Clorox Q2 2026 The Clorox Co Earnings Call | AllMind AI Earnings | AllMind AI
Q2 2026 The Clorox Co Earnings Call
Speaker #1: Good day, ladies and gentlemen, and welcome to The Clorox Company second quarter fiscal year 2026 earnings release conference call. At this time, all participants are in a listen-only mode.
Operator: Good day, ladies and gentlemen, and welcome to the Clorox Company Q2, fiscal year 2026 earnings release conference call. At this time, all participants are in a listen-only mode. At the conclusion of our prepared remarks, we will conduct a question-and-answer session. If you would like to ask a question, you may press star 1 on your touch tone pad at any time. If anyone should require assistance during the conference, please press star 0 on your touch tone pad at any time. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, Ms. Lisah Burhan, Vice President of Investor Relations for the Clorox Company. Ms. Burhan, you may begin your conference.
Operator: Good day, ladies and gentlemen, and welcome to the Clorox Company Q2, fiscal year 2026 earnings release conference call. At this time, all participants are in a listen-only mode. At the conclusion of our prepared remarks, we will conduct a question-and-answer session. If you would like to ask a question, you may press star 1 on your touch tone pad at any time. If anyone should require assistance during the conference, please press star 0 on your touch tone pad at any time. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, Ms. Lisah Burhan, Vice President of Investor Relations for the Clorox Company. Ms. Burhan, you may begin your conference.
Speaker #1: At the conclusion of our prepared remarks, we will conduct a question-and-answer session. If you would like to ask a question, you may press star one on your touch-tone pad at any time.
Speaker #1: If anyone should require assistance during the conference, please press star zero on your touch-tone pad at any time. As a reminder, this call is being recorded.
Speaker #1: I would now like to introduce your host for today's conference call, Ms. Lisah Burhan, Vice President of Investor Relations for The Clorox Company. Ms. Burhan, you may begin your conference.
Speaker #2: Thanks, Jen. Joining me today are Chair and CEO Linda Rendle, and following remarks include forward-looking statements. CFO Luke Belay, the that are based on management's current expectations but may differ from actual results or outcomes.
Lisah Burhan: Thanks, Jen. Joining me today are Chair and CEO Linda Rendle and CFO Luc Bellet. The following remarks include forward-looking statements that are based on management's current expectations but may differ from actual results or outcomes. In addition, these remarks refer to certain non-GAAP financial measures. Please refer to today's 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. With that, I'll turn it over to Linda.
Lisah Burhan: Thanks, Jen. Joining me today are Chair and CEO Linda Rendle and CFO Luc Bellet. The following remarks include forward-looking statements that are based on management's current expectations but may differ from actual results or outcomes. In addition, these remarks refer to certain non-GAAP financial measures. Please refer to today's 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. With that, I'll turn it over to Linda.
Speaker #2: In addition, these measures. Please refer to today's remarks refer to certain non-GAAP financial 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.
Speaker #2: section of the company's Form 10-K The risk factor also includes further discussion of forward-looking statements. With that, I'll turn it over to
Speaker #2: Linda. Good afternoon, everyone, and thanks for joining
Linda Rendle: Good afternoon, everyone, and thanks for joining us. Before we get into your questions, I want to take a moment to frame where we are in our transformation and how we're navigating a highly dynamic environment. We entered the year knowing the first half would be challenging given the volatile macroeconomic environment and the temporary impacts of our ERP implementation. While external pressures added complexity, we delivered results largely in line with our expectations. We're strengthening our foundation by advancing our digital transformation, enhancing execution, driving value from our newly modernized ERP foundation, and accelerating innovation that delivers superior value to consumers. And with our planned acquisition of GOJO Industries, we're taking a decisive step to expand our leadership in health and hygiene and unlock long-term growth opportunities. There's more work to do, but we're optimistic about our future. With that, Luc and I are happy to take your questions.
Linda Rendle: Good afternoon, everyone, and thanks for joining us. Before we get into your questions, I want to take a moment to frame where we are in our transformation and how we're navigating a highly dynamic environment. We entered the year knowing the first half would be challenging given the volatile macroeconomic environment and the temporary impacts of our ERP implementation. While external pressures added complexity, we delivered results largely in line with our expectations. We're strengthening our foundation by advancing our digital transformation, enhancing execution, driving value from our newly modernized ERP foundation, and accelerating innovation that delivers superior value to consumers. And with our planned acquisition of GOJO Industries, we're taking a decisive step to expand our leadership in health and hygiene and unlock long-term growth opportunities. There's more work to do, but we're optimistic about our future. With that, Luc and I are happy to take your questions.
Speaker #3: us. Before we get into your questions, I want to take a moment to frame where we are in our transformation and how we're navigating a highly dynamic environment.
Speaker #3: We entered the year knowing the first half would be challenging given the impacts of our ERP volatile macroeconomic environment and the temporary implementation. While external pressures added complexity, we delivered results largely in line with our expectations.
Speaker #3: We're strengthening our foundation by advancing our digital transformation, enhancing execution, driving value from our newly modernized ERP foundation, and accelerating innovation that delivers superior value to consumers.
Speaker #3: Acquisition of Gojo Industries, we're taking a decisive step to expand our leadership in health and hygiene, and with our planned unlock, long-term growth opportunities.
Speaker #3: There's more work to do, but we're optimistic about our future. With that, Luke and I are happy to take your questions.
Operator: Thank you, Ms. Rendle. Ladies and gentlemen, if you have a question, please press star 1 on your touch tone telephone. Our first question will come from Andrea Teixeira.
Operator: Thank you, Ms. Rendle. Ladies and gentlemen, if you have a question, please press star 1 on your touch tone telephone. Our first question will come from Andrea Teixeira.
Speaker #1: gentlemen, if you have a question, please press star one on your touch-tone Thank you, Ms. Rendle. telephone. Ladies and And our first question will come from Andrea Teixeira.
Speaker #4: Thank you. Good afternoon, everyone. I was hoping to see if you can talk about the exit of the quarter and how are you seeing—I mean, obviously, you did reaffirm your guidance—how we should be thinking of the competitive environment now and the promotional environment.
[Analyst]: Thank you. Good afternoon, everyone. I was hoping to see if you can talk about the exit of the quarter and how are you seeing, I mean, obviously, you did reaffirm your guidance, how we should be thinking of the competitive environment now and the promotional environment? Thank you.
Andrea Teixeira: Thank you. Good afternoon, everyone. I was hoping to see if you can talk about the exit of the quarter and how are you seeing, I mean, obviously, you did reaffirm your guidance, how we should be thinking of the competitive environment now and the promotional environment? Thank you.
Speaker #4: Thank you.
Speaker #3: Andrea. We saw, as we expected, a sequential improvement in the quarter, which was good and consistent with what we are expecting in the back half of the category and our performance to be stronger than they were in the first half.
Linda Rendle: Andrea, we saw, as we expected, sequential improvement in the quarter, which was good and consistent with what we are expecting in the back half of the year, where we expect both the category and our performance to be stronger than they were in the first half. If you look at the category numbers, it was about in line with where Q1 was. If you exclude our beauty business, Q1 was flat from a category perspective. Q2 was down a tenth of a point, so about in line. Our share performance was what it was supposed to be or what we expected it to be, not what we want it to be. But we were down in share. But again, we saw sequential improvement as we moved through the quarter. The competitive environment was largely what we expected it to be.
Linda Rendle: Andrea, we saw, as we expected, sequential improvement in the quarter, which was good and consistent with what we are expecting in the back half of the year, where we expect both the category and our performance to be stronger than they were in the first half. If you look at the category numbers, it was about in line with where Q1 was. If you exclude our beauty business, Q1 was flat from a category perspective. Q2 was down a tenth of a point, so about in line. Our share performance was what it was supposed to be or what we expected it to be, not what we want it to be. But we were down in share. But again, we saw sequential improvement as we moved through the quarter. The competitive environment was largely what we expected it to be.
Speaker #3: If you look at the category numbers, it was a year where we expect both to be about in line with where Q1 was. If you exclude our Beauty business, Q1 was flat from a category perspective.
Speaker #3: Q2 was down a tenth of a point, so about in line. Our share performance was what it was supposed to be, or what we expected it to be, not what we want it to be.
Speaker #3: But we were down in share, but again, we saw sequential improvement as we moved through the quarter. The competitive environment was largely what we expected it to be.
Speaker #3: Competitive activity, pre-COVID levels are. There are again, is back to what we'd say pockets where it continues to be a bit more competitively intense.
Linda Rendle: Competitive activity, again, is back to what we'd say pre-COVID levels are. There are pockets where it continues to be a bit more competitively intense. We've talked about Glade and Glad. We saw some pockets in home care, but nothing outside of what we are used to and able to handle. And we feel like we have the right plans to address that. And then as we head into the back half of the year, we continue to expect category growth to be in the 0% to 1% range. We expect to have stronger share performance based on our plans. We have excellent innovation plans in the back half, strong demand plans, and we're beginning to see the fruits of that. If you look at consumption in January, there was certainly a pickup.
Linda Rendle: Competitive activity, again, is back to what we'd say pre-COVID levels are. There are pockets where it continues to be a bit more competitively intense. We've talked about Glade and Glad. We saw some pockets in home care, but nothing outside of what we are used to and able to handle. And we feel like we have the right plans to address that. And then as we head into the back half of the year, we continue to expect category growth to be in the 0% to 1% range. We expect to have stronger share performance based on our plans. We have excellent innovation plans in the back half, strong demand plans, and we're beginning to see the fruits of that. If you look at consumption in January, there was certainly a pickup.
Speaker #3: glad. We saw some pockets in home We've talked about litter and care, but nothing outside of what we are used to. And able to handle, and we feel like we have the right plans to address that.
Speaker #3: And then as we head into the back half of the year, we continue to expect category growth to be in the 0 to 1% range.
Speaker #3: We expect to have plans. We have excellent innovation plans in stronger share performance based on our the back half, strong demand plans. look at consumption And we're beginning to see the fruits of that.
Speaker #3: In January—there was certainly a pickup. Some of it was due, in the last half of January, to weather. But we are a growing share in the last week, and so that's—we're seeing the investments that we're putting in place working.
Linda Rendle: Some of it due in the last half of January to weather, but we are growing share in the last week. And so we're seeing the investments that we're putting in place working. I think as you maybe take a step back on the consumer, the only other thing I would note, consumer, is largely what we expected it to be. We're seeing consumers continue to focus on value. We're seeing them trade up to larger sizes, down to smaller sizes. We've seen trips increase in the broad market basket. In our categories, we're seeing more stock-up behavior, which is pretty normal in our categories. And then, of course, we see consumers moving to more value-oriented channels. But I would say the consumer was largely steady as we had expected and in line with category growth.
Linda Rendle: Some of it due in the last half of January to weather, but we are growing share in the last week. And so we're seeing the investments that we're putting in place working. I think as you maybe take a step back on the consumer, the only other thing I would note, consumer, is largely what we expected it to be. We're seeing consumers continue to focus on value. We're seeing them trade up to larger sizes, down to smaller sizes. We've seen trips increase in the broad market basket. In our categories, we're seeing more stock-up behavior, which is pretty normal in our categories. And then, of course, we see consumers moving to more value-oriented channels. But I would say the consumer was largely steady as we had expected and in line with category growth.
Speaker #3: I think, as you maybe take a step back on the consumer, the only other thing I would note—consumer is largely what we expected it to be.
Speaker #3: We're seeing consumers continue to focus on value. We're seeing them trade up to larger sizes, down to smaller sizes. We've seen trips increase in the broad market basket.
Speaker #3: In our categories, we're seeing more stock-up behavior, which is pretty normal in our categories. And then, of course, we see consumers moving to more value-oriented channels.
Speaker #3: But I would say the consumer was largely steady as we had expected and in line with category growth.
Speaker #4: And if you can comment on some of your peers, Linda, that's helpful. But some of your peers had said that they've seen the exit rate improving a bit.
[Analyst]: And if you can comment on some of your peers, Linda, that's helpful. But some of your peers had said that they've seen the exit rate improving a bit. You might not be seeing that specifically because of the puts and takes on the ERP transition. But I understand that you're mostly done in January from your prepared remarks. Just to think about how this trajectory to think about the third quarter fiscal.
Andrea Teixeira: And if you can comment on some of your peers, Linda, that's helpful. But some of your peers had said that they've seen the exit rate improving a bit. You might not be seeing that specifically because of the puts and takes on the ERP transition. But I understand that you're mostly done in January from your prepared remarks. Just to think about how this trajectory to think about the third quarter fiscal.
Speaker #4: You might not be seeing that specifically because of the puts and takes on the ERP transition. But I understand that you've done your mostly done in January from your prepared how this trajectory and to think about the third quarter remarks.
Speaker #4: Just to think about
Speaker #4: fiscal.
Speaker #3: I want to make
Linda Rendle: I want to make sure, Andrea, that I'm getting your point. I'll return to the point I made at the beginning on Q2. We did see sequential improvement in Q2. So the exit rate was stronger coming out of the quarter than it was going in. We've seen that continue into January. And again, some of that in the end of the month, I think, is due to weather. But we saw our share results pick up in that as well. So feel good about our plans to address that. But I would say our expectation on the category based on that is still what it was before. It remains between 0 and 1. We don't see anything to indicate a trajectory change. We think it's well within that band. And again, Q1 and Q2 were about the same category growth rate, about flat.
Linda Rendle: I want to make sure, Andrea, that I'm getting your point. I'll return to the point I made at the beginning on Q2. We did see sequential improvement in Q2. So the exit rate was stronger coming out of the quarter than it was going in. We've seen that continue into January. And again, some of that in the end of the month, I think, is due to weather. But we saw our share results pick up in that as well. So feel good about our plans to address that. But I would say our expectation on the category based on that is still what it was before. It remains between 0 and 1. We don't see anything to indicate a trajectory change. We think it's well within that band. And again, Q1 and Q2 were about the same category growth rate, about flat.
Speaker #3: sure Andrea that I'm getting your point. I'll return to the point I made at the beginning on Q2. We did see sequential improvement in Q2.
Speaker #3: So the exit rate was stronger coming out of the quarter than it that continue into was going in. We've seen January. of the month, I think, is due to And again, some of that in the end weather.
Speaker #3: But we saw our share results pick up in that as well, so feel good about our plans to address that. But I would say our expectation on the category, based on that, is still what it was before.
Speaker #3: It remains between 0 and 1. We don't see anything to indicate a trajectory change. We think it's well within that band. And again, Q1 and Q2 were about the same category growth rate, about flat.
Speaker #3: And we expect to see 0 to 1 in the back
Linda Rendle: We expect to see 0 to 1 in the back half.
Linda Rendle: We expect to see 0 to 1 in the back half.
Speaker #3: half. Great.
[Analyst]: Great. Appreciate that. Thank you very much.
Andrea Teixeira: Great. Appreciate that. Thank you very much.
Speaker #4: Appreciate that. Thank you very much.
Speaker #3: Thanks. And our next
Linda Rendle: Thanks.
Linda Rendle: Thanks.
Operator: Our next question will come from Peter Grom with UBS.
Operator: Our next question will come from Peter Grom with UBS.
Speaker #1: question will come from Peter Grum with
Speaker #1: UBS. Great.
Peter Grom: Great. Thanks, everyone. Hope you're doing well. So maybe one housekeeping and one real question. So you alluded to some shipment favorability in the quarter that I think is expected to come out of the third quarter. So you can maybe help frame the magnitude of the upside or maybe what we should be expecting to reverse. And then, Linda, as we think about the back half of the year and you kind of just spoke to this to Andrea's question, and I get it's only a week, but you talked about share gains in the most recent week. So can you just talk about your confidence that can continue? And then specifically, can you speak to when we should start to see the benefits from all the innovation that you outlined in the prepared remarks start to show through? Thanks.
