EPC - Earnings call transcript Q3 2022 | Edgewell Personal Care Company

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Operator

Good day, and welcome to the Edgewell Personal Care Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would like now to turn the conference over to Chris Gough, Vice President, Investor Relations. ahead. go Please

Chris Gough

and be and to for everyone, Call. then recorded will for us and Officer. our joining me Sullivan, and Good Chief our outlook 'XX full Third thank and over Quarter morning Financial President Little, for Q&A. Rod Edgewell's morning call Earnings Executive Dan Fiscal this Officer; being hand this available transition Dan is morning, Rod are you This Chief Year With off will our kick call to via to and year before it the website, discuss results replay we our www.edgewell.com. XXXX

to except by assume revise for spending, statements views statements required and Reform of obligation by related prospects. from our ended costs file statements launches, in restructurings, the XXXX, are and quarterly which shareholders to materially cause Securities is XXXX, statements plans we are XX, to include our update Factors such We on circumstances, SEC. Litigation costs, savings Form changes reflect new earnings, might and under do with annual XX-Q, forward-looking to During capital our Act subject Any amended the law. as return working actual not plans be may future to value, commodity the any expectations events, September the future assumptions for promotional under respect for different sales, Risk These fluctuations, statements. those about to these be various caption report year performance. may metrics, reflect Private or risks XX-K based and product These on described implied provisions current This uncertainties, expressed category or our including future on currency of as plans forward-looking of make to and harbor events the those our reports which to in purposes future or on call, capital the our more. and our statements any Form with of forward-looking or are may risks results safe advertising for

our During not shown this A with accordance the non-GAAP in I'd in earlier valuable accepted investors accounting believes today, press Management to issued These comparable financial provide over the measures like Relations is measures is certain these non-GAAP directly refer the of measures. reconciliation are our release which prepared information turn call, to at our measures with we available of financial to generally the GAAP Rod. the that, Investor business. non-GAAP most non-GAAP measures With trends will of call on section principles. underlying website. to

Rod Little

everyone, thank fifth quarter, X% Thank sales quarter organic you our you, net net for products. Chris. of and Good delivering us. for our organic solid this sales grew driven growth, by We morning, demand joining consecutive consumer

in peak expectations Importantly, and was broad-based demand Care to supply in improved season of markets The strong X% increasing increasing fueled Growth X% growth segments also by volume and growth our was balanced the all America well X.X%. coming from business with growth. North international our a and both and as above we was Feminine from and earlier heightened start quarter from Sun the the benefited business. our strong U.S. the in Care

channels. Our in growth XX%. The brick-and-mortar Sun E-commerce reflecting both in share category results our strategy was brands well in price was the the grew share increased we Consumption strong X%, over in growth strong as as omnichannel and United our remained U.S. aggregate. volumes to gains in and market accelerated. America States continues saw we for North as deliver growth e-commerce as

this critical aisle Sun in now States period, in and category. where of win all United the that basis underpinned the latest of points Consumer-focused is Boat maintained approximately fact, availability the its in nearly brand innovation In ensures great both number reflecting distribution, the point driven has product brand formulation strong XX-week category. and capabilities, required to the Banana Care XXX one the Walmart, in Billie by top to XX strong contributed shelf. on by women's a chain share in continued supply shave execution out line factors growth,

worse While nearly the million previous $XX which than organic impacting $X significantly expectations. basis currency growth in quarter, million headwinds sales negatively this or quarter increased is the by was strong, in quarter, XXX reported points our

EBITDA, expectations. and strength adjusted the headwinds foreign on incremental top and million above per the exchange $X.XX we $XX.X line, our With earnings overcame share delivered both in adjusted of

the volatile, incremental While to improvement of price the the driven and structural strong, by consumer benefited United actions. in and we supply season, all challenging across execution this stronger-than-expected new while products in sun start And key our a distribution, categories peak the of stable a more demand continued reflect environment quarter from remains remains strategy results underlying States business. the and chain our the external we our of believe impact our

