EPC - Earnings call 4 2023 | Edgewell Personal Care Company

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Operator

Hello, and welcome to the Edgewell Personal Care Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions]I would like now to turn the conference over to Chris Gough, Vice President of Investor Relations. Please go ahead.

Chris Gough

Good morning, everyone, and thank you for joining us this morning for Edgewell's Fourth Quarter and Fiscal Year 2023 Earnings Call. With me this morning are Rod Little, our President and Chief Executive Officer; and Dan Sullivan, our Chief Financial Officer. Q&A. the our hand fiscal results before transition off Dan over XXXX kick we discuss to and to will call it then to outlook Rod full year be This available www.edgewell.com. call recorded is and for via our being replay website, will

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

with measures GAAP directly During issued not in are non-GAAP certain as measures release in this most principles. of shown relations A reconciliation non-GAAP to, of substitute as These performance which the non-GAAP our as as financial for supplement non-GAAP accordance press not available investor comparable generally the to with at call, to, information measures earlier accepted refer prepared financial prepared a measures. the our we section is accounting measures to a of GAAP. or website. today, accordance superior provided in financial will This is

information over With like However, our management these on provide of believes I'd investors valuable to underlying that, Rod. non-GAAP call the turn business. measures trends with the to

Rod Little

consecutive everyone, quarter our the accelerated stronger a execution. across business. activation meaningful algorithm. In transformation commercial long-term us in cash mid-single-digit thanks of our morning, challenges, year cost Chris. the outpacing year-end evidence realize growth, macroeconomic generated organic the our third portfolio markedly of further improved flow. in delivered We healthy retail brands, of of price joining disciplined presence and Good of XXXX, for on rising net again face efforts, XXXX and business progress better gains sales we savings fourth was our evidenced once remain earnings our and XXXX Thanks, and and call. fiscal provides by

and of with operate us in all another to focus and bottom-line which of year urgency, 'XX. positions both for continue fiscal top We growth

share business and in and U.S. disposables our share women's growth men's solid with quarter, the quarter. played delivered the we with the Aggregate Market our held meaningful million the organic on X%, earnings currency largely costs international. focused categories again fiscal business fiscal Care. In in gains held consistent and segment our across business, ahead per flow, we macro in XXXX, and and strategy environment, our expected. was Amidst growth exit net in segments line sales e-commerce out EBITDA healthy. adjusted fourth and and in of grew the debt both challenging supporting we building, in investment in in broad-based our has share The line underpin strides of allocation systems while as expectations increased initiation U.S., across We the controllables, X.X% our fueled a highlighted by we we as For generated retail earnings a our was activation. America have all growth stronger performance the adjusted organic 'XX, of made investing November adjusted by which and portfolio remained Sun the growth, product the of brands discipline, share across North and as adjusted all share the quarter in further systems, constant across are and portfolio delivered EBITDA growth controlling execution capital top cash resilient, and $XXX of we growth business the consumption per strategy our driving consumer as continued free enabling year, out of repayment. businesses and we our brand of respectively. XX% innovation, The of outlook. the by Since underpinned

execution. reshaped areas and have capabilities fundamentally leadership critical our organization. team We in like digital, We building and brand our strengthened retail

time markets, net approach and more teams. price. on of a same improved we in capabilities been combination driven both better stronger, And growth go-to-market of has horizon, and focus acquisition disruptive Overall, capabilities execution. by Ville has with simplified Over are recently, capable the our with the volume unit of the consumer-centric with building the Cremo and of growth is a to fiscal better healthy team that the new more equipped revised, and benefits from we drive from international exit sales that phase next innovation organic transformation. realizing XXXX X-year Our brand our development product

Importantly, been of profile from our towards the categories. growth has we benefit shift composition the with long-term growth as consistent our portfolio higher

though right X-year compared by good of Skin made progress organic have sales Shave and strategy our X/X drive is CAGR continue and business And sustained of the strategy the complete, with with we to sales are approaching Care, believe we've we include firmly and since portfolio, creation. fem total company is basis Sun XX% growth lasting and now Grooming our subset those in increased businesses XXXX care trajectory our when sales not of in over also vision a to And delivering a organic and win net can working. and X-year to we to confidence Care, and our declining net growth growth a our X that taking progress right just sales results of right made These long-term that goals Our on on plan CAGR. historically demonstrate we transformation ago. launched have value digits years on we've X% the businesses, which double outlining