Peter Grom: Great. Thanks, everyone. Hope you're doing well. So maybe one housekeeping and one real question. So you alluded to some shipment favorability in the quarter that I think is expected to come out of the third quarter. So you can maybe help frame the magnitude of the upside or maybe what we should be expecting to reverse. And then, Linda, as we think about the back half of the year and you kind of just spoke to this to Andrea's question, and I get it's only a week, but you talked about share gains in the most recent week. So can you just talk about your confidence that can continue? And then specifically, can you speak to when we should start to see the benefits from all the innovation that you outlined in the prepared remarks start to show through? Thanks.
Speaker #5: Thanks, everyone. Hope you're doing well. So maybe one housekeeping and one real question. So you alluded to some shipment favorability in the quarter that I think is expected to come out of the third quarter.
Speaker #5: So you can maybe help frame the magnitude of the upside, or maybe what we should be expecting to reverse. And then, Linda, as we think about the back half of the year—and you kind of just spoke to this in Andrea's question—and I get it's only a week, but you talked about share gains in the most recent week.
Speaker #5: So can you just talk about your confidence that can continue? And then specifically, can you speak to when we should start to see the benefits from all the innovation that you outlined in the prepared remarks start to show through?
Speaker #6: Hi, Peter. This is Luke.
Luc Bellet: Hi, Peter. This is Luc. I can take your first question. Yeah, we ended up having about a point of favorability due to higher than expected shipments ahead of consumption on a few different businesses. We'll expect that it will reverse in Q3. Now, there are a few drivers, but I would say the main one was some higher shipments related to the final phase of our ERP implementations. Just for context, if you remember, we went live with the new ERP in July. That was for most of our operation, including order to cash, demand fulfillment, and logistics. For manufacturing, given the large numbers of facilities that we had, we took a phase approach. We essentially transitioned manufacturing facilities into three phases. The first one was in July. The second one was in October. The last one was in January.
Luc Bellet: Hi, Peter. This is Luc. I can take your first question. Yeah, we ended up having about a point of favorability due to higher than expected shipments ahead of consumption on a few different businesses. We'll expect that it will reverse in Q3. Now, there are a few drivers, but I would say the main one was some higher shipments related to the final phase of our ERP implementations. Just for context, if you remember, we went live with the new ERP in July. That was for most of our operation, including order to cash, demand fulfillment, and logistics. For manufacturing, given the large numbers of facilities that we had, we took a phase approach. We essentially transitioned manufacturing facilities into three phases. The first one was in July. The second one was in October. The last one was in January.
Speaker #6: I can take your first Thanks. question. Yeah, we ended up, I think, about a point of favorability due to higher than expected shipments ahead of consumption on a few different businesses.
Speaker #6: And we'll expect that it will reverse in the third quarter. Now, there are a few drivers, but I would say the main one was some higher shipments related to the final phase of our ERP implementations.
Speaker #6: And just for context, if you remember, we went live with the new ERP in July. And that was for most of our operation, including order to cash, demand fulfillment, and logistics.
Speaker #6: But for manufacturing, given the large numbers of facilities that we had, we took a phased approach. And so we essentially transitioned manufacturing facilities into three phases.
Speaker #6: July. The second one was in October. And the last one was—the first one was in January. And so, we had a little bit higher retailer inventory pre-build as a result of that last phase.
Luc Bellet: And so we had a little bit higher retailer inventory prebuild as a result of that last phase. To be clear, we had expected some level of prebuild. It just ended up being higher than expected. So the good news is at least the last phase went very smoothly. And it's great to have this behind us. So that's really just quarterly noise and has no implication on the full year.
Luc Bellet: And so we had a little bit higher retailer inventory prebuild as a result of that last phase. To be clear, we had expected some level of prebuild. It just ended up being higher than expected. So the good news is at least the last phase went very smoothly. And it's great to have this behind us. So that's really just quarterly noise and has no implication on the full year.
Speaker #6: To be clear, we had expected some level of pre-build. It just ended up being higher than expected. So the good news is, at least the last phase, went very smoothly.
Speaker #6: And this is great to have this behind us. So that's really just on the full quarterly noise, and there's no implication year.
Speaker #3: I'll take your second part of your question, Peter. For our back half, it is heavily weighted towards launching innovation across all of our major brands.
Linda Rendle: I'll take your second part of your question, Peter. For our back half, it is heavily weighted towards launching innovation across all of our major brands. We're pretty excited about the innovation we have slated. As we talked about, I think last year at CAGNY and have spoken about on our call since, we are excited about this back half because it introduces some new platforms as well as builds on existing and very successful platforms we've had in the company. A good mix of both. The spending that we have addresses what we need to to ensure we're driving trial and to continue to expand on the platforms we have. How they'll build throughout the quarter, I think it's important to note. We've begun shipping many of these innovations already, but most shelf resets won't occur until the back half of Q3 or early Q4.
Linda Rendle: I'll take your second part of your question, Peter. For our back half, it is heavily weighted towards launching innovation across all of our major brands. We're pretty excited about the innovation we have slated. As we talked about, I think last year at CAGNY and have spoken about on our call since, we are excited about this back half because it introduces some new platforms as well as builds on existing and very successful platforms we've had in the company. A good mix of both. The spending that we have addresses what we need to to ensure we're driving trial and to continue to expand on the platforms we have. How they'll build throughout the quarter, I think it's important to note. We've begun shipping many of these innovations already, but most shelf resets won't occur until the back half of Q3 or early Q4.
Speaker #3: And we're pretty excited about the innovation we have slated. And as we talked about, I think, last year at CAGNI and have spoken about on our calls since, we are excited about this back half because it introduces some new platforms as well as builds on existing and very successful platforms we've had in the company.
Speaker #3: So, a good mix of both. Like the spending that we have, we'd address what we need to to ensure we're driving trial and to continue to expand on the platforms we have.
Speaker #3: How they'll build throughout the quarter, I think it's important to note we've begun shipping many of these innovations already. But most shelf resets won't occur until the back half of Q3 or early Q4.
Speaker #3: So that's when we would expect to see a significant ramp-up from innovation, and certainly, that will impact share at that time. But maybe I'll talk about a few of the innovations, how we're thinking about the investments, and then I'll talk about some of the early indications we've had on success and what we're looking for.
Linda Rendle: So that's when we would expect to see a significant ramp-up from innovation. And certainly, that will impact share at that time. But maybe I'll talk about a few of the innovations, how we're thinking about the investments, and then I'll talk about some of the early indications we've had on success and what we're looking for. I think many of you have seen we've launched a new platform in our cleaning business, which deals with one of the most troubling things that consumers have, which is allergies. And they fight these things constantly through different avenues. They take medication. They clean more, etc. But this is a proprietary technology that actually destroys the allergen. And we saw great consumer results when we did testing. That began shipping. It's very, very early. But so far, we have good consumer reviews. And most importantly, we have very strong plans with retailers.
Linda Rendle: So that's when we would expect to see a significant ramp-up from innovation. And certainly, that will impact share at that time. But maybe I'll talk about a few of the innovations, how we're thinking about the investments, and then I'll talk about some of the early indications we've had on success and what we're looking for. I think many of you have seen we've launched a new platform in our cleaning business, which deals with one of the most troubling things that consumers have, which is allergies. And they fight these things constantly through different avenues. They take medication. They clean more, etc. But this is a proprietary technology that actually destroys the allergen. And we saw great consumer results when we did testing. That began shipping. It's very, very early. But so far, we have good consumer reviews. And most importantly, we have very strong plans with retailers.
Speaker #3: I think many of you have seen we've launched a new platform in our cleaning business, which deals with one of the most troubling things that consumers have, which is allergies.
Speaker #3: They take, and they fight these things constantly—medication, they clean more, etc. But this is a proprietary technology that actually destroys the allergen, and we saw great consumer results when we did testing.
Speaker #3: That began shipping. It's very, very early. But so far, we have good consumer reviews. And most importantly, we have very strong plans with retailers.
Speaker #3: They're very excited about a new platform and a new launch in this space. And again, we would expect that to ramp up over the back half of Q3 and early in Q4.
Linda Rendle: They're very excited about a new platform and a new launch in this space. And again, we would expect that to ramp up over the back half of Q3 and early in Q4. And then from an investment perspective, we have doubled our typical launch-size investment plan behind marketing, behind demand creation, etc. So feeling very excited about that. And this is one that we're launching, of course, not just to have a launch in our back half of the year, but to be a platform that we can build on for many years to come. And in fact, we're already selling the second and third wave of this platform out with retailers. Ticking through a few of the others, we're expanding on our Glad ForceFlex program and adding a new technology with LeakGuard in the bag.
Linda Rendle: They're very excited about a new platform and a new launch in this space. And again, we would expect that to ramp up over the back half of Q3 and early in Q4. And then from an investment perspective, we have doubled our typical launch-size investment plan behind marketing, behind demand creation, etc. So feeling very excited about that. And this is one that we're launching, of course, not just to have a launch in our back half of the year, but to be a platform that we can build on for many years to come. And in fact, we're already selling the second and third wave of this platform out with retailers. Ticking through a few of the others, we're expanding on our Glad ForceFlex program and adding a new technology with LeakGuard in the bag.
Speaker #3: And then from an investment perspective, we have doubled our typical launch size investment plan behind marketing, behind demand creation, etc. So, feeling very excited about that.
Speaker #3: And this is one that we're launching, of course, not just to have platform that we can build on for many years to come. And in fact, we're already selling the second and third wave of this platform out with retailers.
Speaker #3: Ticking through a few of the others, we're expanding on our Glad ForceFlex program and adding a new technology with LeapGuard in the bag.
Speaker #3: So a frustration for consumers is if a tear happens in the bag, they end up having liquids leak out. And the bottom of our bag now has an absorbent layer that absorbs that liquid and prevents leaks.
Linda Rendle: A frustration for consumers is if a tear happens in the bag, they end up having liquids leak out. The bottom of our bag now has an absorbent layer that absorbs that liquid and prevents leaks. This will be in our premium line of trash bags. We're excited about continuing to offer consumers additional value in the trash segment and particularly, again, focused on ensuring that we are innovating and giving people better experiences. This is a way that hopefully we can temper a little bit of the promotional activity that we've seen out there. Litter. We are fully relaunching our litter business beginning in the back half of this fiscal year. We actually have a multiple-year plan in place. But this first portion of our litter relaunch will include new packaging, new graphics, and claims, some updated items.
Linda Rendle: A frustration for consumers is if a tear happens in the bag, they end up having liquids leak out. The bottom of our bag now has an absorbent layer that absorbs that liquid and prevents leaks. This will be in our premium line of trash bags. We're excited about continuing to offer consumers additional value in the trash segment and particularly, again, focused on ensuring that we are innovating and giving people better experiences. This is a way that hopefully we can temper a little bit of the promotional activity that we've seen out there. Litter. We are fully relaunching our litter business beginning in the back half of this fiscal year. We actually have a multiple-year plan in place. But this first portion of our litter relaunch will include new packaging, new graphics, and claims, some updated items.
Speaker #3: And this will be in our premium line of trash bags. And we're excited about continuing to offer consumers additional value in the trash segment and particularly, again, focused on ensuring that we are innovating and giving people better experiences and this is a way that hopefully we can temper a little bit of the promotional activity that we've seen out there.
Speaker #3: Litter. We are fully relaunching our litter business beginning in the back half of this fiscal year. And we actually have multiple year plan in place but this first portion of our litter relaunch will include new packaging, new graphics and claims, some updated items.
Linda Rendle: We're feeling good on what we've seen in early results. Some customers have started that implementation, and early results are encouraging. That category continues to be competitive, but we feel like we have the right plan for the next six months and the next couple of years to begin to win some of that share back that we've lost as a result of both cyber and then our ERP implementation. Other businesses, I would call out Hidden Valley as another where Price Pack Architecture will play a big role in the back half of the year. We've seen consumers trading up to larger and smaller sizes. We're addressing that in the back half as well as a new Avocado Ranch, which addresses people who are looking for non-seed oil dressings and food items. The list goes on and on.
Linda Rendle: We're feeling good on what we've seen in early results. Some customers have started that implementation, and early results are encouraging. That category continues to be competitive, but we feel like we have the right plan for the next six months and the next couple of years to begin to win some of that share back that we've lost as a result of both cyber and then our ERP implementation. Other businesses, I would call out Hidden Valley as another where Price Pack Architecture will play a big role in the back half of the year. We've seen consumers trading up to larger and smaller sizes. We're addressing that in the back half as well as a new Avocado Ranch, which addresses people who are looking for non-seed oil dressings and food items. The list goes on and on.
Speaker #3: we've seen in early results. Some customers have started that implementation and early results are encouraging. That category continues to be competitive, but we feel like we have the right plan for the next six months and the next couple of years to begin to win some of that share back that we've lost as a result of both cyber and then our ERP implementation.
Speaker #3: And then other businesses, I would call out Hidden Valley as another, where price pack architecture will play a big role in the back half of the year.
Speaker #3: We've seen consumers trading up to larger, addressing that in the back, and smaller sizes—so we're half. As well as a new avocado ranch, which addresses people who are looking for non-seed oil dressings and food items.
Speaker #3: The list goes on and on. But Peter, I think the main takeaway here is the plans are very strong. They ramp up throughout the year.
Linda Rendle: But Peter, I think the main takeaway here is the plans are very strong. They ramp up throughout the year. We would expect that this is a major lever for us to improve our share results and, of course, our sales results. We have investment buying all of them. We're ready to lean in if any of them start to take off. And we have the ability to do that given our strong gross margin position and the fact that we rebuilt that fully. But feeling terrific and excited. And we'll speak more to you about the specific items when we talk to you later at CAGNY this month.
Linda Rendle: But Peter, I think the main takeaway here is the plans are very strong. They ramp up throughout the year. We would expect that this is a major lever for us to improve our share results and, of course, our sales results. We have investment buying all of them. We're ready to lean in if any of them start to take off. And we have the ability to do that given our strong gross margin position and the fact that we rebuilt that fully. But feeling terrific and excited. And we'll speak more to you about the specific items when we talk to you later at CAGNY this month.
Speaker #3: We would expect our share results. And of course, that this is a major lever for us to improve our sales results. We have investment buying all of them.
Speaker #3: them start to take off. And we have the ability to do that given We're ready to lean in if any of and the fact that we rebuilt that to you about the specific items when fully.
Speaker #3: We talked to you later at CAGNI this.
Speaker #3: month. Great.
Peter Grom: Great. Thank you so much. I'll leave it there.
Peter Grom: Great. Thank you so much. I'll leave it there.
Speaker #1: Thank you so much. I'll leave it But feeling terrific and excited.
Speaker #1: there.
Speaker #2: And we'll move next to Filippo And we'll speak more
Operator: We'll move next to Filippo Falorni with Citi.
Operator: We'll move next to Filippo Falorni with Citi.
Speaker #2: CITI. Hi.
Luc Bellet: Hi. Good afternoon, everyone. I have a follow-up on the question on pricing and promotional environment. In Q2, your pricing was flattish for the total company, but you had negative pricing in household. I think, Linda, you mentioned that you expected still a competitive environment. So how should we think about pricing in the second half of the year? Can we still see it flattish for the total company, or could there be some more price intervention? And then on gross margin, can you help us understand the puts and takes in the back half of the year? I think in this quarter, you called out higher than anticipated supply chain costs. Do we expect those to stay elevated in the back half? And what are the puts and takes in terms of cost saving, pricing, and commodities? Thank you.
Filippo Falorni: Hi. Good afternoon, everyone. I have a follow-up on the question on pricing and promotional environment. In Q2, your pricing was flattish for the total company, but you had negative pricing in household. I think, Linda, you mentioned that you expected still a competitive environment. So how should we think about pricing in the second half of the year? Can we still see it flattish for the total company, or could there be some more price intervention? And then on gross margin, can you help us understand the puts and takes in the back half of the year? I think in this quarter, you called out higher than anticipated supply chain costs. Do we expect those to stay elevated in the back half? And what are the puts and takes in terms of cost saving, pricing, and commodities? Thank you.
Speaker #4: Good afternoon, everyone. I have a follow-up on the question on pricing and promotional environment. In Q2, your pricing was flattish for the total company.