supply encouraged other as previous we we Wet were continue particularly category closures international production COVID-related to relatively aggregate of Inflationary key but Fem certain across Shave performance in Asia While through and increased markets, to take will in to and you America, in expected. Latin improved volume Dan this an expectations. levels improved were driven with in see growth parts by travel. pressures largely saw impact Europe, output our increase shortly, in chain also service several unchanged and Care specific across our

remains certain commodity levels Although manageable. and though baskets choppiness in remain labor tight,

improved be now line the fourth quarter. the top of we in and bottom transformation to is the the quarter, bottom a make with four third, shelf; evidenced across challenges, most progress to stronger is specific our in out and and expected cost operating and of the areas: innovation; efforts Despite meaningful first, to of continued the and ability and This is these organization second, on on in committed building, good of capabilities ongoing simplify execution; dollar business However, fundamentals results our our direct-to-consumer dramatic and lot macro progress strengthening deliver and remain of to headwind continue growth. our line to during to an in increasing focus to of market a presence our top model. objective result brand execution Edgewell the we drive digital achieve notably currency finally, our consumer-centric sustained structurally

are years. As discussed brands recent quarter, we our time last in been at have than any healthier they

builds our Sun us a on We in portfolio to by X% outlook XXXX. our brands, the this and recent quarter you are that growth and on we aided fiscal executing We distribution since also our our ambitions details through ask our which Dan the believe from in fiscal net position third the deliver for successive like provide future. Energizer best And the can year, sales puts our underpinned retail, for our deliver to leading be well in X% growth seen our year. great growth acquisitions second of of to outcomes results split now all we've of by on full by take would led organic confidence year for I'd and outlook

Dan Sullivan

increasing and face the everyone. of and strong persistent inflation FX Thank and quarter, headwinds. line top morning, delivered good results the earnings we In in you, cost Rod,

pricing. organic of weather growth, brands As Sun and in responded ordering. into Rod We phasing by as great had Care, strong with some for stronger quarter accelerated where the improved saw U.S. replenishment underpinned performance demand to our discussed, again sales we and saw third many we presence, retail favorable shelf underlying retailers demand category-leading sales incremental and execution earlier-than-expected

back well share with was performance Tampons double-digit organic noteworthy, Shave our gains in shelf, on stronger-than-expected Care, Fem drove in and getting with growth both Wet product demand above organic in growth sales timed quarter. trends. And Our recent the in success

also e-commerce in with execution North global representing growth America Care as and seen catalyst total sales led Fem across strong, core revenue. by our approximately Amazon was XX% Finally, business e-commerce XX% grew improved a gains all digital consumption of categories. now for again over were

made flow accelerate in Labor and availability service Fem and improving and our and Women's to we levels. Care allowing improve chain meaningful levels availability, us Importantly, production Shave. across scheduling progress materially improved, stabilizing commodity and product especially on-shelf supply

also We including aspects of chemicals mitigated sun basket, challenging volatility and across continued costs inflationary navigate signs by of and where easing pulp. the continue the commodity uncertain many initial effectively and to transportation-related environment were

pressures muscles providing developed, offsets well are productivity and material COGS inflation-related both G&A. our in to However,

we anticipate incremental created Additionally, notably in U.S. to and in were and Shave And inflationary we realizing from help further remained our with quarter opportunistic considerably currency the to in dollar the recent the drag the this against line we in and In mitigate P&L, impact benefits the U.S. most the across and also The offsets headwind price quarter, the and productivity hedges pricing, headwinds, execution last focused our execute in savings euro. quarter, strengthened third a approach our price our to the while most of Grooming QX. expectations. a much yen quarter, portfolios.

turn I'll the Now quarter. the results to for detailed

mentioned, basis Fem XXX attributable spend. Wet and X%, As drove Care, net Wet price driven mix by just organic points combined X%, sales Women's higher year, and Most Sun Shave price XX% about sales net volume the of International strong over just about organic net driven Care. X% Fem of organic while strong Sun growth increased were from and growth Grooming of both and and by performance organic Care driven last and headwinds cycling Care, gains the increased X%, in negative increases Shave to organic inclusive increased in realized and North of American over over by Shave. trade growth. sales

