the three categories, where we compete most heavily with private label.

Speaker Change: Did that intentionally to remind them of the value. We continue to invest in innovation is working really well and if you look at the outcomes of that we grew share in seven of our eight categories were growing household penetration.

Speaker Change: They're down in share across all three of those that being in trash.

Speaker Change: In bleach and in our case for our business.

Speaker Change: And our consumer value metric is stronger than ever so I feel great about the position that we're in.

Speaker Change: So I think it's pretty steady our categories are certainly a little bit depressed given the environment, but we feel great about our brand's ability to compete not.

Speaker Change: Perfect. Thank you so much thanks Sarah.

Speaker Change: Just emphasize we continue to invest strongly in our brands, we increased our percent of sales against advertising and sales promotion. This year and we did that intentionally to remind them of the value. We continue to invest in innovation is working really well and if you look at the outcomes of that we grew share in seven of our eight categories were growing household penetration.

Speaker Change: Our next question will come from Camilo, Gaza ROA with Jefferies.

Speaker Change: Hi, everybody.

Speaker Change: Can you maybe just give some more details on this 1% to 2% from turning ERP on just I just don't I guess I don't understand how it works from a practical perspective is it shifting.

Speaker Change: And our consumer value metric is stronger than ever so I feel great about the position that we're in.

Speaker Change: A shift in inventory one direction or the other just one time or is it something ongoing because there is data and information you seem to.

Speaker Change: Perfect. Thank you so much.

Camilo: Our next question will come from Camilo gosh, a ruler with Jefferies.

Speaker Change: Be able to see that you think can drive a slightly faster growth.

Speaker Change: Thanks, maybe just a couple of sentences and then I'll actually turn it over to Luke who has been a key leader for us and our digital transformation and is very close to the details on that.

Camilo: Hey, everybody.

Camilo: Can you maybe just give some more details on this 1% to 2% from turning ERP on just I just don't I guess I don't understand how it works from a practical perspective is it at all.

Speaker Change: Broadly of course this ERP transition is a very important step in our digital transformation continuing to ensure that we have data and can move at the right speed with the right capabilities to enable the growth in productivity that we're driving really excited about this step and what youre going to hear from Luke is there is noise as volume moves between.

Speaker Change: A shift in inventory one direction or the other and this is just one time or is it something ongoing because there is data and information you seem to.

Speaker Change: Be able to see that you think can drive a slightly faster growth.

Speaker Change: Thanks, maybe just a couple of sentences and then I'll actually turn it over to Luke who has been a key leader for us and our digital transformation and it's very close to the details on this.

Luke: In quarters and years as we deal with us, but look why don't you go ahead and outline how we think about this and how an ERP transition works in terms of our retailers and our own planning yeah sure sounds good Linda.

Speaker Change: Broadly of course this ERP transition is a very important step in our digital transformation continuing to ensure that we have data and can move at the right speed with the right capabilities to enable the growth and productivity that we're driving really excited about this step and what youre going to hear from Luke is there is noise as volume moves between.

Luke: As a reminder, at the beginning of the year, we implemented a new ERP in Canada, which was a test markets. The launch went very well.

Luke: We did not experience any material disruption, but as you can imagine the team has been taking a lot of the learnings from these Canadian implementation.

Speaker Change: In quarters and years as we deal with as well.

Luke: Building them into our implementation plan for the U S. Now in July we're going to go live with our new ERP solution for the U S business operations that includes all of the order management and fulfillment activities for the entire business operation and we're also going to begin to transition some of manufacturing locations.

Luke: Wanted to go ahead and outline how we think about this and how an ERP transition works in terms of our retailers and our own planning yeah sure sounds good Linda.

Luke: As a reminder, at the beginning of the year, we implemented a new ERP in Canada, which was a test market. The launch went very well, we did not experience any material disruption, but as you can imagine the team has been taking a lot of the learnings from dyskinesia and implementation.

Luke: The plan is to transition all of U S location in a phased approach over a period of six months starting in July so to prepare for this transition we're working closely with our U S retail partners.

Luke: And we're in process of finalizing plans, but we're going to we're planning on shipping ahead of consumption in Q4.

Luke: And we build retail inventory levels and make sure that we maintain the product on the shelf for what we're going through the transitions. In addition, we also going to build our own inventory to be fully prepared during the transition.

Luke: Also going to begin to transition some of manufacturing locations.

Luke: One is to transition all of U S location in a phased approach over a period of six months starting in July.

Luke: So it's really the inventory build in Q4, both with retailers and.

Luke: To prepare for this transition we're working closely with our U S retail partners.

Within the company that it is going to.

Luke: And we're in process of finalizing plans, but we're going to we're planning on shipping ahead of consumption in Q4.

Luke: Reverse and products of the fiscal year.

Luke: Obviously that creates some noise and some timing impact between the fiscal year and this is what we're reflecting in the outlook.

Luke: We build retail inventory levels and make sure that we maintain the product on the shelf for what we're going through the transitions. In addition, we also going to build our own inventory to be fully prepared during the transition.

Luke: Got it well look I didn't intend to give you such a soft ball from your first question.

Speaker Change: Good afternoon congratulations.

Speaker Change: To you and Kevin as well thanks, guys I appreciate it.

Luke: So it's really the inventory build in Q4, both with retailers and.

Bonnie Herzog: And we'll move next to Bonnie Herzog with Goldman Sachs.

Within the company that it is going to.

Speaker Change: Alright, Thank you and congrats both look in carbon and low.

Luke: Reverse in the front half of the fiscal year.

Luke: Obviously that creates some noise and some timing impact between the fiscal year and this is what we're reflecting in the outlook.

Speaker Change: Look if I may just clarify everything that you mentioned I, just I definitely want to understand.

Luke: Got it well, we intend to give you such a soft ball for your first question.

Speaker Change: What you're doing with the retailers is it.

Speaker Change: Any potential rent that they can't get the products that they need is that theres. Some concern on your side just given the transition that you want to ship ahead of consumption or are they just trying to build inventories and worried about not being able to get enough product I guess I'm asking because you know thinking about the continued volatility in your business.

Luke: Good afternoon congratulations.

Speaker Change: To you and Kevin as well thanks, guys I appreciate it.

Speaker Change: And we'll move next to Bonnie Herzog with Goldman Sachs.

Speaker Change: Alright, Thank you and congrats for both moved in carbon and move.

Speaker Change: If I may just clarify everything that you mentioned I, just I definitely want to understand.

Speaker Change: I mean, I just feel like now unfortunately, there will be a lot of noise in the next few quarters. So I'm trying to think through that.

Speaker Change: What you're doing with the retailers is that to avoid any.

Bonnie Herzog: Yeah, Bonnie I'm going to jump in on this one this is a very standard way that a manufacturers go through an ERP transition. Yes. There was a period of time, where we have to shut our systems down and we have to turn on the next system and so you would see this about any business had ever done. This we tend to build up retailer inventories and our.

Speaker Change: Potential risks that they can't get the products that they need is that theres. Some concern on your side just given the transition that you want to ship ahead of consumption or are they just trying to build inventories and worried about not being able to get enough product I guess I'm asking because you know thinking about the continued volatility in your business.

Bonnie Herzog: One to account for that period, where the systems are actually physically transitioning.

Speaker Change: Like now Unfortunately, there will be a lot of noise in the next few quarters. So I'm trying to think through that.

Bonnie Herzog: And we are well within the normal range of what any manufacturer has done obviously, we've done a lot of benchmarking and given where one of the later people to transition on the ERP, we have a lot of learnings from our peers. So just re emphasizing what Luc said. This is really just a timing issue. This is just a standard procedure that everyone uses to ensure there's a.

Speaker Change: Yeah, Bonnie I'm going to jump in on this one this is a very standard way that.

Speaker Change: Our manufacturers go through an ERP transition, yes, there is a period of time, where we have to shut our systems down and we have to turn on the next system and so we you know and you would see that's about any business had ever done. This we tend to build up retailer inventories and our own to account for that period, where the systems are actually physically transitioning.

No disruption given the shutdown of one system and the bringing up of another.

Bonnie Herzog: And for US. This is just noise between quarters and years, obviously, we want to execute the transition with excellence.

Speaker Change: We're well within the normal range of what any manufacturer has done obviously, we've done a lot of benchmarking and given where one of the later people to transition on this ERP, we have a lot of learnings from our peers. So just re emphasizing what Luc said. This is really just a timing issue. This is just a standard procedure that everyone uses to ensure there's.

Bonnie Herzog: But really as we see it from a consumer perspective, our goal is to have zero impact to the consumer and this is how we manage it behind the scenes.

Speaker Change: Okay. That's definitely I appreciate that and respect that because youre right you don't want any.

Speaker Change: You know volatility for the consumer and then if I just may ask another question just is on tariffs, which are incredibly topical right now recognizing that things keep changing.

Speaker Change: No disruption given the shutdown of one system and the bringing up of another.

Speaker Change: And for US you know this is just noise between quarters and years, obviously, we want to execute the transition with excellence.

Speaker Change: Could you talk about your sourcing exposure from some of the impacted regions. I guess, you know, which part of your business do you see the most potential impact and then you know how are you planning to mitigate any potential impact and all.

Speaker Change: But really you know as we see it from a consumer perspective, our goal is to have zero impact to the consumer and this is how we manage it behind the scenes.

Speaker Change: I also want to just verify you know that's being considered or any potential tariffs being considered in your guidance. Thank you.

Speaker Change: Okay. That's definitely helpful. I appreciate that and respect that because you're right you don't want any.