Speaker #4: But you had negative pricing in Household. I think, Linda, you mentioned that you're expecting still a competitive environment. So, how should we think about pricing in the second half of the year?
Speaker #4: Do we still feel flattish for the total company? Or could there be some more price intervention? And then, on gross margin, can you help us understand the puts and takes in the back half of the year?
Speaker #4: I think in this quarter, you called out higher-than-anticipated supply chain costs. Do we expect those to stay elevated in the back half?
Speaker #4: And what are the puts and takes in terms of cost saving and pricing and commodities? Thank
Speaker #4: you. Sure.
Peter Grom: Sure. What I can do, Filippo, this is Luc. Let me just answer your question on gross margin and then just talk a little bit of how do we think about price mix within the context of the outlook. And then I'll just pass it on for Linda to provide a little more perspective on how we see this externally. So on the gross margin, if you step back, our outlook, excluding the temporary impact of the ERP, our outlook assumes that gross margin will be expanding in the back half, and it's been contracting in the front half. And so there's a few differences when you compare the back half to the front half. Inflation is actually fairly consistent across quarters. So that's not really where we see some differences. But there's about three that are worth calling out.
Luc Bellet: Sure. What I can do, Filippo, this is Luc. Let me just answer your question on gross margin and then just talk a little bit of how do we think about price mix within the context of the outlook. And then I'll just pass it on for Linda to provide a little more perspective on how we see this externally. So on the gross margin, if you step back, our outlook, excluding the temporary impact of the ERP, our outlook assumes that gross margin will be expanding in the back half, and it's been contracting in the front half. And so there's a few differences when you compare the back half to the front half. Inflation is actually fairly consistent across quarters. So that's not really where we see some differences. But there's about three that are worth calling out.
Speaker #3: Luke. Let me just answer your question What I can do, Filippo, this is on gross margin. And then just talk a little bit of how do we think about price mix within the context of the outlook.
Speaker #3: And then I'll just pass it on for Linda to provide a little more perspective on how we see this externally. So on the gross if you step back, our outlook, excluding the impact, the temporary impact of the ERP, our outlook at that gross margin would be expanding in the back half.
Speaker #3: And it's been contracting in the front half. And so there's a few differences when you compare the back half to the front half. Inflation is actually fairly consistent.
Speaker #3: Across quarters. So that's not really where we see some differences. But there's about three that are worth calling out. First, generally our projected cost savings run rate is a little higher in the back half than in the front half.
Peter Grom: First, generally, our projected cost savings run rate is a little higher in the back half than in the front half. Second, as you alluded to, we incurred incremental expenses in the front half as we stabilized and optimized our service level following the ERP transition. And as you can imagine, we had a lot of different types of expenses, especially on logistics, that came up with that. But this will start coming down in the back half, and then will fully go away by the fourth quarter. And then finally, we also expect the benefit of step-up of the Glad JV termination. As we talked to you in the past, that creates about 50 basis points of benefit in the back half that is not in the front half. So those are the main differences.
Luc Bellet: First, generally, our projected cost savings run rate is a little higher in the back half than in the front half. Second, as you alluded to, we incurred incremental expenses in the front half as we stabilized and optimized our service level following the ERP transition. And as you can imagine, we had a lot of different types of expenses, especially on logistics, that came up with that. But this will start coming down in the back half, and then will fully go away by the fourth quarter. And then finally, we also expect the benefit of step-up of the Glad JV termination. As we talked to you in the past, that creates about 50 basis points of benefit in the back half that is not in the front half. So those are the main differences.
Speaker #3: as you alluded to, we incurred incremental expenses in the front half as we Second, service level following the ERP we had a lot of different types of transition.
Speaker #3: Expenses, especially on logistics, that came up with that. But this will start coming down, and as you can imagine, in the back half. And then will fully go away by the fourth quarter.
Speaker #3: And then finally, we also expect the benefit of step-up from the GLAD JV termination, as we've talked to you about in the past. That creates about a 50 basis point benefit in the back half.
Speaker #3: That is not in the front half. So those are the main differences. From a phasing standpoint in the back half, we expect the third quarter to be about flat.
Peter Grom: From a phasing standpoint in the back half, we expect Q3 to be about flat, and we expect solid expansion in Q4. The main thing here to consider is that there's some timing of manufacturing expenses and cost savings between the two quarters, which is bringing Q3 down and Q4 up a bit. And we also still have some of those few incremental expenses that we just talked about in Q3, and they kind of go away in Q4. So that's from a phasing standpoint. And so a little bit of noise by quarter, but overall, feel confident in our back half and full year outlook on gross margin. Now, maybe just a comment on price mix.
Luc Bellet: From a phasing standpoint in the back half, we expect Q3 to be about flat, and we expect solid expansion in Q4. The main thing here to consider is that there's some timing of manufacturing expenses and cost savings between the two quarters, which is bringing Q3 down and Q4 up a bit. And we also still have some of those few incremental expenses that we just talked about in Q3, and they kind of go away in Q4. So that's from a phasing standpoint. And so a little bit of noise by quarter, but overall, feel confident in our back half and full year outlook on gross margin. Now, maybe just a comment on price mix.
Speaker #3: expect solid expansion in the fourth And we that there's some timing of manufacturing expenses and cost savings. Between the two quarters. Which is quarter.
Speaker #3: bringing Q3 down and Q4 up a bit. And we also still have some of those few incremental The main thing here to consider is expenses that we just talked about in the third quarter.
Speaker #3: And they kind of go away in the fourth quarter, so that's from a phasing standpoint. And it's a little bit of noise by quarter.
Speaker #3: But overall, feel confident in our back half and fully our ur outlook on gross margin. Now, regarding maybe just a comment on price mix.
Speaker #3: As you look at our full-year prior outlook, which is we expect price mix to be a little bit outlook, our assumption is the same as the headwind.
Peter Grom: As you look at our full year outlook, our assumption is the same as the prior outlook, which is we expect price mix to be a little bit of headwind, call it about 1% or so for the full year. So volume would grow slightly ahead of organic sales growth. Now, this might vary a bit by quarter, right? In Q2, we were about flat, and some other quarter might be a little worse than that. But I think about 1% is we still feel that that's the right number for the full year. There's a few drivers here. The main one is really the continued headwind from consumer value-seeking behaviors, and continued channel shifting. That's partially offset by the net revenue management initiatives that we put in place.
Luc Bellet: As you look at our full year outlook, our assumption is the same as the prior outlook, which is we expect price mix to be a little bit of headwind, call it about 1% or so for the full year. So volume would grow slightly ahead of organic sales growth. Now, this might vary a bit by quarter, right? In Q2, we were about flat, and some other quarter might be a little worse than that. But I think about 1% is we still feel that that's the right number for the full year. There's a few drivers here. The main one is really the continued headwind from consumer value-seeking behaviors, and continued channel shifting. That's partially offset by the net revenue management initiatives that we put in place.
Speaker #3: Call it about a percent or so for the full year. So volume would grow slightly ahead of organic sales growth. Now, this might vary a bit by quarter.
Speaker #3: Right? This in the second quarter, we were about flat. And some other quarter might be a little worse than that. But I think the about a point is we still feel that this is the right drivers here.
Speaker #3: number for the full year. There's a few continued headwinds from consumer value-seeking behaviors and continued channel shifting. And that's partially offset by the net revenue management initiatives that we put in
Speaker #3: place.
Linda Rendle: And Filippo, I'll just talk a bit about what we're continuing to see from competition and then your particular question on household, and what we're seeing out there is largely consistent with us. We've seen elevated promotion levels this year versus last year as we expected, but those are in line with historical category rates. And we've called out, and this particularly impacts household, that the cat litter and the trash bag categories are two where we're seeing higher promotional levels. And we're seeing that both in our Glad, Fresh Step, and Scoop Away business. I would say Kingsford has a minimal impact given this is a small quarter for Kingsford. And so we're seeing little impact there. The other thing I would call out is that we continue to see consumers trade to larger sizes in our trash bag business.
Linda Rendle: And Filippo, I'll just talk a bit about what we're continuing to see from competition and then your particular question on household, and what we're seeing out there is largely consistent with us. We've seen elevated promotion levels this year versus last year as we expected, but those are in line with historical category rates. And we've called out, and this particularly impacts household, that the cat litter and the trash bag categories are two where we're seeing higher promotional levels. And we're seeing that both in our Glad, Fresh Step, and Scoop Away business. I would say Kingsford has a minimal impact given this is a small quarter for Kingsford. And so we're seeing little impact there. The other thing I would call out is that we continue to see consumers trade to larger sizes in our trash bag business.
Speaker #1: about what we're continuing to see from competition and then your particular And Filippo, I'll just talk a bit question on household and what we're seeing out there, as largely consistent with this.
Speaker #1: We've seen elevated promotion levels this year versus last year as we expected. But those are in line with historical category rates. And we've called out, and this particularly impacts household, that the CATLR and the trash bag categories are two where we're Higher promotional levels , and we're seeing that both in our glad , fresh step and scoop away I would say Kingsford is a business .
Speaker #1: Minimal given impact, this is a small quarter for Kingsford. Kingsford is minimal given this is a quarter for impact—small Kingsford.
Speaker #1: And so we're seeing impact there. The other thing I would call out is that we continue to see consumers trade to larger sizes in trash bags impacted.
Linda Rendle: And that certainly impacted Glad this quarter as people change channels but are also just looking to stock up and get a better price per unit. But overall, I would say both of those were generally in line with what we expected for the quarter. And we're watching them very closely. And we're being disciplined about how we react when we see promotion. We're trying to do promotion that is strategic and focused. And we're seeing the benefits of that play out in Glad as you saw sequential improvement in that business throughout the quarter.
Linda Rendle: And that certainly impacted Glad this quarter as people change channels but are also just looking to stock up and get a better price per unit. But overall, I would say both of those were generally in line with what we expected for the quarter. And we're watching them very closely. And we're being disciplined about how we react when we see promotion. We're trying to do promotion that is strategic and focused. And we're seeing the benefits of that play out in Glad as you saw sequential improvement in that business throughout the quarter.
Speaker #1: and that's certainly our business , little this channels but quarter as are also Glad just better to looking get a price per stock up and unit .
Speaker #1: But overall , I would say both of line with what generally in we those were for the expected quarter . them very we're watching and And we're being disciplined about how we react when we see promotion .
Speaker #1: We're trying to do promotion . is That strategic and focused , and we're seeing the benefits of that play out . In glad , as you sequential improvement in that business throughout quarter the .
Operator: Our next question will come from Javier Escalante with Evercore ISI.
Operator: Our next question will come from Javier Escalante with Evercore ISI.
Speaker #3: And our next question will come from Javier Escalante with Evercore ISI.
Luc Bellet: Hello. Good morning.
Javier Escalante: Hello. Good morning. Good afternoon, everyone. I have a clarification and a question, actually, a double click. The clarification is, with the ERP already done, so why are we still going to see investment in digital capabilities, or this is going to wrap up this quarter? And if they are going to continue, if you can explain to us what is it that you are spending on that is not related to the ERP but still needs to be separated out from results. So that's the clarification. And number two is double-clicking on the household piece. So it is rare in staples when you have negative volume and negative pricing at the same time.
[Analyst]: Good afternoon, everyone. I have a clarification and a question, actually, a double click. The clarification is, with the ERP already done, so why are we still going to see investment in digital capabilities, or this is going to wrap up this quarter? And if they are going to continue, if you can explain to us what is it that you are spending on that is not related to the ERP but still needs to be separated out from results. So that's the clarification. And number two is double-clicking on the household piece. So it is rare in staples when you have negative volume and negative pricing at the same time.
Speaker #4: Good morning . Good Hello . afternoon everyone . have . A clarification and a I question . Actually a double click . The clarification is with the ERP already done why is .
Speaker #4: So, are you still going to see investment in digital capabilities, or is this going to wrap up this quarter? And if they are going to continue...
Speaker #4: you can If explain us , what is it that you are spending on that is not related to the ERP , but it still need to be separated out from results .
Speaker #4: So that's the clarification . And number two is double clicking on the household piece . is So it rare in staples when you have negative volume and negative pricing at the same time .
[Analyst]: So is this because Scoop Away is driving most of the growth, and this is what solves for negative pricing, or you are taking prices down, say, or promoting Glad and the other brands, and the volume is still negative? So if you can explain that, that would be great. Thank you.
Javier Escalante: So is this because Scoop Away is driving most of the growth, and this is what solves for negative pricing, or you are taking prices down, say, or promoting Glad and the other brands, and the volume is still negative? So if you can explain that, that would be great. Thank you.
Speaker #4: is this because a scoop away is is driving most of the growth . And this is what sulfur negative pricing or you are taking prices down say or promoting glad .
Speaker #4: And the other brands and these they the are volume is still negative . So if you can explain that that would be great .
Peter Grom: Yes. Hi, Javier. Good afternoon.
Luc Bellet: Yes. Hi, Javier. Good afternoon.
Speaker #4: Thank you .
Speaker #5: Yes . Hi , Javier . Good
[Analyst]: Good afternoon. Yes. Sorry.
Javier Escalante: Good afternoon. Yes. Sorry.
Speaker #5: afternoon .
Speaker #4: Good Sorry Yes .
Peter Grom: Let me take your question on the ERP. Yes. We're wrapping up the fundamental investment around the digital transformation, which is really about fundamentally upgrading the digital infrastructure of the company, which included the ERP and the cost suite of technologies. I think there's about $0.08 of adjustment in Q3, and we'll be done on the adjustment associated with the 5-year digital investment roadmap. Now, keep in mind, we've been steadily increasing our investment in technology over the past few years, and that's in the P&L, right? And just as we take advantage of more technology, and actually, as we take advantage of the new digital infrastructure that we put in place, we expect that this will continue. This generally tends to be offset by a lot of productivity savings from automations as well as some effectiveness gain, so.
Luc Bellet: Let me take your question on the ERP. Yes. We're wrapping up the fundamental investment around the digital transformation, which is really about fundamentally upgrading the digital infrastructure of the company, which included the ERP and the cost suite of technologies. I think there's about $0.08 of adjustment in Q3, and we'll be done on the adjustment associated with the 5-year digital investment roadmap. Now, keep in mind, we've been steadily increasing our investment in technology over the past few years, and that's in the P&L, right? And just as we take advantage of more technology, and actually, as we take advantage of the new digital infrastructure that we put in place, we expect that this will continue. This generally tends to be offset by a lot of productivity savings from automations as well as some effectiveness gain, so.
Speaker #5: Let me
Speaker #5: take you question on . . We're wrapping up the investment digital fundamental transformation , which is really fundamentally about upgrading the digital infrastructure of the company , which included ERP and the suite of technologies .
Speaker #5: cost think there's about I $0.08 of adjustment in the third quarter . And , you know , and will be done with all the adjustments associated with the the , the , the five year digital roadmap .
Speaker #5: investment Now , keep in mind we've been steadily increasing our investment in technology over the past few years . And that's in the PNL .
Speaker #5: And right, just as we take advantage of more technology and actually as we take advantage of the new digital infrastructure that we put in place, we expect that this will continue.
Speaker #5: you know , this is This is , generally be by tend to a lot offset of productivity savings from automation as gain . well as So but as far as effectiveness the one time you know , investment , Q3 the last adjustment see an quarter .
Peter Grom: But as far as the one-time investment, Q3 would be the last quarter we see an adjustment. And then on the household, I think just at a high level, there's two things going on. One, there was some loss in consumption and market share. That was really volume-driven. And there was also some shift to larger size, especially in bags and wraps, as well as some channel shiftings that are creating a headwind on the price mix. As I mentioned, it depends on my business, the timing, but every business has a pretty robust net revenue management plan to try to offset this. And I think when you look at the total portfolio for the full year, I think we're able to do this fairly effectively.