international our was Notably, X%, Systems about organic of Women's the by growth net the eighth Growth categories. growth distribution into segments, label. new across price private with business markets XX% last North last sales and growth cycling year, modest despite deeper was across accelerated XX% our label increases. growth quarter and led year. while reflective strong Wet increasing increased quarter, sales consecutive private organic grew for Women's partners, seen in DTC and growth XX% both Looking American all Shave cycling with delivered and intuition XX%

the both accelerated sequential business growth Systems Our America in grew quarter Men's North with international. and in X%

number growing razors remained becoming two category growth increased, brand consumption fifth consecutive in a Men's with the seen the The strong, the Women's XX% and in U.S. For and and set. the across brand nearly still the was at Billing and of the X%. quarter, quarter blades performance category over holding share Walmart disposables. just category widespread Systems and

With the fiscal that 'XX. activity retail continue activated, in-store in we new momentum ahead now of will expansion our display expect fully

driven and increased on season and category quarter, to category, shift basis by basis points, response which early For XXX drove the basis Care XQ points in the decreased net growth outperformed market Sun organic XXX slight share Sun while by year, global the North organic net of sales nearly despite as U.S., Care by XX% primarily our activity continued and nearly Care consumption Grooming our recovery. shave increased Sun sales driven XX% for XX aided the Care brands almost Sun XX%, gains XX% consumption. of delivered growth basis in meaningfully women's Skin In points share. about increased increased branded International and gained a last declined results and in share XX% by share sales Boat, period, Sun performance. X% travel driven increased XX demand Banana the of sales by some strong shave. Care Men's execution over led leisure solid shelf to and America market strong XX-week branded points, in cycling strong

of positioning off-aisle improved share also Our channels, saw strong and both execution and gains. on-shelf share drove gains the grocery points drug at across we XXX sequentially realized Walmart, we where and heightened results basis and prominent

sales X% further Care category last increased COVID-driven actions. Ones XXX brand Sun share our while and of sales basis about category in gains and category. was declined prior of the growth, in weeks from combination as Men's demand growth Walmart, despite consumption XX% flat, has Boat the of cycling of share strong distribution XX new gains fueled a Ones Wet as pricing of the organic share realized portfolio consumption year. Over almost the Wet and healthy over organic position XX% now quarter, number resets XX% Grooming Cremo X% a net the remained one the grown the spikes stands gains. with leading U.S. almost XX in XX% year. And points results to XX% consumption the last category the products, Banana in at increased by points

on consolidate to a believe brand's continue normalized continues category more the environment, trust As with a for equity reflective we well-earned the of catalyst that consumers growth. shelf, and to demand durable will be

of In are we recorded moderating that of demand. COVID-driven peak of our to of certain pretax rightsizing demand quarter, charge the on noncore we million progressions were response a continued a at Stayfree. on Fem inventory near-term in by the about in consumer to and and shelf. However, cost largely offering shelf, added with write-off the increased sold and SKUs product $XX.X availability the goods production eliminating was related driven associated declines and Sport XX%, category net organic Carefree heightened the by brands Strong improved slight Playtex charge. contract sales in growth termination demand offset Care and

saw Our XX% share in and nearly for quarter portfolio growth last XX-week was the consumption the and flat period.

offsets. an mitigated inflationary down basis P&L. prior about pressures price of XXX by points the adjusted were the the basis moving year. XXX on basis compared Now points basis and decreased margin productivity quarter, Gross rate points of partially XXX In to

margin. channel of and unsettled trade decreased our into was A&P Billie were $X.XX incremental original the shift ended sales, $X.XX impact planned activation, were compared investment of on expectations, over sun net A&P mix a compensation earnings of cash pullback prior service of to compared versus year driving XXX Additionally, in to period. than XX to And $X.XX from million investment in Adjusted diluted the outflow international $XXX on just versus feature million compared gains XX% nine recovery display returns was million certain EBITDA higher million year. debt undrawn quarter slightly the markets, basis third of totaled Adjusted year year. the to 'XX. resulted digital and capital the the portion COVID inflationary trade hand, and our in ago. access quarter, greater share activation repurchases expense. with million basis earnings was improve credit and share including adjusted in GAAP per $XX.X currency was and over spend prior bringing quarter, season year months June for $XX.X increased and $XXX.X operating share million levels in to Working efficiency negative retail inefficient. gross current capital pressures more income and $XX quarter the same of operating sales impact ended In about to of $XXX $XXX in our on reflective remains in the our there media from supporting were repurchases activities working spend. the facility dollars last builds leverage, XX% was over million, U.S. compared leverage of in the to SG&A year-over-year last million. segment quarter we the favorable In the year-to-date We to amortization where nearly a execution. year programs geared Adjusted the $XXX.X on compared the ratio $XX.X from headwinds, have reallocated driven XX as return period to $X.XX expenses, execution. our higher fiscal equally the operational the year, expense in Net below and working net the cash translation with of net last and above-the-line million to about reflecting in therefore, million the $XX.X points X.Xx. investment points per offset