Speaker Change: You know volatility for the consumer and then if I just may ask another question just is on tariffs, which are incredibly topical right now recognizing that things keep changing.

Speaker Change: Sure Hey, Bonnie it's Kevin.

Speaker Change: As you can imagine we've been evaluating this for several months now because this has certainly been topical for the last several months.

Speaker Change: And to your question. This is not in our outlook specifically, we are not baked anything and now we have a range, but we have not specifically baked in any impact from tariffs.

Speaker Change: What I might remind you and I think we've talked about this in the past has been.

I also want to just verify that's being considered or any potential terrorists being considered in your guidance.

Speaker Change: Just on the nature of our portfolio for the most part we manufacture product very close to where it's consumed so we have fairly short supply chains.

Speaker Change: Sure Hey, Bonnie it's Kevin.

Speaker Change: You can imagine we've been evaluating this for several months now because this has certainly been topical for the last several months.

Speaker Change: The other benefit for us as you might recall several years ago during all the supply chain disruptions.

Speaker Change: We've done quite a bit of work over the last few years to onshore nearshore production now at the time, we did that work is really to reduce the risk of our supply chain, but there'll be an added benefit here that it reduces our exposure to tariffs.

Speaker Change: And to your question. This is not in our outlook specifically, we are not baked anything and now we have a range, but we have not specifically baked in any impact from tariffs.

Speaker Change: What I might remind you and I think we've talked about this in the past is <unk>.

Speaker Change: So the team has been working on this we've already taken a number of actions to minimize tariffs.

Speaker Change: Just on the nature of our portfolio for the most part we manufacture product very close to where it's consumed so we have fairly short supply chains.

Speaker Change: The team is going to continue to work to do that as you know this is a very dynamic environment certainly even over the last 72 hours.

Speaker Change: The other benefit for us as you might recall several years ago during all the supply chain disruptions.

Speaker Change: So our exposure I'd say is certainly less than you would find it in many other industries or are there are companies just based on the nature of our portfolio.

Speaker Change: We will continue to work to minimize it but right now it's a little difficult to know exactly what the impact is because it's changing so dynamically I feel like we're in good shape this year to manage through it.

Speaker Change: So the team has been working on this we've already taken a number of actions to minimize terrorists.

Speaker Change: Okay I appreciate that.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: Teams are going to continue to work to do that as you know this is a very dynamic environment certainly even over the last 72 hours.

Speaker Change: Yeah.

Chris Carey: Our next question will come from Chris Carey with Wells Fargo.

Speaker Change: So our exposure I'd say is certainly less than you would find at many other industries or are there are companies just based on the nature of our portfolio.

Speaker Change: Yeah.

Speaker Change: Ron.

Speaker Change: Hi, Chris Hi, Chris.

Speaker Change: We will continue to work to minimize it but right now it's a little difficult to know exactly what the impact is because it's changing so dynamically but feel like we're in good shape this year to manage through it.

Hi, I wanted to ask two connected questions.

Speaker Change: On sales.

Speaker Change: Susan.

Speaker Change: I think number one is.

Speaker Change: Okay I appreciate that.

Speaker Change: Maybe it's a little bit what Peter was getting at or we're trying to.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: Sure.

Speaker Change: Yeah.

Speaker Change: The organic sales outlook for low single digits in fiscal Q3, Okay to Florida low single inclusive of Kingsford.

Speaker Change: Our next question will come from Chris Carey with Wells Fargo.

Speaker Change: Yeah.

Speaker Change: Ron.

Speaker Change: And that that would be sort of at the lower end of where you wouldn't want to be from a longer term perspective right.

Speaker Change: Hi, Chris Hey, Chris.

Speaker Change: I wanted to ask two connected questions.

Speaker Change: Longer term top line target.

Speaker Change: On sales.

Speaker Change: Excuse me.

Speaker Change: But when I also look at the consumption data, it's running flattish right and obviously the non tracked channels that are growing faster.

Speaker Change: I think number one is.

Speaker Change: Maybe it's a little bit what Peter was getting at.

Speaker Change: I am too.

Speaker Change: <unk>.

Speaker Change: Because there's been so much noise and so much inventory shifting.

Speaker Change: The organic sales outlook for low single digits in fiscal Q3, okay, too before but low single inclusive of Kingsford.

Speaker Change: How do you view that that low single digits from a clean perspective are you. So recapturing distribution points or do you view that as you know.

Speaker Change: And that that would be sort of at the lower end of where you wouldn't want to be from a longer term perspective right.

Speaker Change: Clean underlying number that you would extrapolate.

Speaker Change: Longer term top line target.

Speaker Change: Going forward like are you executing right now at your longer term algorithm or our category is a bit more muted right now with some of your peers have said and youre not right.

Speaker Change: But when I also look at the consumption data, it's running flattish right and obviously the non tracked channels that are growing faster.

Speaker Change: Mike.

Mike: Because there's been so much noise and so much inventory shifting.

Speaker Change: And I think those guys. So the kind of exit rate that you could be going into fiscal 'twenty six because obviously, we will have to overlay the negative impact of ERP in fiscal 'twenty. Thanks Budd.

Mike: How do you view that that low single digits from a clean perspective are you still recapturing distribution points or do you view that as you know.

Speaker Change: As the underlying run rate.

Speaker Change: Happen to make that assumption right. So it's all kind of connected to that.

Mike: Clean underlying number that you would extrapolate going forward like are you executing right now at your longer term algorithm.

Speaker Change: The second thing would be from a category perspective can you just talk about how you feel about trends in your cleaning business relative to your household business because again I think the consumption data has been a bit weaker in cleaning a bit stronger in household, but youre seeing increased promotional activity and then maybe just comment on how you see these two businesses. So thanks, so much for that sorry in China as well.

Mike: Our our category is a bit more muted right now with some of your peers have said and youre not right.

Mike: And I think this gets to the kind of exit rate that you can be at going into fiscal 'twenty, 6%. Obviously, we'll have to overlay the negative impact of ERP in fiscal 'twenty six but.

Chris Carey: Sure, Chris I think I got it but remind me if I don't get to something in your question by the time, we get to the end of this.

Speaker Change: As the underlying run rate, we're going to have to make that assumption right. So it's all kind of connected to that the second thing would be from a category perspective can you just talk about how you feel about trends in your cleaning business relative to your household business because again I think the consumption that has been a bit weaker in cleaning a bit stronger in household, but youre seeing increased promotional activity in glass.

Chris Carey: I think maybe it would be helpful. On just how we think about getting back to algorithm set the stage and then we can talk about specifically, what's going on in Q3 et cetera.

Chris Carey: But I think it's helpful to recall two things we talked about going into this year. The first that we spoke about was there was going to be noise between quarters, given the lap that we had recovering from cyber et cetera, and you're certainly seeing that play out obviously in between Q1 and Q2 and even there is still noise in Q3 and Q4 that we spoke about and then you have small things that happen like Kingsford, where retailers ship something early.

Speaker Change: And maybe just comment on how you see these two businesses. So thanks, so much for that sorry in China as well.

Speaker Change: Sure Chris.

Speaker Change: I got it but remind me if I don't get to something in your question by the time, we get to the end of this.

Speaker Change: So you know I think maybe it would be helpful. On just how we think about getting back to algorithm set the stage and then we can talk about specifically, what's going on in Q3 et cetera.

Chris Carey: So that's one it's playing out and but no no large changes to that assumption. The second thing that we spoke about was that we expected a more difficult macro environment and we saw that playing out and lower category growth rates than we would normally see so normally we see low single digits, two 2.5% and we expect it.

Speaker Change: But I think it's helpful to recall two things we talked about going into this year. The first that we spoke about was there was going to be noise between quarters, given the lap that we had recovering from cyber et cetera, and you're certainly seeing that play out obviously in between Q1 and Q2 and even there is still noise in Q3 and Q4 that we spoke about and then you have small things that happen like Kingsford, where retailers ship something early.

Chris Carey: C low low single digits, and we set about zero to one.

The good news is that's playing out with what our expectations are but what we would expect to see over the long term is getting back to those category growth rates that look more like we've experienced for many many years.

Speaker Change: So that's one that's playing out and you know, but no no large changes to that assumption. The second thing that we spoke about was that we expected a more difficult macro environment and we saw that playing out and lower category growth rates than we would normally see so normally we see low single digits, two 2.5% and we expect it to.

Chris Carey: And I think the question Mark will be for us when that happens and certainly we're seeing that across the industry, but that's really the big question. If we think about what we control in.

Chris Carey: In addition to those categories I'm, feeling really good about where we sit right now and then.

Speaker Change: Low low single digits, and we set about zero to one.

Chris Carey: And so I feel really good about our long term algorithm of 3% to 5% growth and just how we think about it is you get back to that 2% to 5% category growth.

Speaker Change: The good news is that's playing out with what our expectations are but what we would expect to see over the long term is getting back to those category growth rates to look more like we've experienced for many many years.

Chris Carey: We continue to drive share, which we certainly demonstrated over the last few quarters that we're able to do.

Speaker Change: And I think the question Mark will be for us when that happens and certainly we're seeing that across the industry, but that's really a big question. If we think about what we control.

Chris Carey: You expect benefits from things like MRM and pricing as well as the work that we're doing on our digital transformation and how that flows through in both growth and productivity and then of course, we have our professional business and our international business that we expect both to be delivering above company average growth rates and we certainly saw that again this quarter. So we.

Speaker Change: In addition to those categories I'm, feeling really good about where we sit right now.