Luc Bellet: But as far as the one-time investment, Q3 would be the last quarter we see an adjustment. And then on the household, I think just at a high level, there's two things going on. One, there was some loss in consumption and market share. That was really volume-driven. And there was also some shift to larger size, especially in bags and wraps, as well as some channel shiftings that are creating a headwind on the price mix. As I mentioned, it depends on my business, the timing, but every business has a pretty robust net revenue management plan to try to offset this. And I think when you look at the total portfolio for the full year, I think we're able to do this fairly effectively.
Speaker #5: would be . know , just at And then a high household , I level think , you , going you know , on One , consumption and market share there was some that was really volume driven .
Speaker #5: there was And also some shift loss in to larger size , bags and wraps , as well as from some channel are shiftings that creating a there's two things , headwind on on the price mix .
Speaker #5: As I mentioned , you know , especially it depends by we business the timing . But , you know , every pretty business has robust net revenue management plan to try to offset this .
Speaker #5: And I think when you look at the total portfolio for the full year , we're I think able to do this fairly effectively .
[Analyst]: In the promotional spending, particularly in cat litter, what Circana data shows, and I don't know whether this is reflective of reality or not, but what Circana data suggests is that it's you that is promoting, it's not competitors. Is that the case that is reflective of what is the negative price mix that you have in the P&L? Thank you.
Javier Escalante: In the promotional spending, particularly in cat litter, what Circana data shows, and I don't know whether this is reflective of reality or not, but what Circana data suggests is that it's you that is promoting, it's not competitors. Is that the case that is reflective of what is the negative price mix that you have in the P&L? Thank you.
Speaker #5: .
Speaker #4: competitors . Is that the case is ? That reflective of what is the have in that you price mix PNL ? negative Thank you .
Linda Rendle: Javier, what we see is the overall category merchandising is certainly higher. We see that for competitors, and it is true that we have higher promotional levels as well, and we did that intentionally as we're building back some share. You're also seeing a significant amount of promotion for Scoop Away from Costco, which can create noise because that's a large promotion and can significantly impact the results. And those events, given a lot of people are moving to Costco, have become much more sizable over the last 12 months. So I think that's the combination of the two things that you're seeing: Scoop Away having a disproportionate impact on the amount of merchandising that you see from us in Circana, but we are seeing overall competitors raising their level of promotion as well, which is just making an overall competitive category nothing different than what we had expected.
Linda Rendle: Javier, what we see is the overall category merchandising is certainly higher. We see that for competitors, and it is true that we have higher promotional levels as well, and we did that intentionally as we're building back some share. You're also seeing a significant amount of promotion for Scoop Away from Costco, which can create noise because that's a large promotion and can significantly impact the results. And those events, given a lot of people are moving to Costco, have become much more sizable over the last 12 months. So I think that's the combination of the two things that you're seeing: Scoop Away having a disproportionate impact on the amount of merchandising that you see from us in Circana, but we are seeing overall competitors raising their level of promotion as well, which is just making an overall competitive category nothing different than what we had expected.
Speaker #1: Javier . What we see is overall the category . Merchandising is certainly higher . We see that for competitors . And it is true that we have higher promotional levels as well .
Speaker #1: And we did that intentionally as we're building back some share. You're also seeing a significant amount of promotion for Scoop Away from Costco, which can create noise—that's because it's a large promotion and can significantly impact the results.
Speaker #1: Those end events, given a lot of people are moving to Costco, have become much more sizable over the last 12— I think that's the months.
Speaker #1: So combination of the two things that you're seeing . Scoop away having a disproportionate impact on the amount of merchandising that you see from us in Sakana , but we are seeing overall competitors raising of promotion their level as well , and which is just making an overall competitive category .
Linda Rendle: Those are the two main factors that we see playing in the category.
Linda Rendle: Those are the two main factors that we see playing in the category.
Speaker #1: Different than what we had expected. But those are nothing—the two main factors that we're seeing play in the category.
[Analyst]: Thank you very much.
Javier Escalante: Thank you very much.
Linda Rendle: Thanks, Javier.
Linda Rendle: Thanks, Javier.
Peter Grom: Thanks, Javier.
Luc Bellet: Thanks, Javier.
Speaker #4: Thank much . you very
Operator: Our next question comes from Bonnie Herzog with Goldman Sachs.
Speaker #1: Thanks ,
Operator: Our next question comes from Bonnie Herzog with Goldman Sachs.
Speaker #1: Javier .
Speaker #5: Thanks , Javier .
Speaker #3: And our next question comes from Bonnie Herzog with Goldman Sachs .
Bonnie Herzog: All right. Thank you. Hi, everyone. I actually wanted to stick on household, if I may, and I just maybe ask a little differently. Organic sales remain quite pressured despite your stepped-up promotions behind trash and litter, as you highlighted. But if I look at it that way, then I see the pressures are also, I assume, negatively impacting your margins in the quarter. In addition to the higher manufacturing logistic costs you called out, when you look at the margins in the quarter, they were even margins. This is, they were only 5.3%. So I guess, could you talk about your strategy behind trash and litter and how much further you're willing to promote to try and improve share? I guess, essentially, how are you balancing a return to growth with profitability? Thanks.
Bonnie Herzog: All right. Thank you. Hi, everyone. I actually wanted to stick on household, if I may, and I just maybe ask a little differently. Organic sales remain quite pressured despite your stepped-up promotions behind trash and litter, as you highlighted. But if I look at it that way, then I see the pressures are also, I assume, negatively impacting your margins in the quarter. In addition to the higher manufacturing logistic costs you called out, when you look at the margins in the quarter, they were even margins. This is, they were only 5.3%. So I guess, could you talk about your strategy behind trash and litter and how much further you're willing to promote to try and improve share? I guess, essentially, how are you balancing a return to growth with profitability? Thanks.
Speaker #6: right . Thank you . Hi All everyone . I actually wanted to stick on household , And I if I may . just maybe asked a little differently .
Speaker #6: Organic sales remain quite pressured . You know , despite your stepped up promotions behind trash and litter . As you you But highlighted .
Speaker #6: , you know , if I look at it that way and then I pressures see the are also I assume negatively impacting your margins in the quarter in addition to the higher manufacturing logistics costs , you called out , you know , when you margins look at the in the quarter , they were even margins .
Speaker #6: This is you know , they were only 5.3% . So I guess could you talk about your strategy behind trash and litter ? And you know , how much further you're willing promote to to ?
Speaker #6: guess improve Share , I try and how are , essentially , you balancing a return to growth with profitability ? Thanks .
Linda Rendle: Hi, Bonnie. Yeah. We've been talking about the trash bag and litter category for a little bit of time now. Certainly, both of those were impacted as we talked about coming out of cyber and then certainly a change in competitive activity that we've seen, particularly in the trash bag segment. We have returned to what we believe the best way to return a category to growth is, which is doubling down on our innovation plans. We worked hard over the last 18 months to refresh our innovation plans on both Glad and litter. You're going to see those come to fruition in the back half of this year. As I mentioned, we have a full relaunch of our litter business that includes Price Pack Architecture work, some upgrades in formulas, packaging, etc.
Linda Rendle: Hi, Bonnie. Yeah. We've been talking about the trash bag and litter category for a little bit of time now. Certainly, both of those were impacted as we talked about coming out of cyber and then certainly a change in competitive activity that we've seen, particularly in the trash bag segment. We have returned to what we believe the best way to return a category to growth is, which is doubling down on our innovation plans. We worked hard over the last 18 months to refresh our innovation plans on both Glad and litter. You're going to see those come to fruition in the back half of this year. As I mentioned, we have a full relaunch of our litter business that includes Price Pack Architecture work, some upgrades in formulas, packaging, etc.
Speaker #1: Bonnie Hi , . Yeah . You know , we've been talking about the trash bag and litter category for a little bit of time now .
Speaker #1: And both of those were certainly impacted as we talked about coming out of cyber . And then certainly a competitive change in activity that we've seen the , particularly in trash bag segment .
Speaker #1: And we have returned to believe the best way to what we return category to a growth is , which is doubling down on our innovation plans .
Speaker #1: And hard we worked over the last 18 months to our innovation plans on both . refresh Glad and Litter . And going to see you're those fruition in come to half of this year .
Speaker #1: I mentioned , we have a full relaunch of our litter business that price tag includes architecture work , some upgrades and formulas , packaging , etc.
Linda Rendle: Then we feel like we have a grid, robust innovation plan for the remaining 2 to 3 years coming after that, which really gets back to growing the category the way that we like to do and want to do, which is investing in better consumer experiences that deliver superior value. And trash, much the same. We have great innovation in the back half. We have been doing some price promotion, and we've been disciplined about trying to do that because we want to make sure that we're doing it in a way that doesn't destroy value in the category. We know people don't use more trash bags just because they are a lower price per bag. They want benefits in a trash bag that help make their life easier at home. They don't want it to leak. They don't want it to smell.
Linda Rendle: Then we feel like we have a grid, robust innovation plan for the remaining 2 to 3 years coming after that, which really gets back to growing the category the way that we like to do and want to do, which is investing in better consumer experiences that deliver superior value. And trash, much the same. We have great innovation in the back half. We have been doing some price promotion, and we've been disciplined about trying to do that because we want to make sure that we're doing it in a way that doesn't destroy value in the category. We know people don't use more trash bags just because they are a lower price per bag. They want benefits in a trash bag that help make their life easier at home. They don't want it to leak. They don't want it to smell.
Speaker #1: And then we feel like we have a robust innovation plan for the remaining, after that, two to three years coming, which really gets back to growing the category the way that we do and like to want to do, which is investing in better consumer deliver, superior experiences that value trash and much same.
Speaker #1: We have great innovation in the back half . We have some price promotion been been and we've disciplined about doing that because we want to make sure that trying to do it in a we're doing way that doesn't destroy value in the .
Speaker #1: category We know people don't use more trash just they are a lower price bags per bag . They want benefits in a trash because help bag that make their life easier at home .
Speaker #1: They don't want leak . They don't want it to it to smell . want it to tear . They don't And so we continue to invest in that .
Linda Rendle: They don't want it to tear. And so we continue to invest in that. And that's exactly the balance, Bonnie, you spoke about. We want to make sure that we are balancing market share, consumption data, and profitability with growing the category in a way that we think is sustainable. And what we're happy to see is our back half plan really leans into that. But we haven't been afraid to increase some price promotion in the short term to deal with the headwinds that we've been experiencing.
Linda Rendle: They don't want it to tear. And so we continue to invest in that. And that's exactly the balance, Bonnie, you spoke about. We want to make sure that we are balancing market share, consumption data, and profitability with growing the category in a way that we think is sustainable. And what we're happy to see is our back half plan really leans into that. But we haven't been afraid to increase some price promotion in the short term to deal with the headwinds that we've been experiencing.
Speaker #1: And that's exactly the Bonnie , you balance . spoke about . We want to make that we are sure balancing market share and consumption data and profitability with growing the in a way that we think is sustainable .
Speaker #1: And and what we're happy to see is our back half plan really leans into that . But we haven't been afraid to to increase some price promotion in the short term to deal with the headwinds that we've been experiencing .
Linda Rendle: I think over the long term, we remain confident that we can grow these categories through good innovation work, strong demand spending and building, continuing to drive efficiencies in that spend, and, of course, making sure that we are doing all the great margin work that we've done for the last few years in the company and for, frankly, decades before that to continue to fund that. And we have strong programs in both our Glad and our cat litter businesses internally. So overall, I don't think anything's changed strategically. These categories are competitive, but we do well in competitive categories. I can't say that we would say our last 12 months have been our best performance in these categories, but we feel like we have the right plans moving forward to address that and have taken the right short-term steps to ensure that we get that balance right.
Linda Rendle: I think over the long term, we remain confident that we can grow these categories through good innovation work, strong demand spending and building, continuing to drive efficiencies in that spend, and, of course, making sure that we are doing all the great margin work that we've done for the last few years in the company and for, frankly, decades before that to continue to fund that. And we have strong programs in both our Glad and our cat litter businesses internally. So overall, I don't think anything's changed strategically. These categories are competitive, but we do well in competitive categories. I can't say that we would say our last 12 months have been our best performance in these categories, but we feel like we have the right plans moving forward to address that and have taken the right short-term steps to ensure that we get that balance right.
Speaker #1: I think over the long term , we remain confident that we can grow these categories through good innovation work , strong demands , spending and building , continuing to drive efficiencies in that spend and of course , making are doing all the sure that we that we've done margin work for the last few years in the company .
Speaker #1: And for frankly , decades that , to continue before that . And we have strong programs in both our our to fund glad and our cat litter businesses internally .
Speaker #1: So overall , I don't think changed strategically . These anything has competitive , but we in categories are competitive do well categories . I can't say that we 12 months have been would say our last performance in these categories , but like we have the right plans .
Speaker #1: Moving forward to address that . our best And have short term taken the right to steps ensure that we we get that balance right .
Bonnie Herzog: All right. Thank you for that color. I'll pass it on.
Bonnie Herzog: All right. Thank you for that color. I'll pass it on.
Linda Rendle: Thanks, Bonnie.
Linda Rendle: Thanks, Bonnie.
Speaker #6: All right . Thank you for that color . I'll pass it on .
Operator: And we'll move next to Anna Lizzul with Bank of America.
Operator: And we'll move next to Anna Lizzul with Bank of America.
Speaker #1: Thanks , Bonnie .
Speaker #3: And we'll move next to Ann with Bank of Azul America.
Anna Lizzul: Hi. Good afternoon. Thank you so much for the question. Linda, I was wondering if you could comment on where you are now post the quarter versus the category growth rate in light of the improvement that you're seeing in consumption trends. And then where do you think category growth would have to be to get back to meet your longer-term algorithm with your Ignite strategy of 3% to 5% net sales growth? Thanks.
Anna Lizzul: Hi. Good afternoon. Thank you so much for the question. Linda, I was wondering if you could comment on where you are now post the quarter versus the category growth rate in light of the improvement that you're seeing in consumption trends. And then where do you think category growth would have to be to get back to meet your longer-term algorithm with your Ignite strategy of 3% to 5% net sales growth? Thanks.
Speaker #7: Hi . Good afternoon . you so Thank much for the question , Linda . I was could wondering if you comment on where you are now .
Speaker #7: Post the quarter versus the category growth rate of the in light that you're improvement seeing in consumption And trends . then where do you think growth would have to be category to get back to meet your longer term algorithm with strategy of 3 to 5% net sales growth ?
Linda Rendle: Hi, Anna. Yeah. So we'll walk through Q1 and Q2 again and then just what we expect in the back half and then bridge to what we expect over the longer term. So in Q1 and Q2, we saw our categories about flat. So in line with what we had expected, recall we had expected about flat to up 1. January, I would just advise if you look at any actually, any time period beyond January, there's a lot of noise in the data. So I would not look at a 1-week or even 4 or 5-week category number and project from that. For example, January has significant weather-related events, and that will have many impacts. One, consumers stocked up. But two, you can have challenges dealing with weather in retailer inventory, etc. None of that has played out yet. So we'll see what those impacts are.
Linda Rendle: Hi, Anna. Yeah. So we'll walk through Q1 and Q2 again and then just what we expect in the back half and then bridge to what we expect over the longer term. So in Q1 and Q2, we saw our categories about flat. So in line with what we had expected, recall we had expected about flat to up 1. January, I would just advise if you look at any actually, any time period beyond January, there's a lot of noise in the data. So I would not look at a 1-week or even 4 or 5-week category number and project from that. For example, January has significant weather-related events, and that will have many impacts. One, consumers stocked up. But two, you can have challenges dealing with weather in retailer inventory, etc. None of that has played out yet. So we'll see what those impacts are.
Speaker #7: Thanks .
Speaker #1: Anna, hi. Yeah, so if you will walk through Q2 again, and then just what we expect in Q1 and the half, then bridge to what we, over the longer term, expect.
Speaker #1: So in Q1 and Q2 , we saw categories about flat . So in line with what we had expected , we recall we had expected about flat to up one .
Speaker #1: January . I would just advise if you look any at actually any time period beyond January , there's a lot of noise in the data .