quarterly third dividend another payout quarter. dividend our cash continued we addition, $X.XX for of the In and declared

currency to two is believe Now and The largely environment turning the most in operating worsen behind volatile, We Despite to our us. in not discussed. in deliver ability incremental perhaps the the outlook supply previously for still 'XX. our record, in U.S. increased line over expectations headwinds. of despite impacted have successfully business environment, performance while challenging did in pricing XQ and that Shave we we've executed quarter, half that as course across the are the inflationary disruptions on fiscal prior confidence with our the macro incremental Grooming, Wet

So anticipate organic for growth. sales the approximately fiscal continue year, to X% net we

pull digits, increase growth to and by anticipated Billie be mentioned QX QX. earlier, basis and basis net the net are mid-single unexpected still tailwinds XXX by currency. from business Sun Reported impacted points sales As headwinds forward Fem from the XXX will including into points Care

now look line realization be net and increase approximately The $XXX we our of is basis and to year-over-year. GAAP savings expected XX% year-over-year Adjusted decline, points an channel Adjusted profit the of we to from price margin outlook. still million in impact benefit headwinds, to be is be XXX expect operating Adjusted XX are range repurchased of productivity of increase unfavorable gross $XXX the June the EPS our to reflects of shares expected A&P incremental largely anticipate XX. spending net EBITDA to and be earnings. basis negative estimated to now year-over-year As conversion is to contract basis now of of sales category effect points XXX% XXX year. previous is mix. approximately $X.XX to in outlook. FX to in The expected previous free the above We margin, now for million. cash expected over decline $X.XX through the be about flow finally, range now And negative inflationary of and with includes expected points

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

Operator

Raymond with first The James. comes with question Olivia Tong [Operator Instructions]

Olivia Tong

your terms like quarter. on I looks a price. this contributor wanted a little bit good It in more price expectations was detail of

got range. to single-digit that. I there And you pretty the past, of mid- sounds think high it a sort momentum respect you've like decent to in some been with had

and this your talk you're if are some only a So you seeing? headwinds that any but that whether incremental year, not combat the about expectations for just plans to little there could cost of bit

Dan Sullivan

contributing Yes. quarter. Olivia, it's in certainly Dan. Yes, so the price

our gone high growth, two that we last look organic rest our points in -- was had came through at digits. volume. single in of category price X% mid- two is a far If branded single up which about What as the went have sort Most digits. call, women's price executed alluded you the what of and have so grooming essentially up we high of to in well, from price, little over the Shave men's to

I So shelf. priced last on has call, now to alluded think we that been through all that

have price Care, communicated price high and in shelf the probably digits, U.S., in mid-October communicated in high like mid- also that Fem We Care will to we and work through on increases will early Care range. Sun more single-digit again, have Care here in mid- Sun single November. the increases Fem in be to to

kind again, the what that's we two Care, Fem would have. Care, we as about be And So last think XXXX. of incremental Sun

Olivia Tong

about Banana and bit sales. Boat pull recall mentioned in had little Talking that some a forward the you you

that, you little if talk a generally is expectations just just are? impacting, speaking Care So then about could And here. what from bit your Sun what about

Rod Little

Yes.