Speaker Change: And that means I feel really good about our long term algorithm of 3% to 5% growth and just how we think about it is you get back to that two 2.5% category growth.

Chris Carey: We remain confident in the long term algorithm I think the question Mark is when will the macro environment improve when will we see our categories.

Speaker Change: We continue to drive share, which we certainly demonstrated over the last few quarters that we're able to do.

Chris Carey: Return to that more normalized growth rate and we're doing everything feasible in our power to continue to do that through innovation through investing in our and good category growth ideas as well as growing share but.

Speaker Change: You expect benefits from things like and Iran, and pricing as well as the work that we're doing on our digital transformation and how that flows through in both growth and productivity and then of course, we have our professional business and our international business that we expect both to be delivering above company average growth rates and we certainly saw that again this quarter.

Chris Carey: But that's the open question Mark and I think we all can agree the environment is certainly uncertain and volatile enough to say its not exactly easy to post when that when that transition will happen.

Speaker Change: So we remain confident in the long term algorithm I think the question Mark is when will the macro environment improve when will we see our categories.

Speaker Change: I think maybe when you talk about specific categories.

Speaker Change: Can you talk about household cleaning actually cleaning is doing incredibly well right now if.

Speaker Change: <unk> returned to that more normalized growth rate and we're doing everything feasible in our power to continue to do that through innovation through investing in our and good category growth ideas as well as growing share.

Speaker Change: If you look at the consumption trends on that business and share results, we've consistently posted share growth results in that category and.

Speaker Change: In fact, our share results are higher than they were two years ago. So it's like the cyber attack never happens.

Speaker Change: But that's the open question Mark and I think we all can agree the environment is certainly uncertain and volatile enough to say its not exactly easy to post when that when that transition will happen.

Speaker Change: We're winning and most of those segments and cleaning and the trends look good and our business is still bigger than it was.

Speaker Change: I think maybe when you talk about specific categories. You talk about household cleaning actually cleaning is doing incredibly well right now.

Speaker Change:

Speaker Change: Pre COVID-19 from a volume perspective, even after all the pricing that we took to deal with inflation. So I feel like our business and cleaning is performing just as we'd want it to be growing share growing categories. The right way innovation is really resonating with consumers whether that be innovation like send tivo, where we've reinvigorated that platform in <unk>.

Speaker Change: You look at the consumption trends in that business and share results, we've consistently posted share growth results in that category.

Speaker Change: In fact, our share results are higher than they were two years ago. So it's like the cyber attack never happens.

Speaker Change: We're winning and most of those segments and cleaning and the trends look good and our business is still bigger than it was.

Speaker Change: Bested more money at our brand new innovation that we have in those categories. So feel terrific about that as well as Chuck talked about a number of our household businesses as well, but cleaning is a real gem right now and cleaning is also playing into our strong international results and you saw the organic growth rates for international this quarter very strong again and of course cleaning is the majority.

Speaker Change: Pre COVID-19 from a volume perspective, even after all the pricing that we took to deal with inflation. So I feel like our business and cleaning is performing just as we'd want it to be you know growing share growing categories. The right way innovation is really resonating with consumers whether that be innovation like send tivo, where we've reinvigorate.

Speaker Change: Our international business and helping that too before.

Speaker Change: Yeah.

Speaker Change: There was a lot there I appreciate you entertaining that.

Speaker Change: [noise] about platform and invested more money at our brand new innovation that we have in those categories. So feel terrific about that as well as Chuck talked about a number of our household businesses as well, but Ah cleaning is a real gem right now and cleaning is also playing into our strong international results and you saw the organic growth rates for international this quarter very strong again and of course cleaning is.

Speaker Change: Yeah.

Speaker Change: Sure.

Our next question will come from Olivia Tong with Raymond James Financial.

Speaker Change: Yes.

Olivia Tong: Great Thanks, and congrats Kevin look.

Speaker Change: The first step that later, whether you could talk about the level of promotion you have embedded into the second half outlook versus what you did in first half similarly on advertising.

Speaker Change: The majority of our international business and helping that to before.

Speaker Change: Just broadly the level of flexibility that you have built into your promotional plans in case any of any other competitive battles blow up like what's happening for glad.

Speaker Change: Yeah.

Speaker Change: There was a lot there I appreciate you entertaining that.

Speaker Change: And then and then cough cold season, we've seen conclude data suggested a sort of a slower start to the season. It seems like it's picked up since then so if you could give any color on that that would be helpful. Insofar as how it helps it helps or hurts you are cleaning and disinfecting business. Thank you.

Speaker Change: Yeah.

Speaker Change: Our next question will come from Olivia Tong with Raymond James Financial.

Speaker Change: Yeah.

Olivia Tong: Great. Thanks, and congrats Kevin to move first at that later, whether you could talk about the level of promotion you have embedded into the second half outlook versus what you did in first half similarly on advertising.

Speaker Change: Sure Olivia when I start with cold and flu basically cold and flu, we always assume an average year unless we have a significant data that would help us sustain our otherwise, but it's played out largely inline with expectations and average it's been about an average cold and flu season to your point, we're seeing pockets.

Olivia Tong: And just broadly the level of flexibility that you have built into your promotional plans in case any of any other competitive battles brought up like what's happening for glad.

Olivia Tong: And then and then cough cold season, we've seen conclude data suggested a sort of a slower start to the season. It seems like it's picked up since then so if you could give any color on that that would be helpful. Insofar as how it helps helps or hurts you are cleaning and disinfecting business. Thank you.

Speaker Change: <unk> of you know things that are popping up here and there, but certainly for Q2. It was an average season and that played out in the cleaning results. If you look at the data over the last couple of weeks, it's a little bit stronger too early to say theres anything there, but we continue to assume an average for the entirety of the cold and flu season, it's going to be about what we normally expect.

Peter Grom: Sure Olivia when I start with cold and flu basically cold and flu. We we always assume an average year unless we have a significant data that would help us sustain our otherwise, but it's played out largely inline with expectations and average it's been about an average cold and flu season to your point, we're seeing pockets.

Speaker Change: Then we'll see how that plays out in Q3 coming up here.

Speaker Change: But again, our assumption continues to be on average normal cold and flu season and.

Speaker Change: And when you think about litter and we expect letter to continue so an elevated promotional environment, but that was already contemplated in our outlook no change to what the expectation was.

You know things that are popping up here and there, but certainly for Q2. It was an average season and that played out in the cleaning results. If you look at the data over the last couple of weeks, it's a little bit stronger too early to say there is anything there, but we continue to assume an average for the entirety of the cold and flu season, it's going to be about what we normally expect them and then we'll see how that plays out.

Speaker Change: As well on advertising.

Speaker Change: Art, we have heavier advertising in the back half to support innovation across our portfolio.

Speaker Change: For litter, we are launching a new heavy duty letter, which we're really excited about and we'll be spending behind that launch them and ensuring that we have great execution as we get that on shelf coming up here in Q3, and Q4, but no change to our litter plan and largely in line with expectations and what we had in the front half and.

Peter Grom: And in Q3 coming up here.

Peter Grom: And again, our assumption continues to be on average normal cold and flu season and.

Peter Grom: And when you think about litter and we expect letter to continue so an elevated promotional environment, but that was already contemplated in our outlook no change to what the expectation was.

Speaker Change: And then if you think about promotion you know maybe I'll return to the statement I made.

Speaker Change: About our financial flexibility and our ability to invest in and we're certainly able to do that as we've seen what's happened and the trash category. We feel very good given the progress we've made on restoring gross margin.

Peter Grom: As well on advertising.

Peter Grom: Aren't we have heavier advertising in the back half to support innovation across our portfolio.

Peter Grom: For litter, we are launching a new heavy duty lateral which we're really excited about and we'll be spending behind that launch them and ensuring that we have great execution as we get that on shelf coming up here in Q3, and Q4, but no change to our litter plan and largely in line with expectations and what we had in the front half.

Speaker Change: On our earnings growth that we have the financial flexibility to make investments whether that be on promotion a great innovation that we have or any competitive pressure to respond and react we certainly did that already with glad.

Peter Grom: And then if you think about promotion you know maybe I'll return to the statement I made.

Speaker Change: But feel like we're in a very very good position and have the right level of spending in to deal with what's coming our way and we've been able to make adjustments to our plan where things have been a little different certainly in the case of glad.

Peter Grom: About our financial flexibility and our ability to invest in and we're still able to do that as we've seen what's happened and the trash category. We feel very good given the progress we've made on restoring gross margin.

Speaker Change: And we feel we will be able to do that in any category that might have that competitive pressure moving forward.

Peter Grom: On our earnings growth that we have the financial flexibility to make investments whether that be in promotion a great innovation that we have or any competitive pressure to respond and react we certainly did that already with glad.

Speaker Change: Okay. Thank you so much.

Olivia Tong: Thanks Olivia.

Olivia Tong: And we'll move next to Andrea Teixeira with Jpmorgan.

Speaker Change: Thank you and congrats having them move Linda I. Appreciate you elaborated how you be seen like and you're gaining share in particular with all.

Peter Grom: But feel like we're in a very very good position and have the right level of spending in to deal with what's coming our way and we've been able to make adjustments to our plan where things have been a little different certainly in the case of glad and.

Speaker Change: You should have had in the past maybe you can kind of give us the distribution.

And we feel we will be able to do that in any category that might have that competitive pressure moving forward.

Speaker Change: Kind of piece that you had I mean I assume about you regained distribution you have said before many times.

Speaker Change: Okay. Thanks.

Peter Grom: Thanks Olivia.