Speaker #1: So I would not look at a week or one even 4 or 5 week category number and project from that . For has significant weather related events and example , January have many impacts .
Speaker #1: One , consumers stocked up two , you can , but have , you know , challenges dealing with weather in retailer inventory , etc.
Speaker #1: of that has played and none out yet . So we'll see what those impacts are . And then of course , we'd assume will use consumers that household inventory and might not might extend their purchase cycle depending on how much they did stock up in advance of that .
Linda Rendle: And then, of course, we'd assume consumers will use that household inventory and might extend their purchase cycle depending on how much they did stock up in advance of that. So I would warn not to look at the last two weeks as a significant change in the category trajectory, but simply, I think, some shifting in timing given what's going on with weather. That being said, we still expect the consumer to remain under pressure. And that means we expect categories to be flat to up 1 in the back half of the year. We certainly hope we could get to the top end of that range given the plans that we have. But we'll see how that plays out and what the consumer decides to do.
Linda Rendle: And then, of course, we'd assume consumers will use that household inventory and might extend their purchase cycle depending on how much they did stock up in advance of that. So I would warn not to look at the last two weeks as a significant change in the category trajectory, but simply, I think, some shifting in timing given what's going on with weather. That being said, we still expect the consumer to remain under pressure. And that means we expect categories to be flat to up 1 in the back half of the year. We certainly hope we could get to the top end of that range given the plans that we have. But we'll see how that plays out and what the consumer decides to do.
Speaker #1: So warn I would not to look at the last two weeks as a significant change in the category trajectory . But but simply , I think some shifting and timing , given what's going on with weather .
Speaker #1: That being said , we still expect the consumer to remain under pressure and we expect that means categories to be flat to up one in the back half of the year .
Speaker #1: We certainly hope we could get to the top end of that range, given the plans that we have. But we'll see how that plays out.
Speaker #1: And what the decides to do . We just feel like we consumer right plans have the to both support category growth and share growth within those categories , whether that be innovation , the base distribution that we're working on with retailers , our demand spending and plans , which is very strong .
Linda Rendle: We just feel like we have the right plans to both support category growth and share growth within those categories, whether that be innovation, the base distribution that we're working on with retailers, our demand spending, and plans, which is very strong. So we feel like we're doing everything we can to continue to support getting back to category growth that is in line with what we've experienced in the past. And that leads me to our Ignite strategy algorithm. We assume for us to get to that 3% to 5% range that categories have to return to what they were historically. And that's typically been about 2% to 2.5%. And then we're able to add a point of incremental growth from our pro and international business. And that gets you well within our Ignite range.
Linda Rendle: We just feel like we have the right plans to both support category growth and share growth within those categories, whether that be innovation, the base distribution that we're working on with retailers, our demand spending, and plans, which is very strong. So we feel like we're doing everything we can to continue to support getting back to category growth that is in line with what we've experienced in the past. And that leads me to our Ignite strategy algorithm. We assume for us to get to that 3% to 5% range that categories have to return to what they were historically. And that's typically been about 2% to 2.5%. And then we're able to add a point of incremental growth from our pro and international business. And that gets you well within our Ignite range.
Speaker #1: So we doing feel like we're everything we can to continue to support getting back to category growth . That is in line with what we've experienced in the past , and that leads me to our ignite strategy algorithm .
Speaker #1: We assume for us to get to that 3 to 5% range , that categories have to return to what they were historically . And that's typically been about 2 to 2.5% .
Speaker #1: And then we're able to add a point of incremental growth from our international business. And that gets you within our well-ignited range.
Linda Rendle: Of course, we talked about the acquisition that we made of Gojo, and we believe that will be a creative to growth as well in support of us getting to the growth algorithm that Ignite contemplated in the 3% to 5% range. We don't see that yet, obviously, this year in our categories. But we're hoping now, as we continue to invest and others continue to invest in the consumer and in innovation, that we'll start to see that build over time.
Linda Rendle: Of course, we talked about the acquisition that we made of Gojo, and we believe that will be a creative to growth as well in support of us getting to the growth algorithm that Ignite contemplated in the 3% to 5% range. We don't see that yet, obviously, this year in our categories. But we're hoping now, as we continue to invest and others continue to invest in the consumer and in innovation, that we'll start to see that build over time.
Speaker #1: And of course , we talked about the acquisition that we made up of Gojo . And we would believe we believe that will be accretive to growth as well .
Speaker #1: And supportive of us getting to the growth algorithm that ignite contemplated in the 3 to 5% range . We don't see that yet .
Speaker #1: Obviously , this year in our categories , but we hoping we're we now as as continue to invest and others continue to invest in the consumer and in innovation , that will start to see that build over time .
Anna Lizzul: Great. Very helpful. Thanks so much.
Anna Lizzul: Great. Very helpful. Thanks so much.
Linda Rendle: Thanks, Anna.
Linda Rendle: Thanks, Anna.
Speaker #7: Great . Very helpful . Thanks so much .
Operator: We'll move next to Kevin Grundy with BNP Paribas.
Operator: We'll move next to Kevin Grundy with BNP Paribas.
Speaker #1: Thanks , Anna
Speaker #3: we'll move next to Kevin
Speaker #3: Paribas Grundy BNP with. And.
Kevin Grundy: Hey. Good afternoon, everyone.
Kevin Grundy: Hey. Good afternoon, everyone.
Speaker #8: afternoon Hey , good everyone . I'd like to ask you both a question on on price investment . It's topical today with with the PepsiCo news .
Linda Rendle: Kevin.
Linda Rendle: Kevin.
Kevin Grundy: I'd like to ask you both a question on price investment. It's topical today with the PepsiCo news, and obviously, you don't compete in their categories. But what is relevant is the consumer under pressure, the K-shaped economy, etc., etc. So Pepsi's making substantial price investments. They're embarking on a lot of productivity to do it. Your categories have been weak for a while. You're not alone, Linda and Luc, of course. But we've been talking about this for a while. Would you be willing to take price investments off the table for your categories, particularly where volumes have been weak for a while, whether this is bags or whether this is bleach, etc.? Because you talked about innovation, Linda. We would all collectively agree that's exactly how you want to win. But maybe it's not an either/or.
Kevin Grundy: I'd like to ask you both a question on price investment. It's topical today with the PepsiCo news, and obviously, you don't compete in their categories. But what is relevant is the consumer under pressure, the K-shaped economy, etc., etc. So Pepsi's making substantial price investments. They're embarking on a lot of productivity to do it. Your categories have been weak for a while. You're not alone, Linda and Luc, of course. But we've been talking about this for a while. Would you be willing to take price investments off the table for your categories, particularly where volumes have been weak for a while, whether this is bags or whether this is bleach, etc.? Because you talked about innovation, Linda. We would all collectively agree that's exactly how you want to win. But maybe it's not an either/or.
Speaker #8: And obviously you don't compete in their categories , but what is relevant is the consumer under pressure . UK shaped economy . ET cetera .
Speaker #8: Et cetera. So is Pepsi making substantial price investments there, embarking on a lot of productivity to do it? Your categories have been weak for a while.
Speaker #8: You're not alone . Of course . But you know , we've been talking about a this for while . Would you be willing to take price investments the off for your , particularly where volumes have been weak for while ?
Speaker #8: Whether this is bags or whether this is bleach , etc. ? Because you about Linda , we innovation , collectively agree that's exactly how you win .
Kevin Grundy: Maybe it's a both/and, like we're seeing at PepsiCo, given the unprecedented level of, excuse me, of inflation that we haven't seen in four decades and a consumer that's still under pressure. Would you take that off the table?
Kevin Grundy: Maybe it's a both/and, like we're seeing at PepsiCo, given the unprecedented level of, excuse me, of inflation that we haven't seen in four decades and a consumer that's still under pressure. Would you take that off the table?
Speaker #8: want to but maybe But an either it's not or . a both . Maybe it's And like we're PepsiCo innovation of excuse me , level of , given the unprecedented seeing in inflation that seen we haven't of decades , and the consumer that's still under pressure .
Speaker #8: Would you, would you take that off the table?
Linda Rendle: Thanks for the question, Kevin. Maybe just start with what we're seeing from the consumer, which I think is largely consistent with what you just outlined and what we've seen from some competitors as they've spoken out or people who aren't even competing in our categories. We're definitely continuing to see bifurcation of consumers. We continue to see all consumer groups under pressure. But I would note that we have seen from low-income consumers some additional pressure. And making sure that we have the right value for those consumers is absolutely top of mind. And that is what we're doing in the capability that we've built on RGM to ensure that we have the right Price Pack Architecture, so getting them supported with smaller sizes for consumers who only have a little bit of cash to outlay, larger sizes, etc.
Linda Rendle: Thanks for the question, Kevin. Maybe just start with what we're seeing from the consumer, which I think is largely consistent with what you just outlined and what we've seen from some competitors as they've spoken out or people who aren't even competing in our categories. We're definitely continuing to see bifurcation of consumers. We continue to see all consumer groups under pressure. But I would note that we have seen from low-income consumers some additional pressure. And making sure that we have the right value for those consumers is absolutely top of mind. And that is what we're doing in the capability that we've built on RGM to ensure that we have the right Price Pack Architecture, so getting them supported with smaller sizes for consumers who only have a little bit of cash to outlay, larger sizes, etc.
Speaker #1: the Thanks for question , Kevin . Maybe just with what start we're seeing consumer , which from the I think is largely what you just consistent with and what outlined we've some competitors from they've out or people who is in our aren't even categories .
Speaker #1: definitely continuing to see We're bifurcation of We continue all to see under consumer groups pressure . But I would consumers . note that have seen we from low income consumers some additional and and pressure making sure that the right we have value for those consumers is absolutely top of mind .
Speaker #1: And that is what we're doing in capability that the we've on our GM ensure that to we have built price . right Pack architecture .
Speaker #1: So getting them the supported with smaller sizes for who consumers a little bit of only have cash to outlay larger sizes , etc. , and the program with purpose of that just that .
Linda Rendle: The purpose of that program is to deal with just that. And it's more important than ever that we have that capability, and we're beginning to ramp that up. And we've had some success in a number of businesses, but we need to, frankly, expand it faster across our portfolio. That being said, on price investments, we have made some. And I think that's what you've seen in some of the promotional activity that we've done. We have made selective price investments in places where we're seeing the consumer be under more pressure. Certainly, trash bags is one of them. We've seen a bit more in home care, and we continue to do that in a disciplined manner. But our team's looking at this all the time. And we're committed to making sure that our price gaps are where they need to be.
Linda Rendle: The purpose of that program is to deal with just that. And it's more important than ever that we have that capability, and we're beginning to ramp that up. And we've had some success in a number of businesses, but we need to, frankly, expand it faster across our portfolio. That being said, on price investments, we have made some. And I think that's what you've seen in some of the promotional activity that we've done. We have made selective price investments in places where we're seeing the consumer be under more pressure. Certainly, trash bags is one of them. We've seen a bit more in home care, and we continue to do that in a disciplined manner. But our team's looking at this all the time. And we're committed to making sure that our price gaps are where they need to be.
Speaker #1: it's more And important is to deal than ever that we have that capability , and we're beginning to number of in a success ramp that we've had up .
Speaker #1: it's more And important is to deal than ever that we have that capability , and we're beginning to number of in a success ramp that we've had up . some businesses , but we to frankly , need faster expand it And across our .
Speaker #1: That portfolio being said, on price we have made investment. We have made some, and I think that's what you've seen in some of the promotional activity that we've done. We have made selective price investments in places where we're seeing the consumer be under more pressure.
Speaker #1: Certainly, trash bags is one of them. We've seen a bit more in home and continue to do that in a disciplined manner.
Speaker #1: our team But is looking at this all the time and we're committed to making sure that our price where they need to be gaps are , and we do not want to get in a place where we're losing significant household with consumers or share price is out of because our So you my can hear commitment whack .
Linda Rendle: We do not want to get in a place where we're losing significant household penetration with consumers or share because our price is out of whack. You can hear my commitment to, if we need to make a price reduction, that a strategic will do it. The good news is we've built a Holistic Margin Management capability to be able to fund that if we need to do it. Again, we have made some of those investments over the last 12 months, as we've noticed, for out of whack on a certain size or a certain price point. It'll be something that we'll watch very closely. The other thing I would note is, in our categories, we have not seen significant trade down to private label. The last quarter, private label was up 0.1 share points, and we didn't see any material change.
Linda Rendle: We do not want to get in a place where we're losing significant household penetration with consumers or share because our price is out of whack. You can hear my commitment to, if we need to make a price reduction, that a strategic will do it. The good news is we've built a Holistic Margin Management capability to be able to fund that if we need to do it. Again, we have made some of those investments over the last 12 months, as we've noticed, for out of whack on a certain size or a certain price point. It'll be something that we'll watch very closely. The other thing I would note is, in our categories, we have not seen significant trade down to private label. The last quarter, private label was up 0.1 share points, and we didn't see any material change.
Speaker #1: to need to make a if we price reduction , a it . And strategic will do the good news is we've built a holistic margin management capability to be fund that .
Speaker #1: If we need to, we are able to do it. And again, we have made some of those investments over the last 12 months.
Speaker #1: Noticed, as we've said, we're, you know, a little out of whack on a size or price point. It'll be something we'll watch very closely.
Speaker #1: The other thing I certain would note is in our categories , we have not seen significant trade private that down to label . private label last was up a 10th of a SharePoint .
Linda Rendle: Consumers still want brands. And we just need to figure out the right way to make sure we're giving them the right price, the right pack at the right moment at the right retailer. And I feel like our back half plans better contemplate that. But again, Kevin, I'm not taking it off the table, but we'll do it in a disciplined way. And now, with our RGM capabilities, we have even more ability to do that at scale.
Linda Rendle: Consumers still want brands. And we just need to figure out the right way to make sure we're giving them the right price, the right pack at the right moment at the right retailer. And I feel like our back half plans better contemplate that. But again, Kevin, I'm not taking it off the table, but we'll do it in a disciplined way. And now, with our RGM capabilities, we have even more ability to do that at scale.
Speaker #1: didn't And we change . Consumers material still want brands and we just need to figure out the right way to make sure we're right giving them the see any right pack , at the right moment , at the right retailer feel like our back half .
Speaker #1: plans better contemplate that . But again , Kevin , I'm not taking it off the table , And I but we'll do it in a disciplined way .
Speaker #1: And now with our capabilities , we have even more ability to do that at scale .
Speaker #1: And now, with our capabilities, we have even more ability to do that at scale—RGM.
Kevin Grundy: Okay. Thank you very much. I'll pass it on.
Kevin Grundy: Okay. Thank you very much. I'll pass it on.
Speaker #8: You very much. Thank you. I'll pass it on.
Operator: And we'll move next to Olivia Tong with Raymond James.
Operator: And we'll move next to Olivia Tong with Raymond James.
Speaker #3: We'll move next to Olivia Tong Raymond with James.
Olivia Tong: Great. Thanks. The promotional environment has obviously been heightened for some time and doesn't seem to be abating. And as more sales go to club, e-com, and larger pack sizes, can you talk about what initiatives you have or are putting in place sort of longer term to help offset what could, I assume, be multi-year headwinds? And then can you also talk about what inventory levels look like at retail outside of club and e-com post-CRP? Is there any risk that, as activity continues to shift outside of these channels, that you run the risk of having to deal with destocking in the next 12 months more so than your peers? Thank you.
Olivia Tong: Great. Thanks. The promotional environment has obviously been heightened for some time and doesn't seem to be abating. And as more sales go to club, e-com, and larger pack sizes, can you talk about what initiatives you have or are putting in place sort of longer term to help offset what could, I assume, be multi-year headwinds? And then can you also talk about what inventory levels look like at retail outside of club and e-com post-CRP? Is there any risk that, as activity continues to shift outside of these channels, that you run the risk of having to deal with destocking in the next 12 months more so than your peers? Thank you.
Speaker #10: Great . Thanks . The promotional environment has been heightened obviously for some time , and it doesn't seem to be abating . And sales as more go to club and and larger pack sizes , E-comm can you talk about what initiatives you have putting in place ?