thoughts Let of Sun me overall. couple around give Care a just

the We XXX share the well all, in think We XX one the future. growing here First sets weeks of have like up with the past multiyears the we're basis player in Banana on points one number year it in of Boat of good the the in strong We category. performance U.S. brand number this category. for Sun Care. now basis

codes. time, always health you safety. cases towards thing as gets overlay time the As the play up you'll in It's than recall and and one some codes. anticipate I do coming leader will conservative because ultimately, category from in where is three all is right a recall take three health nothing X.X% as of the in safety on impact from the do third-party view batch business, by of case, the in volume we in or come you'll this any year have the effectively, And represents older And don't to and from of at zone consumers these upon a SKU. the to In product. It it and category, view product less ahead. the that a look either thing one lot on that it's there's you anything the in This business. manufacturer the take how to quarter we

all in we Products our about health collaborate We Personal don't FDA don't formulations. Council And on the ingredient benzene Care We serious we guidelines. products. and have with so very We're -- put very, safety. follow

think I have it's an we're so impact. headline And thing a doing won't the here business right but unfortunate it always, and

Operator

question with Jason next The English with Goldman Sachs. comes

Jason English

A questions. couple of quick

price most your the build out bit just you're we muted. Men's and had already build last the in should to of Women's expect single-digit you going dampen grooming. seems of and Let's X% that spend It one put high Or it it. context So quick. continue off A&P shift trade realization to magnitude is to in to Is about timing? that of a real this that the into our mid- to portfolio? level talking across to in

Dan Sullivan

Jason, of quarter. it's over Dan. the the the in Yes, look, went price course

timing and than what think play a QX going I slightly piece forward. see you'll different in certainly So realization

most think coming I pricing, We'll fair more Wet a comment. Ones also the the we've next right? of I to level Care. ago. mean, off international a will that Sun of project got, year. not pricing for Fem Wet pricing now, expected, we year. I'm the organic we've in we in be we've that lapped was mentioned, In what Shave as and took year in And sort in across price cycle as I for markets going of in So had realized the that's tailwind

categories responsive lead we in taken we've price. So of the also in 'XX our feel we've thoughtful, the and where areas the next we're pricing again, that we comfortable about price in lead been follow role more on for where in very really a call. really category, But we'll say leader

we've the had in. I good feel about around with pricing environment we So retail we're the the think really that we overall, conversations that have and taken

Rod Little

that. international We do in have pricing Wet two come to thoughts in to Shave. I markets just some Jason, would add some

been the there markets so A&P the some in around make Wet how has Shave comments trade, around And point come that a big there's we've to we'll couple the will And we And well then help. you pricing future do made of as where U.S. the primarily moves the made up out about A&P our spend move think It return activity spending We this trade It's of Sun of shift on share into in around display Sun XXX was of that this the Care. given investment. basis intentional in did gain around very intentionally Care part points year. what's us a year.

out again, As for year. the be that of you'll we see as we the cycle about into balanced future, more But I that next -- think think sets Dan

Dan Sullivan

year, Yes. spent XX% And at spent about if QX. We thing to Jason, XX% only at the sale rate you is A&P this again would in add of about look our spend in at I that we QX.

can going and So a to in money really we're We we're out be at. return also around at where spending we're But thoughtful the actually here we're levels that position of all we disciplined taking not get. brands. like the what

so we But just And saw point money choppy, remains of you into reallocating think the and retail needed. on Sun. Japan, quarter, and China around the in where return Rob's out market just didn't only in the we'd we namely pulled better get international, execution we that not

Jason English

question share see on One Makes sense. good small market Billie. to the momentum. It's

you around expect Can what implies from brand. You come call down sales XXX a XXX that sales basis point. guys the you It overall a give to on us year the to point full XX% contribution growth reduction? caused have from some around color basis contribution lowered

Dan Sullivan

owned only there, any had I to demonstrated our for where the months. in hadn't Yes, January, thing certainly. is few in just mind back the results we integration Walmart. business. think begun time, that we yet a we team brand estimate with that were hadn't kind February the caused to seen obviously We when this in we at of Look, And the try main this going and

So of it's a we're against way saying forecasting a uncertainty. obviously nice of lot

reduction anything bullish wouldn't in less the as through Now as on I it, brands. read worked the impact we've

comments brand Rob's business well. about super the the a XX $XX performing to is at going at end year the heard Walmart, one which contribute start. or You around a top success we're line reaching million DTC excited this of share a still in day, And so to that's

more of chalk again, performance up the So I February with in like uncertainties to where we would impact trying of result brand amount really back and is. because estimate just no a it to the tremendous real