Speaker Change: Regained distribution, perhaps you know if you can.

Speaker Change: And we'll move next to Andrea Teixeira with JP Morgan.

Speaker Change: Kind of comment along with innovation that you not only seen kiva, but also bringing in more transformational innovation and as you have the ERP solution now rolled out.

Thank you and congrats Scabbing and moved it means I. Appreciate you elaborated how you be seen like and you're gaining share in particular with all that.

Speaker Change: Can we see a little bit more of that.

Speaker Change: You should have had in the past maybe you can kind of give us the distribution.

Speaker Change: Distribution gain or anything that you can elaborate as you get the momentum into market share going thank you.

Speaker Change: Kind of piece that you had I mean I assume about you regained distribution you have said before many times that you've regained distributions, perhaps you know if you can.

Speaker Change: Yeah.

Speaker Change: Hi, Andrea I'm glad we got you back on.

Speaker Change: Distribution is such an important part of how we drive our business and we had talked about at the end of the year that we had fully recovered the distribution that we had lost from the cyber attack and in fact had higher levels of distribution than we did prior to that and of course that varied by business, but in aggregate we had made significant.

Speaker Change: Kind of comment along with innovation that you not only keep up but also bringing in more transformational innovation and as you have the ERP solution now rolled out.

Speaker Change: Can we see a little bit more of that.

Speaker Change: Distribution gains or anything that you can elaborate as you get the momentum into market share going thank you.

Speaker Change: <unk> progress in returning to the distribution levels right. If you look at Q2.

Speaker Change: Yeah.

Speaker Change: Hi, Andrea I'm glad we got you back on.

Speaker Change: That held true so our share of distribution and was up versus year ago, but that was inconsistent with what we saw in Q1. So I think with the headline would be distribution fully restored and now we continue to try to build distribution and share of distribution. The way that we always have like you said through innovation through bringing better consumer ideas to retailer.

Speaker Change: Obviously distribution is such an important part of how we drive our business and you know we had talked about at the end of the year that we had fully recovered the distribution that we had lost from the cyber attack and in fact had higher levels of distribution than we did prior to that and of course that varied by business, but in aggregate we had.

Speaker Change: And that's how we'll continue doing the normal distribution that we work over time, but we have fully restored what we lost during cyber and so that base is back to normalized levels and then we will do the work from here or investing in our brands and through innovation.

Made significant progress in returning to the distribution levels right. If you look at Q2.

Speaker Change: Held true so our share of distribution than was up versus a year ago, but that was inconsistent with what we saw in Q1. So I think the headline would be distribution fully restored and now we continue to try to build distribution and share of distribution. The way that we always have like you said through innovation through bringing better consumer ideas to retailers.

Speaker Change: Yeah, and then base any that's helpful. Any timing of that that you may have pushed back into the second half because of all the ERP solutions or no I mean, the cadence is similar to what you had last year.

Speaker Change: No no impact to that we have timed everything so that are not normal innovation cycle happens and that we can support retailers during their shelf transitions, so no timing impact as it relates to distribution.

Speaker Change: Thank you and the peso.

Speaker Change: <unk>.

Speaker Change: Yeah, and then base any of that's helpful. Any timing of that that you may have pushed back into the second half because of all the ERP solutions or no I mean, the cadence is similar to what you had last year.

Speaker Change: We'll hear next from Robert Moskow with TD Cohen.

Robert Moskow: Hi, Thanks, I think most of the questions have been asked and answered I.

Speaker Change: I guess I'd like a little more color on on what's driving the strong growth in professional and also international.

Speaker Change: What are the insights youre picking up from your customers in the professional channel that.

Speaker Change: Thank you and the peso.

Speaker Change: Thank you.

Speaker Change: That are driving the growth.

Speaker Change: We'll hear next from Robert Moskow with TD tailwind.

Speaker Change: And maybe just a little color on an international thanks.

Robert Moskow: Sure Robert.

Robert Moskow: Hi, Thanks, I think most of the questions have been asked and answered.

Speaker Change: International.

Speaker Change: For a number of years, we spent prior to our ignite strategy getting the rights.

Robert Moskow: I guess I'd like a little more color on on what's driving the strong growth in professional and also international.

Speaker Change: Asset base to grow from and so we've done a lot of work to clean up and ensure that we had a profitable base and when we turn to an ignite was doubling down on the growth opportunities that we saw and the primary one was to have less exposure to FX volatile countries in Latin America.

Speaker Change: What are the insights youre picking up from your customers in the professional channel that are driving the growth.

Speaker Change: Maybe just a little color on an international thanks.

Speaker Change: And businesses that we thought that had a really great one way so I'll call. It a couple of things one as I noted our cleaning business continues to perform very well all around the world and we have leading shares just like we do in the U S.

Speaker Change: Sure Robert you know in international.

Speaker Change: For a number of years, we spent prior to our ignite strategy getting the right.

Speaker Change: In countries all around the globe in many of our cleaning businesses.

Speaker Change: That base to grow from and so we've done a lot of work to clean up and ensure that we had a profitable base and when we turned to an ignite was doubling down on the growth opportunities that we saw and the primary one was to have less exposure to FX volatile countries in Latin America and businesses that we thought that had a really great one way so I'll call.

Speaker Change: In addition, we have businesses like cat litter, where we've been able to enter new markets. We've been able to do that in an asset light way and we're seeing very strong growth in our litter business in those markets that we've entered in places in Europe Places in Asia.

Speaker Change: And we've been taking advantage of that those opportunities and we see the same role that innovation and brand building players in international are.

Speaker Change: All at a couple of things one as I noted our cleaning business continues to perform very well all around the world and we have leading shares just like we do in the U S.

Speaker Change: Working just like it's working in the U S. So we have a strong suite of innovation across the globe in a number of categories that are resonating well with consumers and as well we've been able to take pricing as you notice that the only place that we continue to take pricing in.

Speaker Change: In countries all around the globe in many of our cleaning businesses.

Speaker Change: As we are dealing with different issues around the globe and pricing has gone very well. In addition, so let's say overall all the fundamentals are working really well and then we have been able to take advantage of the regional opportunities that we have you know having a more stabilized portfolio from a geographic perspective, and then the category opportunities that we have.

Speaker Change: And we've been taking advantage of that those opportunities and we see the same role that innovation and brand building players in international are.

Speaker Change: Working just like it's working in the U S. So we have a strong suite of innovation across the globe in a number of categories that are resonating well with consumers and as well we've been able to take pricing as you noticed that the only place that we continue to take pricing in.

Speaker Change: And we will see that continuing and believe it will for the coming years.

Speaker Change: Decline as office occupancy decreased in our business and professional place in a number of places we play in hospitals doctors offices and janitorial.

Speaker Change: As well as businesses like glad trash and Kingsford, but really again are primarily our cleaning business and so that was a headwind for a while but what we were confident and was the way that we've always grown in professional theres lots of verticals that we don't plan lots of opportunities for us to offer.

Speaker Change: And we will see that continuing and believe it will for the coming years.

Speaker Change: On professional you know that's an interesting business, where it had a dramatic impact during COVID-19 wanted had a dramatic upside as we dealt with hospitals and people wanting to stay safe and then it had a corresponding decline as office occupancy decreased in our business and professional place in a number of places we play in.

Speaker Change: That base, a great solution for their cleaning needs and that's exactly what's happening today. So we've made some penetration into some verticals, we're working and government verticals were working in different health care verticals and those are going very very well and we continue to see opportunity to win. In addition, we are growing share in our base business.

Speaker Change: Hospitals doctors offices and janitorial.

Speaker Change: As well as businesses like glad trash and kingsford, but really again, a primarily a cleaning business and so that was a headwind for a while but while we were confident and with the way that we've always grown in professional theres lots of verticals that we don't plan lots of opportunities for us to offer.

Speaker Change: Including in health care in janitorial and seeing businesses like our wipes et cetera take off the good news is although it hasn't been that material was starting to see I think office occupancy come back a little bit, we'll see where that goes depending on that we're not counting on that being a material driver but.

Speaker Change: But what we're really seeing is opportunities in new verticals and that's how we've grown our professional business mid single digits for a number of years prior to Covid.

Speaker Change: Okay can I ask a quick.

Speaker Change: Follow up do you have any way to quantify what percent of your raw materials come from Mexico, and Canada is it like less than 5% I know you've done a lot of work to reduce it but it's hard for us on the outside to figure out what the exposure really is.

Speaker Change: Including in health care in janitorial and seeing businesses like our wipes et cetera take off the good news is although it hasn't been that material was starting to see I think office occupancy come back a little bit we will see where that goes depending on that we're not counting on that being a material driver.

Speaker Change: Robert I'd say, it's in the single digits. So we have fairly limited exposure.

Speaker Change: But what we're really saying is opportunities in new verticals and that's how we've grown our professional business mid single digits for a number of years prior to Covid.

Speaker Change: Great. Thank you.

Speaker Change: Yeah.

Speaker Change: Our next question comes from Kevin Grundy with BNP parable.

Speaker Change: Okay.

Speaker Change: Great. Thanks, good afternoon, everyone and congratulations to Kevin and look for.

Speaker Change: First question.

Speaker Change: Just a follow up on the earlier discussion on the category growth being flat to one which seems like it's still your expectation.

Speaker Change: Robert I'd say, it's in the single digits. So we have fairly limited exposure.

Speaker Change: How do we get back to the three to five and over what timeframe and I ask that in the context of a relatively fatigue consumer.

Speaker Change: Great. Thank you.