Speaker #10: or are Sort of longer term to help offset what could I assume be multiyear headwinds ? And then multi-year , also talk about what inventory levels look look at like at retail of club and E-comm outside post CRP ?
Speaker #10: Is there any risk that you know, if activity shift continues to outside of these channels that you run, you run the risk of having to deal with destocking in the next 12 months, more than your peers?
Speaker #10: so than Thank you .
Linda Rendle: I'll take both of those, Olivia. So on the large sizes, this has been a trend on our business for quite a while. We've seen consumers move to value channels, including club. But they've also been moving to dollar, and that has the opposite effect, where they tend to buy smaller sizes. And we've been able to manage this for many years and would expect we'd be able to do that moving forward. And it's a little bit about the question that Kevin had. The RGM capabilities that we are building are going to enable us to do this faster, at scale, and with more data. We did a lot of work in our ERP implementation to harmonize our data across the company.
Linda Rendle: I'll take both of those, Olivia. So on the large sizes, this has been a trend on our business for quite a while. We've seen consumers move to value channels, including club. But they've also been moving to dollar, and that has the opposite effect, where they tend to buy smaller sizes. And we've been able to manage this for many years and would expect we'd be able to do that moving forward. And it's a little bit about the question that Kevin had. The RGM capabilities that we are building are going to enable us to do this faster, at scale, and with more data. We did a lot of work in our ERP implementation to harmonize our data across the company.
Speaker #1: I'll take both of those . Olivia . So on large the sizes , this has on our business been a trend for quite a while .
Speaker #1: We've seen consumers value channels , including move to club , but they've moving to dollar . And that has the opposite effect , where they tend to smaller sizes also been buy .
Speaker #1: able to And we've been this for manage many years and would expect we'd be able to do that . Moving forward . And it's a little bit about to to the question that Kevin had , the Rjm that we are capabilities building are going to enable us to do this at scale and with more faster and data .
Speaker #1: lot of work did a We in our ERP implementation to harmonize our data across the company , and that's giving us more real time insights that allow us .
Linda Rendle: And that's giving us more real-time insights that allow us to design exactly the right pack for the consumer, for the right retailer, and also, at the same time, remove costs where we can. So we feel like we have a capability for a long time, but adding RGM gives us additional capability to address this. And I think the good news is we want to be wherever a consumer is. If they're in club, we want to be there. If they're in dot-com, we want to be there. If they're buying at a small grocery store, we want to ensure that we're there with the right price and pack. And we've been able to do that for many years and been able to absorb and, frankly, fund it through our margin work.
Linda Rendle: And that's giving us more real-time insights that allow us to design exactly the right pack for the consumer, for the right retailer, and also, at the same time, remove costs where we can. So we feel like we have a capability for a long time, but adding RGM gives us additional capability to address this. And I think the good news is we want to be wherever a consumer is. If they're in club, we want to be there. If they're in dot-com, we want to be there. If they're buying at a small grocery store, we want to ensure that we're there with the right price and pack. And we've been able to do that for many years and been able to absorb and, frankly, fund it through our margin work.
Speaker #1: To design exactly the right pack for the right consumer, for the right retailer, and also at the same time, remove costs where we can.
Speaker #1: So we have we feel like a capability for a long adding time . But rjm gives us additional capability to address this . And I think the good news is , know , we want to be wherever , wherever a consumer is , if you want to be there .
Speaker #1: If they're in dot com , we want to be there . If at a small grocery store , we want to ensure that we're there with the right price and pack .
Speaker #1: and we've been able to do that for many years and been able to absorb . And through our fund it margin work . frankly I one thing should note , think the you though , I think that is important for our portfolio , is the point I made on dollar and smaller is a corresponding sizes .
Linda Rendle: I think the one thing you should note, though, and I think that is important for our portfolio, is the point I made on dollar and smaller sizes. There is a corresponding downward pressure on sizing as well. That will offset some of the trade-up that we're seeing to larger sizes. That is why you're seeing, I think, the price mix that you're seeing right now for the company, that some of those things are offsetting each other. I would expect that to continue given the strength of the dollar channel and consumers having low out-of-pocket expenditures. I think that will keep that in a reasonable range for the next couple of years. We're well-positioned as consumers continue to move to different retailers to address that as well.
Linda Rendle: I think the one thing you should note, though, and I think that is important for our portfolio, is the point I made on dollar and smaller sizes. There is a corresponding downward pressure on sizing as well. That will offset some of the trade-up that we're seeing to larger sizes. That is why you're seeing, I think, the price mix that you're seeing right now for the company, that some of those things are offsetting each other. I would expect that to continue given the strength of the dollar channel and consumers having low out-of-pocket expenditures. I think that will keep that in a reasonable range for the next couple of years. We're well-positioned as consumers continue to move to different retailers to address that as well.
Speaker #1: pressure on sizing as well , and that will offset some that we're trade up of the larger seeing to sizes . And that is why you're seeing , I think the price mix seeing right that you're the company that some of those now for things are offsetting each other .
Speaker #1: pressure on sizing as well , and that will offset some that we're trade up of the larger seeing to sizes . And that is why you're seeing , I think the price mix seeing right that you're the company that some of those now for things are offsetting each There And I would expect that to continue , given the strength of the Dollar channel and consumers having low out of pocket expenditures .
Speaker #1: And I think that will keep in a range for the reasonable next couple of years. And we're well positioned, as consumers continue to move to different retailers, to address that as well.
Linda Rendle: And then on inventory levels and destocking, largely, if you look across our enterprise, inventory levels are where we would expect them to be in retail. There's always puts or takes here and there, but we wouldn't call out anything material that we see at this moment that would impact a potential destocking for us versus anyone else.
Linda Rendle: And then on inventory levels and destocking, largely, if you look across our enterprise, inventory levels are where we would expect them to be in retail. There's always puts or takes here and there, but we wouldn't call out anything material that we see at this moment that would impact a potential destocking for us versus anyone else.
Speaker #1: And then on inventory levels and destocking, largely, if you look across our enterprise, inventory levels are where we would expect them to be in retail.
Speaker #1: There's always puts or takes we wouldn't there , but here and call out anything material that this that we see at that would impact our potential destocking for us versus anyone else .
Olivia Tong: Great. Thank you.
Olivia Tong: Great. Thank you.
Linda Rendle: Thanks, Olivia.
Linda Rendle: Thanks, Olivia.
Speaker #10: Great . Thank .
Operator: We'll move next to Kaumil Gajrawala with Jefferies.
Operator: We'll move next to Kaumil Gajrawala with Jefferies.
Speaker #1: Thanks , Olivia .
Speaker #3: And we'll move next to Cuomo Gajrawala with Jefferies .
Kaumil Gajrawala: Hey, everyone. On ERP, it looks like the last of the big phases is complete. Can you maybe just talk about what you should be able to do now, what you see, maybe some cadence of benefits that flow through, whether they're things that are driving top line or things that are driving savings? And maybe, I think, Luc, you mentioned some of it will be automation and such. And so should there be a different goal or a new goal on where gross margins can go now that a lot of that hard work is behind you?
Kaumil Gajrawala: Hey, everyone. On ERP, it looks like the last of the big phases is complete. Can you maybe just talk about what you should be able to do now, what you see, maybe some cadence of benefits that flow through, whether they're things that are driving top line or things that are driving savings? And maybe, I think, Luc, you mentioned some of it will be automation and such. And so should there be a different goal or a new goal on where gross margins can go now that a lot of that hard work is behind you?
Speaker #11: Hey , everyone on ERP , it , you know , the looks like the big phases is Can you maybe complete . just talk about what you should be able to now ?
Speaker #11: What do you see as the cadence of, maybe, benefits that flow through, whether that's some things that are driving top line or things that are driving savings? And maybe—I think, Luke, you mentioned some of it will be automation and such.
Speaker #11: And so should there be a different goal or a new goal on where gross can go margins now that a lot of that hard work is behind you ?
Luc Bellet: Hi, Kamal. Yes, thank you. So you're right. As I just mentioned, we'll be finishing the implementation and the end of our large digital transformation investment at the end of Q3. By the way, I think we have about $0.04 of EPS. I think I mentioned about $0.08 of adjustment in Q3. But really, right now, the remainder of the year on the ERP is really going to be about stabilizing, right? You heard us. We've been spending the last quarter or 2 just stabilizing and optimizing service level. We expect incremental cost of doing so to just go away by Q4. And once we're done optimizing, then we can start the optimization phase.
Luc Bellet: Hi, Kamal. Yes, thank you. So you're right. As I just mentioned, we'll be finishing the implementation and the end of our large digital transformation investment at the end of Q3. By the way, I think we have about $0.04 of EPS. I think I mentioned about $0.08 of adjustment in Q3. But really, right now, the remainder of the year on the ERP is really going to be about stabilizing, right? You heard us. We've been spending the last quarter or 2 just stabilizing and optimizing service level. We expect incremental cost of doing so to just go away by Q4. And once we're done optimizing, then we can start the optimization phase.
Speaker #5: I Como yes , thank you . So you're right , like , you know , as I just mentioned . be finishing We'll the implementation .
Speaker #5: And at the of end our large digital transformation investment at the end of Q3 . And by the way , the I think we have about $0.04 of EPs .
Speaker #5: I mentioned think I about $0.08 of adjustment in Q3 . But , you know , really right now , the remainder of the the LP is really going to be about stabilizing , right ?
Speaker #5: You heard us. We've been spending the last quarter or two just stabilizing and optimizing service. We expect the level of incremental cost of doing so to just, you know, go away by the fourth quarter.
Speaker #5: And , you know , done once we're optimizing , then we can start the optimization phase . And really , what happened now that we have a new both data and technology infrastructure , you essentially have to re redesign the process as well as change , you know , the the talent and , you know , and the , the different type of work that is being done around those processes .
Luc Bellet: And really, what happened now that we have a new both data and technology infrastructure, you essentially have to redesign the process as well as change the talent and the different type of work that is being done around those processes. And sometimes that can happen. That redesign can actually just happen fairly in a matter of months, and sometimes it can take a little longer. Now, a lot of the benefits of optimizations will be on the supply chain, whether it's on the manufacturing or the logistics, both in the P&L and on the balance sheet. And of course, we'll also start seeing some benefit of automations in our admin, right? So we'll see some benefit in both gross margin as well as EBIT margin. And on admin, I think we mentioned that in the past.
Luc Bellet: And really, what happened now that we have a new both data and technology infrastructure, you essentially have to redesign the process as well as change the talent and the different type of work that is being done around those processes. And sometimes that can happen. That redesign can actually just happen fairly in a matter of months, and sometimes it can take a little longer. Now, a lot of the benefits of optimizations will be on the supply chain, whether it's on the manufacturing or the logistics, both in the P&L and on the balance sheet. And of course, we'll also start seeing some benefit of automations in our admin, right? So we'll see some benefit in both gross margin as well as EBIT margin. And on admin, I think we mentioned that in the past.
Speaker #5: And , you know , sometimes that can happen that redesign can actually just happen in a fairly matter of months . And sometimes it can take a little longer .
Speaker #5: Now, a lot of the benefits of optimizations will be on the supply chain, whether it's on the manufacturing or the logistics.
Speaker #5: Both in the P&L and on the balance sheet. And, of course, we will also start seeing some benefit of automation in our admin.
Speaker #5: So we'll see some both benefit in margin as well as Ebit margin . And on that mean , I think we mentioned that in the past .
Luc Bellet: Now that we have a global data infrastructure, we're able to actually accelerate our adoption of global business services, which will create further efficiencies on the admin side. Now, we do see all of those as just more inputs and initiatives to feed our pipeline of cost savings over the next few years and then just contributing to our goal of expanding 25 to 50 basis points. Our goal has always been to expand EBIT margin, but of course, we would want to expand gross margin generally in line with that because gross margin is really what creates the fuel for us to reinvest in our businesses.
Luc Bellet: Now that we have a global data infrastructure, we're able to actually accelerate our adoption of global business services, which will create further efficiencies on the admin side. Now, we do see all of those as just more inputs and initiatives to feed our pipeline of cost savings over the next few years and then just contributing to our goal of expanding 25 to 50 basis points. Our goal has always been to expand EBIT margin, but of course, we would want to expand gross margin generally in line with that because gross margin is really what creates the fuel for us to reinvest in our businesses.
Speaker #5: Now that we have a global data-ready infrastructure, we're able to actually accelerate our adoption of global business services, which create further efficiencies on the admin side.
Speaker #5: Now , we do see all of those as you know , just more , you know , inputs and initiatives to feed our pipeline of cost savings over the next few years .
Speaker #5: Then just, you know, and contributing to our goal of expanding 25 to 50 basis points. Our goal has always been to expand EBIT margin.
Speaker #5: But of course, we would want to expand gross generally in line with that, because gross margin is really what creates for us the fuel for our businesses.
Kaumil Gajrawala: Got it. Thank you.
Kaumil Gajrawala: Got it. Thank you.
Speaker #11: Got it. Thank you.
Operator: Our next question will come from Lauren Lieberman with Barclays.
Operator: Our next question will come from Lauren Lieberman with Barclays.
Speaker #3: And our next question will come from Lauren with Lieberman Barclays.
Linda Rendle: Great. Thanks. Hi, everyone. So in the reiterated guidance, you guys mentioned advertising still targeted at 11% of sales for the year. First half came in at 11.5. So I think the implication is second half dollars are going to be down, maybe mid-singles. So just given how much innovation you have coming, I was just curious about the timing of that, if my math basically is right, but also if it is, why it would make sense to have your spending down year over year in the back half. Thanks.
Lauren Lieberman: Great. Thanks. Hi, everyone. So in the reiterated guidance, you guys mentioned advertising still targeted at 11% of sales for the year. First half came in at 11.5. So I think the implication is second half dollars are going to be down, maybe mid-singles. So just given how much innovation you have coming, I was just curious about the timing of that, if my math basically is right, but also if it is, why it would make sense to have your spending down year over year in the back half. Thanks.
Speaker #1: Thanks . Hi Great . , everyone . So in the guidance , you guys mentioned reiterated Still targeted at for the 11% of sales year .
Speaker #1: First half came in at $11.5. So I think the implication is second half dollars are going to be down, maybe like mid-singles.
Speaker #1: So just given how much innovation you have coming , I was just curious about the timing of that . You know , if my math is right , but also if it is why it would make sense to have your spending down year over year in the back half .
Speaker #1: Thanks .
Luc Bellet: Yes, Lauren. So yeah, there's a little bit of rounding, so I'll just make sure not to drive too much conclusion on the back half level. Having said that, keep in mind that advertising investments are generally not something that's planned top down, but was really planned at the SBU level, at the business unit level. And they're really creating integrated demonstration plans, financing the investment across advertising and trade promotions, so with a clear objective of supporting both the innovation and reinforcing priorities. So net, I think there's a little bit of shift. But when we look at the level of investment behind the innovations, we feel that they're adequate and quite strong.
Luc Bellet: Yes, Lauren. So yeah, there's a little bit of rounding, so I'll just make sure not to drive too much conclusion on the back half level. Having said that, keep in mind that advertising investments are generally not something that's planned top down, but was really planned at the SBU level, at the business unit level. And they're really creating integrated demonstration plans, financing the investment across advertising and trade promotions, so with a clear objective of supporting both the innovation and reinforcing priorities. So net, I think there's a little bit of shift. But when we look at the level of investment behind the innovations, we feel that they're adequate and quite strong.
Speaker #5: , Lauren . Yes So yeah , there's a little bit of rounding , so I'll just make sure not to , you drive too .
Speaker #5: You know too much . Conclusion on the back half level . Having that , you said in mind that know , keep advertising investments are generally not something that's planned top down , but planned really DSB level at the minute is .
Speaker #5: And they’re really integrated demand planning, the financing and investment across, and trade advertising with promotions. So, clear objective of supporting both the innovation and reinforcing priorities.