Rod Little

work. And want of points doing structurally in thing. place Jason, no There's as of has The weakness Billie couple I add a they that Billie. just that's to brand they're on come here super the with They're team, Walmart share into and Walmart's maintained in their motivated. We've increasing Edgewell. periods. in share. retained recent We've the team built in is doing great the team happy retained execution. the terms gained had more fact, momentum

body had we away about of And that the the Wet expansion more good of time footprint that. women's that the the happen. a brand. Every fulsome will we from the primarily brand. all I potential broader have acquisition we into category today then envisioned expansion wants feel retail at think around So distribution, business And Shave a also retailer

all cycles away, So it's and not it's potential is near term. there, that

Operator

comes question Bill with next Chappell with Securities. The Trust

Bill Bates

back circling Sun to Just Care.

mid-single the all that quarter? meet obviously, -- probably in better? capacity the you Or of I it, had to question very running took X%, were demand kind And results gains. category could more But would digits. share of the Is you strong full at be down out have you you with guess done weather? think your you if performance and I being to market the down kind is,

Rod Little

We're running full Bill, been. capacity, have we

quarter supply season run big that around staffing what in in-house prepared would plant. for States about manufacturer calls, only talked levels the primarily manufacturing. material our a manufacturing the we being we think in how we're is prior I Again, in be here we anticipated around

by control And demand production also CS X%. weather, XX% the team more when benefited that's competitors. it Part is that there. the cycling some execution in have being of part us quarter so of is our this to season. that's builds and of this that down fast of we So meet availability and inventory is category than great and up in the

as reorders in QX. team. And again, theoretically, benefits see profiled expense the we QX great last a the us earlier by came little specifically so it's competitors the prior in a saw the and this than just phenomenon execution should It's compared all to different also the we it have a There in of which had year was quarter, earlier, at period. the where profile peak season same year,

Bill Bates

I at of is particular, points trade question on kind meaningful mean, looking deep, of Do and as kind from Wet a guess mean, all -- of would consumers you a I of or from that disposable premium then kind then seeing benefit you private have we And down do benefit mid-tier to Shave, the kind are the you I and expect razors, for need a guess, I the price to drop we any -- label. trade in there in down? be categories? these consumer, long to current to recession

Rod Little

we Wet latter, of meaningful any I this trade to Shave point. it's in Bill. In more have seen not the short, think down

private with playing across a As label of XX% nice price all our space. portfolio, really you in point out, portfolio of points that we have the

our up would of years X% right? Wet have quarters, think branded quarter, is could ago, men's a deep in Shave, I recession have a up women's in we been well do consumer that into to we when business At the sets So few if the more had up or XX% as time X%, coming do strong the that. think our as a think up we becomes that. challenged over I don't get all ability actually thought years. in it's we We for done the base portfolio

So the consumer the we think across regardless I all tiers. we're portfolio where positioned. again, of of And like the goes, well

Operator

The Modi RBC next with Capital comes question Nik with Markets.

Nik Modi

Actually, I have two questions.

maybe polarizing us guys, Just economy. there. out some so the can you're just you about context mean, I on points, points thinking data give how many

time business is a of just And you've reconnecting the retailers. it second I starting year? to the you kind is as and you, So rest of relates you're know of to spent Rod, to question assuming what of team years, the Clearly, understand I is and management wanted the to the with last couple reestablishing really, lot perform. then on the

want I of fatter terms to willingness in versus on kind of cetera? the kind Just opportunities, take new products, your would understand the couple different a get a discussions, of years to ago? of love what's today So et just union to now

Rod Little

Yes.