Speaker Change: Not a lot of pricing to be had at this point some of your categories seem to be going the other way in terms of some of the intense levels of promotion. So I think it's a really important question relative to what the expectation is going to be around relative to the three to five and the company's ability to grow going forward. So Linda any additional color on that and maybe just the composition.

Speaker Change: Our next question comes from Kevin Grundy with BNP Paribas.

Speaker Change: Great. Thanks, good afternoon, everyone and congratulations to Kevin and look for.

Speaker Change: First question.

Speaker Change: Just a follow up on the earlier discussion on the category growth being flat to one which seems like it's still your expectation.

Speaker Change: Price and mix.

Speaker Change: How do we get back to the three to five and over what timeframe and I ask that in the context of a relatively fatigue consumer there's not a lot of pricing to be had at this point some of your categories seem to be going the other way right in terms of some of the intense levels of promotion. So I think it's a really important question relative to what the expectation is going to be.

Speaker Change: And volumes.

Speaker Change: Given the constrained pricing environment, and then I have a follow up thanks.

Kevin: Sure Kevin.

Kevin: First of all maybe you know how we are driving category growth right now and Youre right. It is certainly depressed as we talked about versus what we normally see in a Q and a two and a half in our categories were in zero to one and we've been at the top end of that range to the front half.

Speaker Change: Relative to the three to five and the company's ability to grow going forward. So any additional color on that and maybe just the composition of price and mix.

Kevin: What we're seeing that with volume based growth that is being somewhat offset by promotion and that's what exactly what we expected. This year is as we rolled off pricing, we expect it to return to volume growth and then we saw an offset as we expected a more competitive environment as a consumer is seeking more value and we frankly just returned to a promotional level that was what it was.

Speaker Change: And volumes.

Speaker Change: Given the constrained pricing environment, and then I have a follow up thanks.

Kevin: Sure Kevin.

Kevin: First of all maybe you know how we're driving category growth right now and Youre right. It is certainly depressed as we talked about versus what we normally see in a Q and a two and a half in our categories were in zero to one and we've been at the top end of that range to the front half.

Kevin: Covid and I think that's a healthy place to be and we certainly seen that return.

Kevin: What needs to be true to get back to our more average category growth rates, one I think the consumer needs.

Kevin: What we're seeing though is volume based growth that is being somewhat offset by promotion and that's what exactly what we expected this year because as we rolled off pricing we expect it to return to volume growth and then we saw an offset as we expected a more competitive environment as a consumer is seeking more value and we frankly just returned to a promotional level that was what it was pre.

Kevin: A needs to feel that certainty and strengthen and we've seen this time and time again whenever there is a time where consumers are a bit more stretched they do those things they they they tighten their belts.

Kevin: They think about ways to make sure that they can extend the usage of our product they stopped the trash bag. They get every last drop out of a spray cleaner, they're thinking just as ways to save every penny possible and when you get to a place where they're a little less worried about that you see them more willing to try a premium trade up product they move.

Kevin: Covid and I think that's a healthy place to be and we certainly seen that return.

Kevin: So what needs to be true to get back to our more average category growth rates.

Kevin: I think the consumer need.

Kevin: Need to feel that certainty and strengthen and we've seen this time and time again whenever there is a time where consumers are a bit more stretched they do those things they they they tighten their belts.

Kevin: From a dilutive bowl cleaner with a sponge to wipe and we've seen that time and time again as we go through these economic cycles people know how to spend a bit less than our categories that are essential. So it's not a big delta going from two and a half to one it's not a huge delta.

Kevin: But on the reverse we can really pick up that trade up as consumers start to feel that.

Kevin: That they don't have to engage in those value seeking behaviors as much as they are right now so again I feel confident once we get through the cycle that that will happen. The question Mark is when and we will do our part to ensure categories are healthy we continue to invest strong levels of advertising and promotion. We continue to be focused on innovation, we're ensuring we <unk>.

Kevin: From a dilutive bowl cleaner with a sponge to wipe and we've seen that time and time again as we go through these economic cycles, you know people know how to spend a bit less than our categories. They're essential so it's not a big delta for going from two and a half to one that's not a huge delta.

Kevin: The right distribution, we're ensuring that we're in every channel that matters to the consumer regardless of where they shop, we want to be there if they walk into a club if they walk into a mass retailer or a grocery store a drugstore, we want to be there and we are.

Kevin: But on the reverse we can really pick up that trade up as consumers start to feel that.

Kevin: That they don't have to engage in those value seeking behaviors as much as they are right now so again I feel confident once we get through the cycle that that will happen. The question Mark is one and we will do our part to ensure categories are healthy we continue to invest strong levels of advertising and promotion we continue to be focused on innovation, while ensuring we have.

Kevin: And we'll just continue to ensure that were giving consumers those opportunities with great innovation to trade up over time and I feel confident we'll get back to those category growth rates. Its just one.

Kevin: Okay, but just to put.

Kevin: That back steady state macro things don't change that much the low end of the three to five would be a good outcome, perhaps is that fair.

Kevin: Yeah, I think that's fair.

Kevin: Okay very good and then one for you.

Speaker Change: Just in terms of as you think about taking on the role and Kevin has done a fantastic job.

Speaker Change: What are you thinking in terms of opportunities right. There is always a way to do things a bit differently you have a great background, particularly on the treasury side. So anything from a capital structure perspective uses of cash buyback et cetera, we'd love to get your thoughts just in terms of what investors can expect and then and then I'll turn it back. Thank you very much.

Kevin: Okay, but just to put.

Kevin: That back to steady state macro things don't change that much the low end of the three to five would be a good outcome, perhaps is that fair.

Kevin: I think that's fair.

Speaker Change: Okay very good and then one for you.

Speaker Change: Thanks for the question, Kevin what you can expect a lot of continuing to I would say.

Speaker Change: Just in terms of.

Speaker Change: Think about taking on the role Kevin has done a fantastic job what.

Speaker Change: I've been over the past few years have been very involved in both.

Speaker Change: What are you thinking in terms of opportunities right. There is always a way to do things a bit differently do you have a great background, particularly on the treasury side. So anything from a capital structure perspective uses of cash buyback et cetera, we'd love to get your thoughts just in terms of what investors can expect and then and then I'll turn it back. Thank you very much.

Speaker Change: The.

Speaker Change: Design and implementation of the ignite strategy I've also been very involved in our transformation at fault.

Speaker Change: And so this this transition should be relatively smooth.

Speaker Change: Certainly.

Speaker Change: We're going to continue to be very consistent from a financial discipline and capital allocation I think what changed is less effective strategy of focus, but just a matter of where we were.

Speaker Change: Thanks for the question, Kevin what you can expect a lot of continuing to I would say.

Speaker Change: I've been over the past few years have been very involved in both.

Speaker Change: We're in a place where we're finally reviewed our margins to pre pandemic level, we're in a place of operational strength.

Speaker Change: The.

Speaker Change: Design and implementation of the ignite strategy I've also been very involved transformation default.

Speaker Change: Of course, a lot of the.

Speaker Change: A discussion, we're having right now already about growth and transformation.

Speaker Change: And so this this transition should be relatively smooth.

Speaker Change: We talked about the importance of focusing on the fundamentals and innovations.

Speaker Change: Certainly.

Speaker Change: In this challenging consumer environment, and I don't transformations I think we're entering a new phase that's really important I think.

Linda: Linda mentioned.

Speaker Change: We're in a place where we're finally rebuild our margins to pre pandemic level, we're in a place of operational strength.

And you.

Speaker Change: The implementation is going to perform them, Italy, modernize the backbone of operations and <unk> to really modernize analytical capabilities, which will set us up for really strengthening our competitive advantage for years to come and so.

Speaker Change: Of course, a lot of the <unk>.

Speaker Change: A discussion we're having right now are really about growth and transformation.

Speaker Change: We talked about the importance of focusing on the fundamentals and innovations.

Speaker Change: It's a big transitions first thing we have to walk before we can run and we have to make sure that the seamless but after we've done this transition there'll be a lot of opportunity to capitalize on it.

Speaker Change: In this challenging consumer environment transformations, I think we're entering a new phase that's really important I think.

Speaker Change: Okay very good thank you Bob good luck.

Linda mentioned.

Speaker Change: Thank you.

Speaker Change: And you.

Implementation is going to perform them, Italy, modernize the backbone of operations and <unk> to really modernize the medical capabilities, which will set us up for really strengthening our competitive advantage for years to come and so that.

Speaker Change: And our next question comes from Linda Bolton Weiser with D. A Davidson.

Speaker Change: Yes, Hello, best wishes to you Kevin.

Speaker Change: So I was.

Just wanted to follow on the conversation about the consumer the health of the consumer and I'm wondering if you could put a number to it more Michigan consumer sentiment is something that some of US look at is there a level that they would have to be where historically you would see that higher category growth and more confidence so would that be in the <unk>.

Speaker Change: It's a big transitions such thing we have to walk before we can run and we have to make sure that the seamless but after we've done this transition there'll be a lot of opportunity to capitalize on it.

Speaker Change: Okay very good. Thank you good luck.

Speaker Change: Thank you.

Speaker Change: And our next question comes from Linda Bolton Weiser with D. A Davidson.

Speaker Change: Do you or 90.

Speaker Change: Yes.

Speaker Change: Yes, Hello, best wishes to you Kevin.

Speaker Change: Is there any color you can give on that.

Speaker Change: No wonder it's it's an interesting avenue to take but what we've seen is it's not consistent because there are so many things that go into how consumers shop, our categories that are everyday essentials.