in focus globe us more. chain transformation a moving across generation a and in continued cost Before our face of including focus to X for are consumers their and our has incredibly position on for This an put delighting deliver period our has thank past once headwinds supply and outlook we their resilience currency team's as inflation, levels to significant this, today. difficult the been improved disruption, our the we years. Despite for I'd the and challenges, strategy global a in executing macroeconomic pandemic, teams dedication our XXXX, like on to over

to insight provide our you turn the new Now I'd Dan and will and plans into detailed the through then to fiscal assumptions. some like take year

for and sales organic fiscal calls top X outlook growth. reflecting 'XX further drivers: Our for core growth, bottom-line first, continued

and plus range second, net for initiatives is further offset expected volumes and of expected growth is gross accretion, continued organic of markets the international to more management, of inflation which currency by margin outlook sales revenue higher and X% North by driven in headwinds. with price America a and our revenue management; productivity again growth both cost and goods price further Our and plus and driven X% to mix across than

master business. Third, cadence a we from improved supporting operational benefit to with the anticipate outlook critical expansion We margin, SG&A move operating investment capital spending across Billie categories and innovation organization. of improved brand efficiency calls by plan improved flow plan both promotion initiatives, disciplined prioritized Care of substantial gross including our approach which driven a re-platforming continued body we rate incremental dollars in as and of disciplined sale, our cash strategy. free capabilities Fem deleveraging This growing the adjacent for organization investments and in in compelling to Sun a advertising earnings margin generation in our brands we prioritize will and brand of across the brands leverage allocation the And sale. and and lastly, to growth, as increase strong to expected increase as Care and a rate and into

in ask now And and fiscal quarter through I'd value to outlook believe, outlook, our this fourth Dan? on some you shareholders. portfolio deliver can creating, which on we for go-to-market and year we we operate, across proposition 'XX. additional provide and results brands our for detail also confident full to markets like take our compelling of very position are our Dan We given improved the a

Daniel Sullivan

morning, Rod. everyone. you, Thank Good

And the across fundamental are quarter the give As and confidence full are financial made choices that to you expected made our the always in and we've do, year. for just the heard, the results we're improvements both while outcomes. business desired and operational performance pleased with delivering there's the driving the more us we've strategic

COGS the constant productivity driving responded significant for sales healthy the actions model currency all expense underpinned mid-single-digit by in macro pressuring incremental challenging, XXXX, this and operational financial and in year, agility. requiring performance which business the million Xx growth $XXX of free our generation, environment EPS reasonably further We're headwinds higher price a of proud flow In in realizing from cash growth a both increase was broader organic demand macro movements environment. portfolio, consumer savings, approximately XX%. difficult we interest and very results urgency across and of While was and pretax currency inflation, absorbed executing

X.X% turn me X both to were with the sales markets. the percentage expected, results consistent and fiscal as Now QX in quarter results net Organic and declines referenced. for in transitory reflecting fairly international The America items specific we decreased let detailed year. previously North the

X.X-point the cycling inventory year disruption. total U.S. in of organic last had weather lastly, an sales spike peak fem the levels inventory the wholesale in And second, our effect period at Suns. of the the across retailer after in business in buydown a company First, planned QX impact Wet which in of Japan, approximate care normalized on demand as supply Shave quarter; negative in the alone

of led up gains market the that We points, net completed continues mid-single-digit largely continue the increased basis quarter, meaningful has due mentioned. quarter, were volumes, as decline share more though heightened offset above Women's was organic in to just our were from in it trend. gains benefit the to sales than continued the despite higher pricing Wet environment to in The items XX by strong see a portfolio, our reached and Japan expands Shave America Billy with a in largely and basis In share declined the our flat, while razors in XXX a in in North share result consumption share fourth brand share and Systems was X.X% by international quarter. category. down the of U.S. performance. category, gain which in aggregate volume X.X%, And blades XX essentially was points inventory now the shelf, the retail about on X%, approximately the of with buydown competitive

declines quarter. in the strong gains quarter, grooming, our and Wet about Ones as We organic of in Care price In growth and consumption Sun businesses rebounding In approximately lower expected largely modest conditions in sluggish and year, America growth in Sun and volume in at was increased trends. by were North despite retail a growth which gains weather the saw the Skin X.X% sales share XX%. Sun season, also Care last international improvement category growth earlier particularly U.S., XX%, as declines orders, cycling we the as America. up was men's poor results Sun in Walmart. offset nearly strong result by sales Care in and the the a Care over both Care in from marked XX% Latin driven systems continue increased Sun to International to double-digit U.S., last net were see XX%, led of replenishment disposable partly