On the been in as we've we state as of control. the economy, control your good I is can -- think. what guess mindset What is the ours,

our flow. a a like We going a whether basket have increase, question. is disciplined the feel so with to have fact even value expect on size personally build some do on do very create everyday I into healthy that. headwinds value. our or trade very use like to against lot products and well we we is will things there in up feel consumer We difficult long-term the some deep economy of and we cost, reducing contraction pricing business that to that up primarily the orientation. if if recession And as do a categories or that south, mid-tier environment, portfolio focused a economy portfolio the in consumer structurally our goes or some generate were And a we or we cash goes be shows Bill's are and categories talking down match will be

do logical, that be would Europe that. to happen. It's in think both I I here think see expect we the would some and we that markets of

to think category, a the filled to retailers about think as ago think where view as very So economy. a couple and I was category a that it From people retailers. view transactional years that with partner retailer help predict the we transactional is the today, them with We perspective, retailers as would a in very role us be were way where we were where comments I around us opposed simple can a going, is and of and the conversation shape up all for to future, the that the simple people whole. that for time ourselves, participate arrange growth their on websites, takes at on a that retailers. only the own do. to retailers. better We and it The them got a around that credibility taxonomy better team e-retail. bring We've earn on capabilities We've help as thing to what retail category in trust. but data we category the calls got retailers create value the not the shows shelf for And and

good sure. about have or bring margin the margin, at that. are point We've We bear. that that to price gotten right, nothing really a We people That's transactional discussion.

and future. the And so now brands Banana you of and when buy hurt lead consumers like Boat the you sight put doesn't line you is more Cremo, to And want Billie, have also happening more in all that that have better leader discussions of it like together, like what ends like that up participation being category. have to long better you the in

portfolio too, helps. our and So is that better,

Operator

The with comes next with question Jefferies. Kevin Grundy

Kevin Grundy

covered I lot relatively the Is the of guidance. the this just on on leading the this I deceleration slowdown is your Dan, at the plasticity, strictly covered the timing strength? sound upcoming we've we've in fourth in clean a all type quarter? to growth this, low positive categories So think sales quarter, point, digits organic quarter up to in shipment implied related brand the that in guess,

Dan Sullivan

yes. is answer Short

somewhat As we and both we We two, when constructed we about Tampons, is we going organic, saw Rod of replenishment the But the than issues. media just half which orders. bit accelerated that Care it QX. accelerate to of predict be of profiled also, QX out QX, saw thought a always pointed in Care around in around in availability largely would Fem Sun get X% demand difficult a stock we right, bit timing better shipments, thought about are then out to a

the answer. short into that moved So That's QX.

consumption-wise, we the QX, a is cycling XX% in growth almost Care a thing that quarter. season keep I year the Sun we're in really have other to mind strong last consumption had think

was our July. be. we're Sun said as those Fem is in growth at Care that that if forecast. and two categories, thought we quite we month Having that, And our the consumption quarter, sales built what largely it our in look into So also in one would you profile the sense mind strong encouraged both had

four to for encouraging phasing about out I it. think of So easiest But three is think us. the into way again,

Kevin Grundy

Rod, a you. one for quick

you Just guys struggled is considered Care the historically has exiting. Sun which business, which on business,

or there The strategic sense you've -- made. no guess, are to interest results didn't updated share market changes on comment And it little think little better. a makes the bit I keep it. it work views just was I pass. bit Maybe then better. looks But out, a that I'll there, some

Rod Little

Yes.

business. Just to have We business. Kevin, transacted. the had one the sold in the could interest the correction have we question, could in We assumption

looked by ability at part process One assessment, the a a the it of our process, It strategic alternatives differently, assessment. business. the the was fine transacting it wasn't and it value, deeply we determined run a in would to It things price, could of with and value keeping to right at create as the sell we people that wasn't we frankly, call look better and business And the we have for run and externally. create more at business. understood the been

thinking a business mid- you we learning just I to the getting to on by individual that rest exercise move unit structure that We've business. -- here. business structure is a it know, But that it grow of separated to a future -- the team as we get thought -- a to first -- the it right. want and position the business great to we team to high our declining as about the now We team by give has can focus. better that let from across business we balance of at the in sure -- actually was sustainably business off that over focus. think single-digit in the from how Part priority So you It's physician. go clear team got applied to to that It's a about balance the make and business and what history time that's internally, that's took we the that unit business. of think level, the of

in segment. is Playtex marketing and Tampon the It's portfolio amazing the is give had the meaning right. has done in in attention. to the and the to this So to historically. right, team focus the the the Tampons in in the growth segment consistent Sport without brand brand in And the team job that's two three number brands is Tampon fastest-growing an number focus sustained led consumers' the and purpose. brand connectivity share player structure versus It's rearchitecting first the been the

we for us. and so of great positively category got about And And team building, very with that's we've the marketing again, now a the flywheel think, think focused. brand going strong that I future