Speaker Change: So I was just wanting to follow on the conversation about the consumer the health of the consumer and I'm wondering if you could put a known.

Speaker Change: Number two it more Michigan consumer sentiment is something that some of US look at is there a level that they would have to be where historically you would see that higher category growth and more confidence so would that be in the 18th or 19th.

Speaker Change: And so we haven't looked at anything that is 100% correlated to saying this is when it will return, but I think it's a number of factors. It's people feeling like they have steady employment that they understand what inflation looks like.

Speaker Change: Is there any color you can give on that.

Speaker Change: That they feel confident in their ability to meet all of their liabilities.

Speaker Change: No wonder it's it's an interesting.

Speaker Change: That they are willing to open their wallet, a little more because they have that flexibility and they're not worried about what's coming but.

Speaker Change: Avenue to take but what we've seen is it's not consistent because there are so many things that go into how consumers shop, our categories that are everyday essentials.

Speaker Change: But we haven't found one marker that 100% correlates what we're watching in aggregate. It is all of those things that are going to impact the consumer.

Speaker Change: Walt and spending and certainly if you look back at things like Covid et cetera. They were different factors that played into how consumers engaged in our category and so that's why I'm hesitant to say, there's one single thing we would look at.

Speaker Change: That they feel confident in their ability to meet all of their liabilities.

Speaker Change: But you start to see in the behaviors and the good news is you know we were at the top end of what we saw from a category perspective.

Speaker Change: That they are willing to open their wallets more because they have that flexibility and they're not worried about what's coming.

Speaker Change: In the zero to one which is which is good and so we're seeing a little bit more resilience you are on the higher end of what we saw it might be a resilient from a consumer perspective, but we're gonna be watching all of those factors very carefully we'll continue to update everybody as we see things evolving over the next couple of quarters and what we think it means but I think the headline is you know near term visibility.

Speaker Change: But we haven't found one marker that 100 per cent correlates what we're watching in aggregate. It is all of those things that are going to impact the consumer and their wallet and spending and certainly if you look back at things like Covid et cetera. They were different factors that played into how consumers engaged in our category and so that's why I'm hesitant to say, there's one single thing we would look at but you start.

Speaker Change: Good longer term.

Speaker Change: To state the behaviors and the good news is we were at the top end of what we saw from a category perspective in the zero to one which is which is good and so we're seeing a little bit more resilience you're on the higher end of what we saw might be resilient from a consumer perspective, but we're gonna be watching all of those factors very carefully we'll continue to update everybody as we see things evolving over the next.

Speaker Change: It's not 100% clear right now, but we remain confident in the long term it'll bounce back and we will be watching all those things, including consumer confidence score to glean when that might happen.

Speaker Change: Yeah.

Speaker Change: Thanks, and then can I just ask also about your investment.

Speaker Change: Spending, which is I guess about 70 cents per share in the fiscal year can you remind us the trajectory of when that starts to taper off as the peak year of spending or and you know and how long does it continue and is there a year when it becomes zero.

Speaker Change: A couple of quarters and what we think it means but I think that the headline is you know near term visibility good longer term.

Speaker Change: Yeah sure Linda this is Kevin in regard to our digital transformation and you might recall, if I step back our expectation is we will invest $560 million to $580 million over a five year period. We are in your four of that investment.

Speaker Change: Yeah.

Speaker Change: Thanks, and then can I just ask also about your investment.

Speaker Change: As you said about 70 cents, we will spend this year that'll put us just a little over $500 million I anticipate by the end of this year. So next year will be the final year of the program you should expect the investment level to be less than this year as we start to wind down the program and then after fiscal year 'twenty six we would have completed the program and there wouldn't be any charge.

Speaker Change: Yeah sure Linda this is Kevin in regard to our digital transformation you might recall, if I step back our expectation is we will invest $560 million to $580 million over a five year period. We are in your four of that investment.

Speaker Change: Okay. Thanks, a lot thanks.

Speaker Change: Linda.

Speaker Change: And our next question will come from Javier Escalante with Evercore ISI.

Speaker Change: As you said about 70 sense, we'll spend this year that'll put us just a little over $500 million I anticipate by the end of this year. So next year will be the final year of the program you should expect the investment level to be less than this year as we start to wind down the program and then after fiscal year 2006, we would have completed the program and there wouldn't be any charge.

Javier Escalante: Good afternoon, everyone. My question has to actually also with SG&A you're spending on.

Javier Escalante: You Itemized. This do you think capabilities ERP is the same thing or not.

Javier Escalante: Two different kind of spending.

Speaker Change: Okay. Thanks, a lot thanks.

Javier Escalante: Something that stood out from one of your peers is out there doing that and upgrade to the same SAP system that you are.

Speaker Change: Linda.

Speaker Change: And our next question will come from Javier Escalante with Evercore ISI.

Javier Escalante: Operating too.

Speaker Change: Good afternoon, everyone. My question has to actually also with SG&A, you're spending on you itemize these data capabilities.

Javier Escalante: And the price tag is much lower.

Javier Escalante: 550 <unk>.

Javier Escalante: $80 million is kind of like a law.

On.

Speaker Change: Is this the same thing or not are these two different kind of spending.

Javier Escalante: I always have stumbled upon why is it this is too expensive and what is your confidence that one.

Javier Escalante: <unk>.

Speaker Change: Something that stood out from one of your peers is out there doing an upgrade to the same SAP system that you are.

Javier Escalante: You stop accruing this.

Javier Escalante: One timers, whether your underlying SG&A. Thank you.

Operating too.

Javier Escalante: Yeah, I think let me take the first part and then I'll hand, it over to Kevin to talk about your specific question on SG&A, but Javier what we're doing with this implementation is fundamentally upgrading the backbone and technology capabilities of the company and the last time, we made an ERP transition was well over <unk>.

Speaker Change: And the price tag it's much lower.

Speaker Change: 350, and $580 million is kind of like a law.

Speaker Change: And I always has stumbled upon why is it this is too expensive and what is your confidence that.

Speaker Change: One zero.

Kevin: 20 years ago, and I'm not sure what the cases for a number of our peers, but we're doing a full implementation greenfield upgrading to as for Hana. In addition to that we are putting in global finance, we're putting capabilities around innovation, we've invested in AI, we've invested in ensuring that we have an accurate data lake so that we can.

Speaker Change: You stop.

These one timers what is your underlying SG&A. Thank you.

Speaker Change: Yeah, I think let me take the first part and then I'll hand, it over to Kevin to talk about your specific question on SG&A, but Javier what we're doing with this implementation is fundamentally upgrading the backbone and technology capabilities of the company and the last time, we made an ERP transition was well over two.

Kevin: Fully capitalize on the power of that data through insight. So this is a comprehensive digital overhaul of the company to catch us up to where our capabilities are in the industry and the good news is we have taken the steps to fully do that so we are changing the processes in the company as you know we put a new <unk>.

Speaker Change: Eight years ago.

Speaker Change: I'm not sure what the cases for a number of our peers, but we're doing a full implementation greenfield upgrading to as Farzana. In addition to that we are putting in global finance, we're putting capabilities around innovation, we've invested in AI, we've invested in ensuring that we have an accurate data lake. So that we can fully capitalize on the power.

Kevin: Operating model to fully take advantage of this digital transformation in place, but this really is about modernizing the capabilities and data infrastructure and backbone of the company and again I can't speak to someone else's transformation.

Speaker Change: That data through insight. So this is a comprehensive digital overhaul of the company to catch us up to where our capabilities are in the industry and the good news is we have taken the steps to fully do that so we are changing the processes in the company as you know we put a new operating model to fully take advantage.

Kevin: But that's the cost of doing that and we feel very confident that this has a strong return for our shareholders. We wouldn't have invested in and if it didn't.

Kevin: That comes in the form of enhancing growth as well as productivity and.

Kevin: And we have owners for each one of those line items, who are accountable to delivering that value, but we feel this is a great program for our company as Luc mentioned for our future and the things that we can continue to unlock as a result of having this digital infrastructure in place.

Speaker Change: Of this digital transformation in place, but this really is about modernizing the capabilities and data infrastructure and backbone of the company and again I can't speak to someone else's transformation.

Kevin: And we're going to do that with a strong return focus in mind that we intend to deliver and have been delivering today.

Speaker Change: But that's the cost of doing that and we feel very confident that this has a strong return for our shareholders. We wouldn't have invested in and if it didn't and that comes in the form of enhancing growth as well as productivity and.

Javier Escalante: And then Javier I can just talk a little bit about the admin as you might recall before this transformation. We've historically operated about 14% admin as a percent of sales.

And we have owners for each one of those line items, who are accountable to delivering that value, but we feel this is a great program for our company as Luc mentioned for our future and the things that we can continue to unlock as a result of having this digital infrastructure in place.

Javier Escalante: This year will be closer to that 15% to 16%. That's really that investment is digital transformation lenders just talking about now the benefit of this is we believe between the investments, we're making a new technology plus our streamlined operating model, we believe that positions us to take admin down closer to 14%.

Speaker Change: And we're going to do that with a strong return focus in mind that we intend to deliver and have been delivering today.

Javier Escalante: Sales going forward.

Speaker Change: And then Javier I can just talk a little bit about the admin.

Javier Escalante: Take a little time to get there as we implement the new technology, and then drive the productivity associated with that but this really just creates more investment opportunities for us as a company as we become more productive on the admin line based on these investments we could either take that to the bottom line or if we have good investments reinvest that back into the company believe believe we are positioned very well, though to do that as we look forward over the next.