Speaker #5: I think there's a So little bit of , you shift , but when we look at the level of investment behind innovations , we the feel , we feel that they're adequate and strong quite
Linda Rendle: Okay. So does that mean it more is, I guess, in trade promotion to drive trial on some of this innovation?
Lauren Lieberman: Okay. So does that mean it more is, I guess, in trade promotion to drive trial on some of this innovation?
Speaker #5: .
Speaker #1: does that mean that
Speaker #1: more is , Okay . So I guess , in trade promotion to drive trial on some of this innovation ?
Luc Bellet: Yeah, I think it's both. Yeah, that's right.
Luc Bellet: Yeah, I think it's both. Yeah, that's right.
Linda Rendle: Okay. Okay. And then I had one follow-up question on litter. Just in the discussion of the relaunch, what you mentioned in the, I can't recall if it was the release of the prepared remarks, the discussion about there's innovation, there's packaging, but also some mentions on value and competitiveness, which did suggest potentially some price changes. And just in keeping with Kevin's question, just curious on litter specifically, if there's sort of a reset on price pack architecture and pricing with this relaunch. Thanks.
Lauren Lieberman: Okay. Okay. And then I had one follow-up question on litter. Just in the discussion of the relaunch, what you mentioned in the, I can't recall if it was the release of the prepared remarks, the discussion about there's innovation, there's packaging, but also some mentions on value and competitiveness, which did suggest potentially some price changes. And just in keeping with Kevin's question, just curious on litter specifically, if there's sort of a reset on price pack architecture and pricing with this relaunch. Thanks.
Speaker #5: Yeah, I think it's both. Yeah.
Speaker #1: That's right . Okay , okay . And then I had one follow up question on litter . Just in the the discussion of relaunch .
Speaker #1: What you mentioned in the I can't recall is the release of the prepared remarks , the discussion about this innovation . There's packaging , but also some mentions on value and competitiveness , which did suggest potentially some price changes .
Speaker #1: And I just in keeping with question , just curious on litter specifically , if there's sort of a on price pack architecture and pricing with this relaunch .
Linda Rendle: Yes, you read that right, Lauren. We are including Price Pack Architecture work in the relaunch. We looked at our sizing lineup for Litter, and we are making some adjustments to address changes in consumer trends, etc. So you will see that play through. And that will support also the innovation that we have and in making sure that consumers understand the tiering that we have in our Litter business, what value Fresh Step offers versus Scoop Away, etc., and of course, versus competitors. So you will absolutely see a Price Pack Architecture component of the back half Litter plan in addition to the other things listed.
Linda Rendle: Yes, you read that right, Lauren. We are including Price Pack Architecture work in the relaunch. We looked at our sizing lineup for Litter, and we are making some adjustments to address changes in consumer trends, etc. So you will see that play through. And that will support also the innovation that we have and in making sure that consumers understand the tiering that we have in our Litter business, what value Fresh Step offers versus Scoop Away, etc., and of course, versus competitors. So you will absolutely see a Price Pack Architecture component of the back half Litter plan in addition to the other things listed.
Speaker #1: Thanks .
Speaker #12: Yes, you’re right. Read that, Lauren. We are including the price pack architecture relaunch. We looked at our sizing lineup for litter, and we are making some adjustments to address changes in trends, consumer, etc.
Speaker #12: So you will see that play through, and that will support also the innovation that we have. And in making sure that consumers understand the tiering that we have in our litter business, what value Fresh Step offers versus, etc.
Speaker #12: And scoop away, of course, versus competitors. So, you will absolutely see a price-pack architecture component of the back half litter plan, in addition to the other listed.
Linda Rendle: Okay. Great. Thank you so much.
Lauren Lieberman: Okay. Great. Thank you so much.
Linda Rendle: Thanks, Lauren.
Linda Rendle: Thanks, Lauren.
Speaker #1: Okay, great. Thank you so much.
Speaker #12: Thanks , Lauren .
Operator: Our next question comes from Edward Lewis with Rothschild.
Operator: Our next question comes from Edward Lewis with Rothschild.
Speaker #3: And our next question comes from Edward Lewis Rothschild with .
Edward Lewis: Yes. Thanks very much. Hi, Linda. Interesting to hear you talk about the price investments. I just wondered if you could look at the other side of the coin when you consider the innovation plans. Specifically, are you able to pitch these new products at the kind of historic premium we would expect, or does the current environment give you pause when you consider potential pricing levels?
Edward Lewis: Yes. Thanks very much. Hi, Linda. Interesting to hear you talk about the price investments. I just wondered if you could look at the other side of the coin when you consider the innovation plans. Specifically, are you able to pitch these new products at the kind of historic premium we would expect, or does the current environment give you pause when you consider potential pricing levels?
Speaker #13: Yes . Thanks very much . Hi , Linda . Interesting to hear you talk about the price investments . And I just wondered if you could look at the other side of the coin when you consider the innovation plans are you specifically , able to pitch these products at the kind new of historic premium where would expect or does the current environment give you pause when you consider potential pricing levels ?
Linda Rendle: Hi, Ed. We do a lot of work when we are testing innovation to say what the right value mix is. So what are the benefits that we're offering that are incremental to what's offered today in any given category? How differentiated are those? How strong does the brand play there? And then what price makes sense given that benefit brand mix for the consumer? And what we're finding is that it continues to be price premium and that consumers are willing to do that for a superior product and a superior experience. So you're seeing many of our innovations launch with a price premium. And we're seeing many of our price premium categories doing very well. So I'll give you a few examples. If you look at our home care business, we play in the full spectrum. So we understand this really well.
Linda Rendle: Hi, Ed. We do a lot of work when we are testing innovation to say what the right value mix is. So what are the benefits that we're offering that are incremental to what's offered today in any given category? How differentiated are those? How strong does the brand play there? And then what price makes sense given that benefit brand mix for the consumer? And what we're finding is that it continues to be price premium and that consumers are willing to do that for a superior product and a superior experience. So you're seeing many of our innovations launch with a price premium. And we're seeing many of our price premium categories doing very well. So I'll give you a few examples. If you look at our home care business, we play in the full spectrum. So we understand this really well.
Speaker #12: Hi Ed. You know, we do a lot of work when we are testing innovation to say what the right value mix is.
Speaker #12: So, what are the benefits that we're offering that are incremental to what's offered today in any given category? You know, how differentiated are those?
Speaker #12: How strong does the brand play ? There ? And then what price makes sense , given that benefit brand mix consumer and what we're for the finding is that that it continues to be price premium and that consumers are willing to do a superior that for superior experience .
Speaker #12: So you're seeing many of our innovations launch with a price premium, and we're seeing many of our price premium categories doing very well.
Speaker #12: give you a So I'll few examples . you look at If our home care business where play in the full we spectrum , so we understand this well , we really most play in the value oriented segments with things like Clorox , liquid bleach or diluted bleach .
Linda Rendle: We play in the most value-oriented segments with things like Clorox Liquid Bleach or our dilutables business with Pine-Sol, all the way up to much more expensive price per use like a wipe or even a Clorox ToiletWand, which is a significant premium versus other things. Those are growing well. Wipes in our toilet business are tending to lead the category growth. Consumers are willing to pay for that time and ease convenience. That is a good trade-off for them to make. We see the same with Pure Allergen, for example. Allergy sufferers don't have great solutions today, and they're willing to pay that premium versus what they do today in order to get that set of benefits.
Linda Rendle: We play in the most value-oriented segments with things like Clorox Liquid Bleach or our dilutables business with Pine-Sol, all the way up to much more expensive price per use like a wipe or even a Clorox ToiletWand, which is a significant premium versus other things. Those are growing well. Wipes in our toilet business are tending to lead the category growth. Consumers are willing to pay for that time and ease convenience. That is a good trade-off for them to make. We see the same with Pure Allergen, for example. Allergy sufferers don't have great solutions today, and they're willing to pay that premium versus what they do today in order to get that set of benefits.
Speaker #12: Pine-Sol up to much more expensive price per use , like a Business with wipe or even a Clorox toilet wand , which is all the way significant premium versus other things .
Speaker #12: And those are growing well. You know, wipes and our toilet business are tending to lead the category growth. Consumers are willing to pay for time and that ease, convenience.
Speaker #12: That is a good trade off for them to make . And we see the same with pure allergen . For example , allergy sufferers don't have great solutions today and they're willing to pay that premium versus what they do today in order to get that set of benefits .
Linda Rendle: I think, though, correspondingly, Ed, and I think it's to the questions that Kevin, Anna, and others had, we are seeing consumers who really need to get the lowest price per use that they can, but they still want the branded player. So we also need to appeal to them. And we're doing everything we can to make sure we remove anything from our products that's not offering that value, invest those back in the brands, get the price and sizing right. And that matters to those consumers deeply. So I think the answer is, no, we just can't lean on price premium innovation. It's an important component, and we see it working across all income groups. We also must get the value equation right on our core business. We're laser-focused on that and have better tools than we ever have to do it.
Linda Rendle: I think, though, correspondingly, Ed, and I think it's to the questions that Kevin, Anna, and others had, we are seeing consumers who really need to get the lowest price per use that they can, but they still want the branded player. So we also need to appeal to them. And we're doing everything we can to make sure we remove anything from our products that's not offering that value, invest those back in the brands, get the price and sizing right. And that matters to those consumers deeply. So I think the answer is, no, we just can't lean on price premium innovation. It's an important component, and we see it working across all income groups. We also must get the value equation right on our core business. We're laser-focused on that and have better tools than we ever have to do it.
Speaker #12: I think , though correspondingly , editor . And I think it's to the questions that Kevin and Anna and others had , are seeing we consumers who really need to get the lowest price per use that they can , but they still want the branded player .
Speaker #12: So we also need to appeal to them, and everything to make sure we can remove products. That's not anything from our offering that value.
Speaker #12: back in the Invest those brands , get the price and sizing right and that matters to those consumers So deeply . I think the answer is no .
Speaker #12: We just can't lean on price premium innovation . It's it's an important component and we see it working across all income groups . We also must get the value equation right on our core business .
Speaker #12: We're focused on that and laser tools more than we ever have to do it. And I think both of those have a better answer to growing categories and growing share.
Linda Rendle: I think both of those are the answer to growing categories and growing share.
Linda Rendle: I think both of those are the answer to growing categories and growing share.
Edward Lewis: Thank you.
Edward Lewis: Thank you.
Linda Rendle: Thanks, Ed.
Linda Rendle: Thanks, Ed.
Speaker #13: Thank you .
Speaker #12: Ed Thanks , .
Operator: We do have one further question. Yes, our next question will come from Robert Moskow with TD Cowen.
Operator: We do have one further question. Yes, our next question will come from Robert Moskow with TD Cowen.
Speaker #3: And we do have one further question. Yes. Our next question will come from Robert Moskow with TD Cowen.
Robert Moskow: Thanks for the question. I was wondering, Linda, I don't know if anyone asked this on the call about PURELL, but you have a lot of categories that you're trying to juggle all at once, and several of them are having some pretty significant weaknesses. And now you're adding the hand sanitizer category on top of it. What's the risk of getting distracted as you're trying to execute on the core business? To what extent will the PURELL business kind of run itself, so to speak, for a few months before it's fully integrated? Thanks.
Robert Moskow: Thanks for the question. I was wondering, Linda, I don't know if anyone asked this on the call about PURELL, but you have a lot of categories that you're trying to juggle all at once, and several of them are having some pretty significant weaknesses. And now you're adding the hand sanitizer category on top of it. What's the risk of getting distracted as you're trying to execute on the core business? To what extent will the PURELL business kind of run itself, so to speak, for a few months before it's fully integrated? Thanks.
Speaker #2: For the thanks question, I was wondering, Linda, if—I don't know if anyone asked this call on the Purell, but you have a lot of categories that you're trying to juggle all at once.
Speaker #2: And , you know , several of them are having some some pretty significant weaknesses . And now you're adding the hand sanitizer category on top of it .
Speaker #2: What's the risk of of getting distracted as you're trying to execute on , you know , on the core business ? To what extent Purell business kind of kind of run itself , so to speak , for a few months before it's fully integrated ?
Linda Rendle: Hi, Robert. Really, when we sit back and think about PURELL, this is leaning into a place where we've had very strong performance in the company for many years. If you look at our health and wellness segment at International, where a lot of our health and hygiene business resides, our pro business, those businesses have continued to perform year after year. And we feel we're adding just another business with very strong tailwinds from a category perspective and lots of upside in both B2B and retail. And really, that combination will make the current plans that we have that we feel are very strong and performing well even better. So we have strong confidence in our ability to do that. And I would also call out, they have a very strong management team, a very talented team, advanced operations.
Linda Rendle: Hi, Robert. Really, when we sit back and think about PURELL, this is leaning into a place where we've had very strong performance in the company for many years. If you look at our health and wellness segment at International, where a lot of our health and hygiene business resides, our pro business, those businesses have continued to perform year after year. And we feel we're adding just another business with very strong tailwinds from a category perspective and lots of upside in both B2B and retail. And really, that combination will make the current plans that we have that we feel are very strong and performing well even better. So we have strong confidence in our ability to do that. And I would also call out, they have a very strong management team, a very talented team, advanced operations.
Speaker #2: Thanks .
Speaker #12: Hi , Robert . Really , when we step back and think about PRL , this is leaning into a place where we've had very strong performance in the company for many years .
Speaker #12: If you look at our health and wellness segment at international , where a lot of our health and hygiene business resides , our pro-business , those businesses have continued perform year after year , and we feel we're adding another just business with very strong tailwinds from a category perspective and lots of upside in both retail really , that .
Speaker #12: B2B and combination will make the current plans that we have that we feel very are very strong and performing well . Even And better .
Speaker #12: So we have strong confidence in our ability to do that . And I would also call out , you know , they have a very strong management team , a very talented team , advanced operations .
Linda Rendle: And so we feel like that was another way we could have confidence in integration that we would be able to do this seamlessly. And of course, we are integrating in a very disciplined way to make sure that we're focused on the places where we can add value, and not integrating in places where it does not add value. So feel very good about that. That being said, too, we are laser-focused on improving the performance in the categories that are softer right now or where we've had less strong share performance. And we feel like we have made a turning point in our plans. We feel you'll see that reflected in the back half plans through innovation, and improved share results, and that we have our arms around those. And as you know, we've been a company of managing many categories and brands for a number of years.
Linda Rendle: And so we feel like that was another way we could have confidence in integration that we would be able to do this seamlessly. And of course, we are integrating in a very disciplined way to make sure that we're focused on the places where we can add value, and not integrating in places where it does not add value. So feel very good about that. That being said, too, we are laser-focused on improving the performance in the categories that are softer right now or where we've had less strong share performance. And we feel like we have made a turning point in our plans. We feel you'll see that reflected in the back half plans through innovation, and improved share results, and that we have our arms around those. And as you know, we've been a company of managing many categories and brands for a number of years.
Speaker #12: And so we feel like that was another way we could have confidence in integration, that we would be able to do that seamlessly.
Speaker #12: And of course , we are integrating in a very disciplined way to make sure that we're focused on the places where we can add value and , you integrating in know , not places where it does not add value .
Speaker #12: So I feel very good about that . That being said too , we are laser focused on improving the performance in the categories that are softer right now or where we've had less strong share performance , feel like and we we have made a turning point in our plans .
Speaker #12: We feel you'll see that reflected in the back half plans through innovation and improved results, and that we share out around those.
Speaker #12: And as you arms know , we've we've been a company managing many of categories and brands for a number of years . way that our operating And the model is built is built to just do have dedicated that .
Linda Rendle: The way that our operating model is built to do just that. We have dedicated teams that run our businesses. So nobody who's going to be working on the PURELL integration has anything to do with Glad. The Glad team will be laser-focused on continuing to improve performance, as will all the other businesses and their individual business unit teams. So I would just reiterate, I think this is such a strong strategic fit, financial fit for the company, adds to a very strong set of businesses that have been performing for many years. We've had a 4% 10-year CAGR of growth if you look at our health and wellness business. And I have every confidence that we can integrate successfully and continue to double down in a place where we've delivered year after year.