Operator

question and Wells The final Chris Carey comes Fargo Securities. next with with

Chris Carey

comment around So the follow-up, just one Dan, quick on July.

organic tracking overall do context the sales guidance you where and comfortable outlook. implied think ahead in a that's forward quarter, you implied the the pull but with you're comps you're I your on of more of for total quarter it's think just setting basis, tough the

just to on just I QX confirm have Then your and specific basis July reverse comment sales business and regarding the just organic So you as some forward? expect you pull an I Skin to Care wanted of that decline in related, a do Sun follow-up. quick

Dan Sullivan

forward QX. the above consumption from our Sure, the pull QX those Internally, QX then line did sales in into Yes. Care on X%, in with twofold. Fem comment our solid up I line categories I X%, commenting was organic on own And Care consumption with expectation, we July at up was results. see two Chris. with. was getting -- result, not consumption sales where X.X% QX, Sun solid What

with was of So strength just pegged. had organics more and it around line context what in we consumption

Fem based year. In would cycling terms Sun growth XX% Care to organics QX organic would be your implied growth QX, still Care organics in mixed. expect positive say largely We again, in to last we second on actually growth of expect question on be negative, it's in I QX. would

Chris Carey

had alluded to comments on productivity. some you then and And pricing

fiscal is could if your a as gross inflation 'XX the more. you end haven't I'm here the do eases. dimensionalize head in run of at could get underlying changed. then rates given And into as of we're the just I sneak I maybe And one call, expecting sense contribution potentially and that to your you from you're think what margins really, trying impact for the of you expectations said productivity. wonder if I had pricing

Just there as there in Amazon that potential press some Is just risks is can label well? your some there exposure way be frame and quarter any or you shuttering the to you was private reports going commentary see do any categories.

Dan Sullivan

Yes. Sure.

So on glad margin you the I'm point. the profile, picked up

think and points structural elements basis about which when the the that's savings and say XXX based XXX largely on we of points of Inflationary productivity lining in as realization realization, it points gross is inflationary would the I are trying margin, of what we up you're were price around headwinds and price is plus to spoke just went when made basis headwinds, back in. or the to thought minus the and we May. productivity all we price timing scaling comments the savings over points, basis then basis in that's XXX getting then XXX

I later, a a though, quarter point, we challenging environment, in think that's is and one margin. volatile good that really structural feel really important about really

it's relevant you basis alone, out, we it, the contemplated that that added FX, news that didn't probably of previously. do fourth new see as quarter think about In XX headwind the margin points does on call we business. mention I hadn't I that want and put I to an the think but headwind is

team comments their yes, the as I seen good is Amazon hopefully, teams Amazon. are profile. discussions that counterparts helps with had -- the at the we've and All you obviously. the can On look, Amazon, you margin our tell seen really from the with articles, have So We've well. response

brand look set the both you is If number at the and XX economics category five The growing for the weeks the and interesting in category has Soma really digits. them. us itself, is last double over

they see given don't or that category portfolio on trim just look the numbers. destock a would we those this as to So

Operator

like and would appears this our over questions, no to concludes It further Instructions] any closing I the to session. we've Rod got back for turn question-and-answer conference Little [Operator remarks.

Rod Little

the this close we're we in had performance quarter. you. the Thank with just out, happy guess Yes. I to

put lot where we in I at think that we're improvement things us. that the are making time seeing know there's a And the around been choppy team has business structural a hard of the that work into happen.

sight line have increasingly So what confident we I we're future in and think to. of the

we'll So consistent, reliable thank you and for that. We'll work to deliver to three talk in months. results continue

Operator

today's you Thank for our concludes conference attending This for today. presentation.

disconnect. now one. a may Have You good

Edgewell Personal Care (EPC) 6 Aug 222022 Q3 Earnings call transcript