Speaker Change: I recall before this transformation, we've historically operated about 14% admin as a percent of sales.

Speaker Change: This year will be closer to that 15% to 16%. That's really that investment is digital transformation lenders just talking about now the benefit of this is we believe between the investments, we're making a new technology plus our streamlined operating model, we believe that positions us to take admin down closer to 13%.

Couple of years.

But mathematically do your assumption to get to 13% has to do with heating 5% topline growth. So how would you get to 13%.

Speaker Change: Sales going forward.

Speaker Change: Take a little time to get there as we implement the new technology and drive the productivity associated with that but this really just creates more investment opportunities for us as a company as we become more productive on the admin line based on these investments we could either take that to the bottom line or if we have good investments reinvest that back into the company believe believe we are positioned very well go to do that as we look forward over the next.

Javier Escalante: As a percentage of revenues once you have.

Javier Escalante: More depreciation in the P&L probably people that.

Javier Escalante: Has higher salaries.

Speaker Change: Yes, Javier I think it gets to exactly what Linda mentioned, we expect to deliver very strong value on this investment we have a very clear business case, where value will be created and so we have owners reached these areas, we're putting in new technology and replacing a 20 year old system. There is tremendous opportunity to drive additional value through that increased technology and so.

Speaker Change: Couple of years.

Speaker Change: But mathematically do your assumption to get to 13% has to do with heating 5% topline growth. So how would you get to 13%.

Speaker Change: As a percentage of revenues once you have.

Speaker Change: We will deliver that business case, I think that positions us well to take costs out.

Speaker Change: More depreciation in the P&L probably people that.

Speaker Change: Keep in mind right now, we're maintaining our admin line, we're maintaining two system infrastructures I'm paying for our legacy system and we're paying for a new system. Once you do this conversion, we're going to be able to shut off the legacy system and Youll see cost start to come out in the back half of next year and then we will continue to drive productivity take that down even further going forward.

Speaker Change: Has higher salaries.

Speaker Change: Yes, Javier I think he gets to exactly what Linda mentioned, we expect to deliver very strong value on this investment we have a very clear business case, where value will be created and so we have owners for each of these areas, we're putting in new technology, and replacing a 20 year old system, there's tremendous opportunity to drive additional value through that increased technology and so.

Speaker Change: Okay.

Speaker Change: But financially has these calls even come into the numbers because you had a numbers question.

Speaker Change: We will deliver that business case, I think that positions us well to take costs out.

Speaker Change: Keep in mind right now, we're maintaining our admin line, we're maintaining two system infrastructures I'm paying for a legacy system and we are paying for a new system. Once you do this conversion, we're going be able to shut off the legacy system and Youll see cost start to come out in the back half of next year and then we will continue to drive productivity take that down even further going forward.

Speaker Change: Yes.

Speaker Change: In consensus though.

Javier Escalante: They're in our numbers right now Javier that we are the <unk>.

Javier Escalante: Licenses for the new technology, we're already expensing those those are on ongoing operations. We're not backing those out we are backing out the onetime investments for the transition, but the ongoing cost of the system. We're starting to occur in our P&L and that is not an adjusted item that's in our adjusted earnings.

Speaker Change: Okay.

Speaker Change: But financially has these calls even come into the numbers because you had every number question Bert.

Speaker Change: Okay. Thank you very very helpful.

Javier Escalante: Yeah.

Steve Powers: And our next question comes from Steve powers with Deutsche Bank.

Speaker Change: Yeah.

Speaker Change: In consensus though.

Speaker Change: They're in our numbers right now Javier that we are.

Steve Powers: Hey, great. Good afternoon, good evening, everybody congrats on congrats Kevin.

Speaker Change: Licenses for the new technology, we're already expensing those those are on ongoing operations. We're not backing those out we are backing out the onetime investments for the transition, but the ongoing cost of the system. We're starting to occur in our P&L and that is not an adjusted item that's in our adjusted earnings.

Steve Powers:

Speaker Change: Actually Kevin I wanted to talk on that.

Steve Powers: The cash flow renew the business.

Steve Powers: Okay.

Speaker Change: Thank you your scares, we had talked about free cash flow coming in around 12% of sales for the year.

Speaker Change: Okay. Thank you very very helpful.

Steve Powers: That was our expectation.

Speaker Change: Yeah.

Steve Powers: Year to date, we're running closer to nine just wanted to get a sense for your satisfaction with the cash generation of the business. So far the trend line et cetera, and then just.

Steve Powers: And our next question comes from Steve powers with Deutsche Bank.

Steve Powers: Great. Good afternoon, good evening, everybody Congrats congrats Kevin.

Steve Powers:

Steve Powers: T shifts at the end of the year, how do we think about the.

Steve Powers: Actually Kevin I wanted to talk on that.

Steve Powers: The cash for renew the business.

Steve Powers: Cash impacts of that.

Steve Powers: Cash and cash flow earnings.

Steve Powers: Okay.

Steve Powers: As the year scares, we had talked about free cash flow coming in around 12% of sales for the year.

Steve Powers: Lumpiness that we should we should think about as we.

Steve Powers:

Steve Powers: Contemplate cash flows over the balance of the year.

Steve Powers: So we thought that was our expectation.

Steve Powers: Yes, Steve.

Steve Powers: Good question and really thinking about the impact of the ERP, Let me start with a base plan and then I'll talk about the impact of the European on top of that.

Steve Powers: I think year to date, we're running closer to nine just wanted to get a sense for your satisfaction with the cash generation of the business. So far the trend line et cetera, and then just with the ERP shifts at the end of the year, how do we think about the <unk>.

You know, Steve we target of 11% to 13% I would say right now I think we're likely at the high end of that range before you add the ERP impact to that so.

Josh: Josh I'm talking about.

Josh: The cash with cash flow earnings or does there is there lumpiness that we should we should think about as we.

Steve Powers: We're off to a good start as you know based on lapping cyber Theres some noise in the front half of the year as you describe it.

Speaker Change: What kind of comp.

Steve Powers: I expected us to land closer to the high end of our targeted range prior to the ERP implementation now specific to the ERP, we will invest some additional cash to manage this transition loop talked about it not only will we be building retailer.

Josh: Contemplate cash flows over the balance of the year.

Yeah, Steve.

Josh: Good question and really thinking about the impact of the ERP, Let me start with the base plan and then I'll talk about the <unk>.

Josh: The European on top of that.

Josh: You know, Steve we target of 11% to 13% I would say right now I think we're likely at the high end of that range before you add the ERP impact to that so.

But we will also build from states your stock at our facilities. So there'll be some increased investments in inventory and that's just another way to out to mitigate the risk of this transition as well as you know there are some nuances here because youre down for a short period of time, we will prepay suppliers that we'd normally have to pay during that period and so youll see our AP balances go down a little bit that'll happen in.

Josh: We're off to a good start as you know based on lapping cyber Theres some noise in the front half of the year as you describe it.

Josh: I expected us to land closer to the high end of our targeted range prior to the ERP implementation now specific to the ERP, we will invest some additional cash to manage this transition Luc talked about it not only will we be building retailer.

Steve Powers: Q4, we anticipate that will be about $50 million to $100 million of cash now that won't just reverses out in front of 26, so it's noise, but what it'll do to our free cash flow. This year as well the base plan is probably close to 13%. Once you factor in the impact of the ERP transition will tie up some cash in Q4, I suspect to being closer to that.

Josh: But we will also build some states your stock at our facilities. So there'll be some increased investments in inventory and that's just another way to out to mitigate the risk of this transition as well as you know there are some nuances here because youre down for a short period of time, we will prepay suppliers that we would normally have to pay during that period and so youll see our AP balances go down a little bit that'll happen in.

Steve Powers: The low end of the range closer to 11% without that change is really just timing I'd say operationally were closer to 13.

Speaker Change: Okay, and then it reverses out next year, Okay makes sense and then.

Josh: Q4, we anticipate that will be about $50 million to $100 million of cash now that don't just reverses out in front of 26, so it's noise, but what it will do to our free cash flow. This year as well the base plan is probably close to 13%. Once you factor in the impact of the ERP transition will tie up some cash in Q4, I suspect to being closer to that.

On the I think the estimated fair value of Pmt's interest in the glass joint venture was around $530 million exiting last fiscal year.

Speaker Change: Is that a good number to kind of anchor to in terms of the.

Speaker Change: Cash costs that you are likely to have.

Josh: The low end of the range closer to 11%, but that that change is really just timing I'd say operationally were closer to 13.

Speaker Change: When that transition takes place or is there another another way to think about it.

Speaker Change: Yes, exactly right, Steve and I appreciate you reading, our 10-K from last year, but yes. So we we estimate every year, what we see is a fair market value for that business and we recognize that in our disclosures on our balance sheet. So that's our estimate of fair value maybe I'll just connect the dots. There. So as you think about exiting this agreement a year from now a few things that will have.

Speaker Change: Okay, and then it reverses out next year, Okay. It makes sense and then.

Speaker Change: On the I think the estimated fair value of Pmt's interest in the glass joint venture was around $530 million exiting last fiscal year.

Speaker Change: Is that a good number to kind of anchor to in terms of the.

Speaker Change: And as you said, Steve we will repurchase the 20% that P&G currently owned and will determine how to do that through cash or some form of borrowing but then the other impact you'll see on our P&L. As this is what I describe as a a.

Speaker Change: The cash costs that you are likely to have.

Speaker Change: When that transition takes place or is there another another way to think about it.