Linda Rendle: The way that our operating model is built to do just that. We have dedicated teams that run our businesses. So nobody who's going to be working on the PURELL integration has anything to do with Glad. The Glad team will be laser-focused on continuing to improve performance, as will all the other businesses and their individual business unit teams. So I would just reiterate, I think this is such a strong strategic fit, financial fit for the company, adds to a very strong set of businesses that have been performing for many years. We've had a 4% 10-year CAGR of growth if you look at our health and wellness business. And I have every confidence that we can integrate successfully and continue to double down in a place where we've delivered year after year.
Speaker #12: We teams our that run businesses , so nobody who's working on the going to be integration has anything to do with clad . Glad the Glad team will be laser focused on continuing to improve performance , as will all the other businesses in their individual business unit teams just .
Speaker #12: So, I would reiterate, I think this is such a strong strategic fit, financial fit for the company, and adds to a very strong set of businesses that have been performing for many years.
Speaker #12: We've had a 4% ten year of growth . If you look at our health and wellness business , and I have every confidence that we can integrate successfully and continue to double down on a place where we've delivered year after year .
Robert Moskow: Okay. Thank you.
Robert Moskow: Okay. Thank you.
Linda Rendle: Thanks, Robert.
Linda Rendle: Thanks, Robert.
Speaker #2: Okay . Thank you .
Speaker #12: Robert Thanks , .
Operator: Our next question will come from Chris Carey with Wells Fargo.
Operator: Our next question will come from Chris Carey with Wells Fargo.
Speaker #3: Our next question will come from Chris Carey with Wells Fargo.
Chris Carey: Hey, everyone. Thank you so much for the question.
Chris Carey: Hey, everyone. Thank you so much for the question.
Speaker #14: Everyone, hey. Thank you so much for the question.
Linda Rendle: Hey, Chris.
Linda Rendle: Hey, Chris.
Chris Carey: Then I wanted to ask more logistically about the components of fiscal 2027. Is it still correct to think about taking the impact from the ERP shift this year and then adding that back effectively in fiscal 2027 and then assuming some underlying growth? So that's number one. And secondly, I asked this in the context of if market shares are perhaps a bit softer than expected for longer. I realize you got some innovation coming in the second half. Comps get easier and these sorts of things. How would you think about using some of this incremental ERP get-back and investing some of that back if these objectives that you have for the back half maybe don't come to fruition? So really just asking about the logistics of the model and how much flexibility you think you may have to lean in if you so desire.
Chris Carey: Then I wanted to ask more logistically about the components of fiscal 2027. Is it still correct to think about taking the impact from the ERP shift this year and then adding that back effectively in fiscal 2027 and then assuming some underlying growth? So that's number one. And secondly, I asked this in the context of if market shares are perhaps a bit softer than expected for longer. I realize you got some innovation coming in the second half. Comps get easier and these sorts of things. How would you think about using some of this incremental ERP get-back and investing some of that back if these objectives that you have for the back half maybe don't come to fruition? So really just asking about the logistics of the model and how much flexibility you think you may have to lean in if you so desire.
Speaker #12: Chris .
Speaker #14: The Hey , I just I wanted to ask more logistically about components of fiscal 27 . Is is it still correct to think about , you know , taking the impact from the ERP shift ?
Speaker #14: This year, and then adding that back effectively? And in '27, and then fiscal, assuming some underlying growth. So that's number one.
Speaker #14: And then secondly , I asked this in the context of if if market shares are perhaps a bit softer than expected for for longer , I realize you got some innovation coming in the second half .
Speaker #14: Comps get easier and these sorts of things , you would you about think know , how using some of this incremental ERP ? Get back and investing some of that back ?
Speaker #14: If these you have objectives that for the back maybe half , don't come to fruition . So I'm really just asking about the logistics of the model and how much flexibility you think you may have to to lean in if you if you so desire .
Luc Bellet: Hey, Chris. Yes, on the ERP, you're absolutely correct, right? As you remember, we essentially shifted some sales that should have been in fiscal year 2026 to fiscal year 2025. And so essentially, the current shipments and sales in fiscal year 2026 are understated relative to the underlying consumption at the retailers, right? And so next year, when you have normalized shipment and sales, you would have a pickup of about 3.5 point on sales and a pickup of about $0.90 in non-GAAP EPS. Now, I would say that's going to happen no matter what. And we're not seeing this as something that we make any investment decisions on the spend level on our brand based on strategy and return on investment. And that is totally independent of the financial impact of the ERP next year.
Luc Bellet: Hey, Chris. Yes, on the ERP, you're absolutely correct, right? As you remember, we essentially shifted some sales that should have been in fiscal year 2026 to fiscal year 2025. And so essentially, the current shipments and sales in fiscal year 2026 are understated relative to the underlying consumption at the retailers, right? And so next year, when you have normalized shipment and sales, you would have a pickup of about 3.5 point on sales and a pickup of about $0.90 in non-GAAP EPS. Now, I would say that's going to happen no matter what. And we're not seeing this as something that we make any investment decisions on the spend level on our brand based on strategy and return on investment. And that is totally independent of the financial impact of the ERP next year.
Speaker #5: Hey , Chris . Yes know , on , you the IP , you absolutely correct . Right . As you remember , we essentially shifted some sales that have should been in fiscal year 26 to fiscal year 25 .
Speaker #5: And so essentially the current shipment and in fiscal year 26 are understated to the relative underlying consumption at the retailers . Right . And so year next , when you have normalized shipment and sales , you would have a pickup of about three and a half point on a pickup sales and about $0.90 in EPs .
Speaker #5: I would that's going to say happen no what . we're this as seeing not And something that will make any investment decisions . On the spend on level our brand based on strategy and return investment .
Speaker #5: And that's , you that is know , totally independent of the financial impact of the ERP texture .
Linda Rendle: Chris, I'll just add to that, maybe just taking a step back. I think it's getting to the point that many people are asking today just on investment levels and how we're feeling, etc., and just how we think about this philosophically. We are certainly in a time, and we've seen this before in different contexts, in recessions, etc., where the consumer is under more strain. That being said, they've been fairly resilient. Our categories, we'd love to see them in the 2% to 2.5% growth range that we're accustomed to. They've been below that, about flat the last two quarters, but we think between 0% and 1%. So actually fairly resilient given what's happening. Certainly very noisy and volatile. So lots of puts and takes across weather and government shutdowns and SNAP benefits.
Linda Rendle: Chris, I'll just add to that, maybe just taking a step back. I think it's getting to the point that many people are asking today just on investment levels and how we're feeling, etc., and just how we think about this philosophically. We are certainly in a time, and we've seen this before in different contexts, in recessions, etc., where the consumer is under more strain. That being said, they've been fairly resilient. Our categories, we'd love to see them in the 2% to 2.5% growth range that we're accustomed to. They've been below that, about flat the last two quarters, but we think between 0% and 1%. So actually fairly resilient given what's happening. Certainly very noisy and volatile. So lots of puts and takes across weather and government shutdowns and SNAP benefits.
Speaker #12: Just to add, Chris, I'll do that. Maybe just taking a step back—and I think it's getting to the point that many people are asking today, just on investment levels and how we're feeling, etc.
Speaker #12: . And just how we think about this philosophically , we are certainly in a time and we've seen this before in different contexts , in recessions , etc.
Speaker #12: the , where consumer is under more strain . That being said , they've been fairly resilient . You know , our categories , we'd love to see them in the 2 to 2.5% growth range that we're accustomed to .
Speaker #12: They've been below that, about flat the last two quarters, but we think between 0 and 1. So, fairly, what's actually given what's happening.
Speaker #12: Certainly very and volatile . lots of noisy puts and takes across weather and government shutdowns and Snap and and benefits looking at that noise , we want to make sure that we're we're not reacting to reacting noise , but we're to what's really going on with the consumer and what's going on in our categories .
Linda Rendle: Looking at that noise, we want to make sure that we're not reacting to noise, but we're reacting to what's really going on with the consumer and what's going on in our categories. We believe the right and the best way to grow categories for long-term value is to give people the very best experiences that we can with our brands, that those are superior to other experiences they can get in the category or for alternative options. We do that by innovating. We do that by ensuring that we have the right fundamentals in place so that we get our claims right, our packaging right, and all of the components that give consumers the way to live their life at home with our products just a little bit better and easier. Save them time. Save them hard work. Make a meal taste better. Bring people around the table.
Linda Rendle: Looking at that noise, we want to make sure that we're not reacting to noise, but we're reacting to what's really going on with the consumer and what's going on in our categories. We believe the right and the best way to grow categories for long-term value is to give people the very best experiences that we can with our brands, that those are superior to other experiences they can get in the category or for alternative options. We do that by innovating. We do that by ensuring that we have the right fundamentals in place so that we get our claims right, our packaging right, and all of the components that give consumers the way to live their life at home with our products just a little bit better and easier. Save them time. Save them hard work. Make a meal taste better. Bring people around the table.
Speaker #12: We believe the right and the best way to grow categories for long-term value is to give people the very best experiences that we can with our brands, that those are superior to other experiences.
Speaker #12: They can get category, or for in the alternative options, we do that by innovating. We do that by ensuring that the right fundamentals are in place so that we get our claims right, our packaging right.
Speaker #12: All of the components that consumers , the way to live their life at home with our products , just a little bit better and easier , save them time , save them hard work , make them meal taste better , bring people around the table .
Linda Rendle: We fundamentally believe that's the right way to grow. We're excited about our back half plans because they're very consistent with that. That being said, I don't know exactly what the consumer environment's going to look like coming up here. We've made a set of assumptions. We've largely been in line for the last 12 to 18 months. But if that were to change or innovation plans were not to come to fruition, we absolutely will make the right investments to grow our brands, grow our categories, protect our shares. We always want to get that balance right back to Bonnie's question on that and profitability.
Linda Rendle: We fundamentally believe that's the right way to grow. We're excited about our back half plans because they're very consistent with that. That being said, I don't know exactly what the consumer environment's going to look like coming up here. We've made a set of assumptions. We've largely been in line for the last 12 to 18 months. But if that were to change or innovation plans were not to come to fruition, we absolutely will make the right investments to grow our brands, grow our categories, protect our shares. We always want to get that balance right back to Bonnie's question on that and profitability.
Speaker #12: Fundamentally, we believe that's the right way to grow, and we're excited about our back half because they're very consistent. With that being said,
Speaker #12: That I don't know exactly what the environment is going to look like coming up here. We've made a set of assumptions. We've largely been in line for the last, I'd say, 12 to 18 months.
Speaker #12: to if that were change or innovation plans were not to be , you know , do not come to fruition , we absolutely will make the right investments to grow our brands , grow our categories , protect our shares .
Speaker #12: We always want to get that back to Bonnie's balance right question on that . And profitability . But we have all the feel we right place to tools in that through the digital investment we've made and the additional capabilities we've built , as well as the pure firepower , given our margin transformation and holistic margin management efforts , that if we need to invest more in our brands , then we absolutely can .
Linda Rendle: But we feel we have all the right tools in place to do that through the digital investment we've made and the additional capabilities we've built, as well as the pure firepower given our margin transformation and Holistic Margin Management efforts, that if we need to invest more in our brands, then we absolutely can. But we feel like we're in the right place right now. We feel like we have a good plan. We're happy to see very early share results in January. We expect it'll be up and down depending on the month and the plan. But we think we'll end this fiscal year in a different trajectory with some momentum. And we're excited about entering fiscal year 2027. As you know, we build our innovation plans for multiple years. So we already know what we have planned for 2027. We're excited about those plans.
Linda Rendle: But we feel we have all the right tools in place to do that through the digital investment we've made and the additional capabilities we've built, as well as the pure firepower given our margin transformation and Holistic Margin Management efforts, that if we need to invest more in our brands, then we absolutely can. But we feel like we're in the right place right now. We feel like we have a good plan. We're happy to see very early share results in January. We expect it'll be up and down depending on the month and the plan. But we think we'll end this fiscal year in a different trajectory with some momentum. And we're excited about entering fiscal year 2027. As you know, we build our innovation plans for multiple years. So we already know what we have planned for 2027. We're excited about those plans.
Speaker #12: But we feel like we're in the right place right now . We feel like we have a good plan . We're happy to see early , very early results in January .
Speaker #12: Expect it will be up and down depending on the month and the plan, I think, but we end this fiscal year in a different place with some momentum, and we're excited about the trajectory entering fiscal year '27.
Speaker #12: As you know, we map out our innovation plans for multiple years. So we already know what we have planned for '27.
Linda Rendle: Retailers are excited about those plans. But I think we have had to be, and everyone in the industry's had to bend. We're going to be nimble. We're going to watch the consumer closely. And then we will adjust if we need to to ensure that we are growing our categories and growing our brands. I appreciate the question.
Linda Rendle: Retailers are excited about those plans. But I think we have had to be, and everyone in the industry's had to bend. We're going to be nimble. We're going to watch the consumer closely. And then we will adjust if we need to to ensure that we are growing our categories and growing our brands. I appreciate the question.
Speaker #12: excited about We're those plans . Retailers are about those excited plans . But I think like we have had to be and in the industry had been , we're going to be nimble .
Speaker #12: We're going to watch the consumer closely, and then we will adjust if we need to, to ensure that we are growing our categories and growing our brands.
Speaker #12: appreciate the I question .
Chris Carey: Okay. Great. Thanks so much. I'll leave it there.
Chris Carey: Okay. Great. Thanks so much. I'll leave it there.
Speaker #14: Okay, great. Thanks so much. I'll leave it there.
Linda Rendle: Thanks, Chris.
Linda Rendle: Thanks, Chris.
Speaker #12: Thanks , .
Operator: This concludes the question-and-answer session. Ms. Rendle, I would now like to turn the program back to you.
Operator: This concludes the question-and-answer session. Ms. Rendle, I would now like to turn the program back to you.
Speaker #3: And this concludes the question and answer session . Miss Rendle , I would now like to turn the program back to you .
Linda Rendle: Thanks, Jen. As we wrap up today's call, I want to emphasize that we are confident in the solid foundation we've built over the last few years to make Clorox a stronger, more resilient company. We're investing behind our brands, delivering innovation that delivers superior consumer value, and strengthening our portfolio in ways that position Clorox for more consistent, profitable growth. We are encouraged by the momentum we see on our fiscal year '26 back half plans. The addition of Purell and the capabilities of the Gojo team further extend that trajectory. Their leadership in innovation, combined with our scale and margin management expertise, positions us to create significant long-term value. Thank you for joining us today, and we look forward to sharing more with you at CAGNY later this month.
Linda Rendle: Thanks, Jen. As we wrap up today's call, I want to emphasize that we are confident in the solid foundation we've built over the last few years to make Clorox a stronger, more resilient company. We're investing behind our brands, delivering innovation that delivers superior consumer value, and strengthening our portfolio in ways that position Clorox for more consistent, profitable growth. We are encouraged by the momentum we see on our fiscal year '26 back half plans. The addition of Purell and the capabilities of the Gojo team further extend that trajectory. Their leadership in innovation, combined with our scale and margin management expertise, positions us to create significant long-term value. Thank you for joining us today, and we look forward to sharing more with you at CAGNY later this month.
Speaker #12: Thanks , Jen . As we wrap up today's call , I want to emphasize that we are confident in the solid foundation we've built over the last few years to make Clorox a stronger , more resilient company .
Speaker #12: We're investing behind our brands, delivering innovation that delivers superior consumer value, and in ways strengthening the portfolio that position Clorox for more consistent, profitable growth.
Speaker #12: They're encouraged by the momentum we see on our fiscal year '26 back half plans. The addition of Purell and the capabilities of the GOJO team further extend that trajectory.
Speaker #12: Their leadership and innovation , combined with our scale and margin management expertise , positions us to create significant long term value . Thank you for joining us today , and we look forward to sharing more with you at Cagny later this month .
Operator: This concludes today's conference call. Thank you for attending.
Operator: This concludes today's conference call. Thank you for attending.