Steve Powers: Yeah, exactly right, Steve and I appreciate you reading, our 10-K from last year, but yes. So we estimate every year, what we see is a fair market value for that business and then we recognize that in our disclosures on our balance sheet. So that's our estimate of fair value maybe I'll just connect the dots. There. So as you think about exiting this agreement a year from now a few things will happen.

Speaker Change: Contractual joint venture will repay PNG, 20% of the cash flows every quarter and we charge. There was a cost of goods sold so results are buying back their interests, we will no longer pay them, 20% Youll see margin step up after the transactions completed and you'll see earnings step up as well net of any interest expense we have.

Steve Powers: As you said, Steve we will repurchase the 20% that P&G currently owns and will determine how to do that through cash or some form of borrowing but then the other impact you'll see on our P&L. As this is what I describe as a.

Speaker Change: But youll see an acceleration on the P&L once we bought back to 20% we don't currently own.

Speaker Change: Okay, great. Thanks that will flow through Cogs essentially show up in gross margin.

Steve Powers: All right.

Steve Powers: Contractual joint venture will repay P&G, 20% of the cash flows every quarter and we charge. It was a cost of goods sold so results are buying back their interests, we will no longer pay in that 20% Youll see margin step up after the transactions completed and you'll see earnings step up as well net of any interest expense, we have but youll see an acceleration.

Speaker Change: It will because the 20% cash flow, we pay them right now we charge that to cost of goods sold so once that stops youll see a step up in gross margin in both glad and the company as well as earnings.

Speaker Change: Very good okay. Thanks, so much.

Speaker Change: Sure.

Speaker Change: And we'll move next to Lauren Lieberman with Barclays.

Steve Powers: <unk> on the P&L once we bought back the 20% we don't currently own.

Great. Thanks, Hi, everyone.

Speaker Change: Just two questions there kind of bring up the rear first thing was household.

Steve Powers: Okay, great. Thanks that will flow through Cogs, essentially yourself on gross margin.

Steve Powers: It will because the 20% cash flow, we pay them right now we charge that to cost of goods sold so once that stopped youll see a step up in gross margin in both glad and the company as well as earnings.

Household was volumes were down quite a bit in the quarter, but you did call out kings for being so strong. So I just wanted to just check in on kind of what's going on on some of those other businesses.

Speaker Change: You talked about stepped up competitive activity in glad them, but just anything you can offer on the rest of the portfolio. There and then the second thing was.

Speaker Change: Very good okay. Thanks, so much.

Steve Powers: Sure.

Steve Powers: And we'll move next to Lauren Lieberman with Barclays.

Speaker Change: Just playing with my model it looks like gross margins would have to be down pretty significantly in the fourth quarter and I wasn't sure why because I would think that you would have the higher absorbs him from that ship ahead on the ERP I know I'm guessing logistics costs are higher but yeah. I was just surprised there wouldn't be a positive on absorb.

Lauren Lieberman: Great. Thanks, Hi, everyone.

Lauren Lieberman: Just two questions there kind of bring up the rear.

Lauren Lieberman: First thing was household.

Lauren Lieberman: Household was volumes were down quite a bit in the quarter, but you did call out kings for being so strong. So just wanted to just check in on kind of what's going on in some of those other businesses.

Lauren Lieberman: You talked about stepped up competitive activity and glad.

Speaker Change: <unk> to gross margin and for Kim Thanks.

Kevin: Sure. This is Kevin maybe I'll talk about just.

Lauren Lieberman: But just anything you can offer on the rest of the portfolio. There and then the second thing was just playing with my model. It looks like gross margins would have to be down pretty significantly in the fourth quarter and I wasn't sure why because I would think that you would have the higher absorption.

Speaker Change: Sales or volume in Q.

Kevin: Q2.

Kevin: When you look at household I'd say also looks very similar to the rest of the segments as we're lapping the retailer restock from the prior period and so volumes down about 11%. That's in line with all the other business units are generally down in similar vein. So that's really just the impact of lapping the retailer restocking in the prior period.

Lauren Lieberman: And from that ship ahead on the ERP I know I'm guessing logistics costs are higher but.

Lauren Lieberman: Yeah, I was just surprised there wouldn't be a positive on absorption to gross margin and <unk>. Thanks.

And then as it relates to remind me on your other question. Your second question was yes gross margin in the fourth yeah. Yeah. Yeah. So gross margin you might recall in Q4 of last year, our gross margin dropped significantly they're up almost 400 basis points and we had a bit of a unique gives you had very favorable mix.

Kevin: Sure. This is Kevin maybe I'll talk about just.

Kevin: Sales volume in.

Kevin: Q2.

If you look at household I'd say household looks very similar to the rest of the segments as we're lapping the retailer restock from the prior period, so volumes down about 11%. That's in line with all the other business units are generally down in similar vein. So that's really just the impact of lapping the retailer restocking in the prior period.

Kevin: Glad in litter underperformed relative to the rest of our portfolio and so we're lapping a significantly outsized gross margin in the year ago period, almost I think it was almost 47% and so what I expect is good strong gross margins relative to our 44% goal.

Kevin: And then as it relates to remind me learn your other part of your second question was yes gross margin in the fourth yeah. Yeah. Yeah. So gross margin if you might recall in Q4 of last year, our gross margin dropped significantly they're up almost 400 basis points and we had a bit of a unique gives you had very favorable mix because glad in litter underperformed.

Kevin: Be well north of that but it will be down a little bit from the prior year, just because we're lapping in an usually odd base year.

Kevin: Okay. Okay.

Speaker Change: And are there higher logistics costs and with the.

Kevin: With the ERP.

Kevin: Relative to the rest of our portfolio and so we're lapping a significantly outsized gross margin in the year ago period, almost I think it was almost 47% and so what I expect is good strong gross margins relative to our 44% goal should be well north of that but it'll be down a little bit from the prior year, just because we're lapping and usually at base year.

Kevin: Sure Yes.

Kevin: Or is it more about the like is it more a positive because of absorption.

Kevin: Youre exactly right there'll be there'll be two impacts from this is the first and they're both exactly what you said, we will have some increased logistics costs, Jimmy inquiries warehousing, because we will build some safety stock and Theres a cost to that we'll also get the benefit of the absorption because we'll be shipping more product that quarter and they generally net out and so theres not much net impact from those two items are generally equal in all.

Speaker Change: Okay, Okay and are there higher logistics costs again with the.

Kevin: Setting and then you'll see the reverse of that happened in the front half of next year, essentially equal and offsetting as well.

Kevin: With the ERP.

Kevin: Sure Yes.

Kevin: Is it more about the like is it more a positive because of absorption.

Speaker Change: Okay. Okay, great. Thank you.

Kevin: Well youre exactly right there'll be there'll be two impacts from this the first it and Theyre both exactly what you said, we will have some increased logistics cost Jim inquiries warehousing, because we will build some safety stock and Theres a cost to that we'll also get the benefit of the absorption because we'll be shipping more product that quarter and they generally net out and so theres not much net impact from those two items are generally equal.

Kevin: Sure.

Speaker Change: This concludes the question and answer session Ms. Rendell I would now turn the program back to you.

Ms. Rendell: Thank you everyone as we close today's call I want to step back and look at our performance within the context of the past several years.

Ms. Rendell: We have navigated through significant disruptions, including a pandemic, which led to an unprecedented level of demand surge and supply constraints ramp at inflation at a cyber attack and subsequent recovery.

Kevin: And offsetting and then you'll see the reverse of that happened in the front half of next year, essentially equal and offsetting as well.

Ms. Rendell: Painlessly, we've taken significant steps to transform our company, including the implementation of a new streamlined operating model and divestiture of two underperforming businesses as we continue evolving our portfolio.

Speaker Change: Okay, great. Thank you.

Kevin: Sure.

Kevin: This concludes the question and answer session Ms. Rendell I would now turn the program back to you.

Kevin: Yeah.

Kevin: Thank you everyone.

Ms. Rendell: Throughout all of this we've delivered strong compounded annual sales growth within our target over the last five years and more recently stabilized and rebuilt our gross margin and delivered strong earnings growth, which enables us to further invest in our business. We're excited to continue building on this progress with our U S. ERP implementation early next fiscal year. This is another important step in <unk>.

We close today's call I want to step back and look at our performance within the context of the past several years.

Kevin: We have navigated through significant disruptions, including a pandemic, which led to an unprecedented level of demand surge and supply constraints ramp at inflation at a cyber attack and subsequent recovery.

Kevin: Simultaneously, we've taken significant steps to transform our company, including the implementation of a new streamlined operating model and divestiture of two underperforming businesses as we continue evolving our portfolio.

Ms. Rendell: Coming a stronger company that continues to deliver consistent profitable growth and enhance long term shareholder value.

Ms. Rendell: We look forward to sharing more with you on our upcoming presentation at the Cagny conference in a few weeks until then please stay well.

Kevin: All of this we've delivered strong compounded annual sales growth within our target over the last five years and more recently stabilized and rebuilt our gross margin and delivered strong earnings growth, which enables us to further invest in our business. We're excited to continue building on this progress with our U S. ERP implementation early next fiscal year. This is another important step in becoming.

Ms. Rendell: This concludes today's conference. Thank you for attending.

Kevin: A stronger company that continues to deliver consistent profitable growth and enhance long term shareholder value.

Kevin: We look forward to sharing more with you on our upcoming presentation at the Cagny conference in a few weeks until then please stay well.

Kevin: This concludes today's conference. Thank you for attending.

Kevin: The host has ended this call goodbye.

Q2 2025 The Clorox Co Earnings Call - Q&A

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