Bodo category The Boat in #X North net and increased retained we terms mid-single-digit a demand as price sales Importantly, portfolio-maintained Wet for quarter better Banana shelf. in One's and crema on grew lower share to year's was continues spikes X% growth market the by quarter its and And sales net resulting led our by growth XX%, offset of position Fem demand Roaming were over about on gains position. out Sun XX%. Care shelf. Care net organic internationally. share America the and organic levels share exited and our the in down sales were stocks in cycle approximately X.X% volumes. of the supply year last inventory through and in organic

the consumption share under For just X%, category year, up and in flat. market of was was the the essentially our

and million period, $X.XX basis and in impact market to basis inflationary net $X.XX unfavorable an prior flow Cash of XXX-basis XXX estimated were currency. were from compared of the diluted the $XX.X by point full quarter share Now realized with million strong the with fiscal access adjusted to to the million than undrawn basis currency to points partially quarter of compensation year Adjusted in at XXX the compared of million more in million earnings basis cash points from in last $XXX to of ratio points quarter, easing portion In share $X.XX debt $XXX doubled compared on million 'XX, from EBITDA $XX.X income inflation. points share compared GAAP the basis on price the totaled net adjusted prior We our broadly repurchases net September was moving to XX, prior an year for currency. quarter quarter, and down fourth in and $XXX or prior COGS people-related including year P&L. savings points last earnings million in year, million the $X leverage impact XXX activities and year. margin hand, point Approximately the cash facility impact XXX of helped operating productivity versus pressures XXX Adjusted sale of $XX.X In gains offset and programs. the negative year. only mix XXX X.X% impact Gross and unfavorable Adjusted sales savings was incentive the credit per the $X.XX in million. net the per costs SG&A persistent end inclusive earnings category a execution operational X.Xx. to million of were and movements from price year. operating estimated from efficiency expenses an offset $XXX ongoing fully offset ended a compared $XX.X items. increased yet and were line basis unfavorable $XX generation of as to higher currency. headwind was rate constant ended other $X.XX from in increased A&P from basis

We for full per declared cash total, we quarter million million to In the fourth another quarterly and for of continued $XXX payout dividend dividend $XX share during shareholders nearly quarter. and the year. $X.XX our the returned

Now net to X.X%. the let Organic briefly me full year year increased turn our results. sales for

America international win almost Sun by and portfolio to both just in fueled North Grooming by brands the grew driven over Our for right while grew year. markets, X% XX% Care, XX%, growth our

delivered year growth, X% sales at of organic America sales consecutive by growing X%, both its grew international markets increased and by net From third perspective, X%. gains. while about a right-to-play pricing, portfolio driven geographic over in increased organic realizing Our volume price North

declined share Importantly, aggregate In key stable our and Care decline year's remained as 'XX. shelf again last product expected points, primarily products the U.S., to market global the basis Sun fiscal about market value was markets of solid in recalls. following competitive reflective across in-market return share in performance XX

increased share on a basis year. the XX market for basis aggregate points Our volume

as In progressed. markets, healthy in international share the markets performance key shave across full mentioned, the also disposables. U.S. market gains and were such in share Germany, as women's strong in held stable, with we saw men's, quarter. share portfolio in the our Importantly, fourth year where results of And as aggregate improved share performance the we

as meaningful points offset On Mexico margin and of basis portfolio in year-on-year, of of in XX basis margin million basis a constant $XX part for expanded orders basis also behind in were rate points was year-on-year. sale points currency over below of a XXX points points costs and XXX late Sun Canada XX.X% basis inflation, due margin in performed sale related On decreased a or a basis XX.X%, gains basis $XX and and brands. year led Sun continue growth to lower expense for prior Australia. basis, XXX the gross and Care Germany adjusted OP rate XX rate Our X% were currency. up increased U.S. gross we and of from currency profit the than as outside of and share XX Adjusted well the positive A&P spend pricing XXX activation to million by the just invest more basis of higher replenishment reduction points season. of XX savings in COGS margin mix. A&P operating impact points year-over-year. by points levels year, in productivity operating unfavorable to Care XXX points inclusive basis increased constant of negative basis, consumption Adjusted was currency unfavorable our

to for XXXX. turning Now our outlook fiscal

growth, deliver As our increasingly accretion in of our and year we're transformation, we profit enter growth. top further ability gross X to continued sustainable margin line confident

aspects control. to strong environment, we XXXX, easing, dollar. will a remain While inflation that given directly form our in it in this as currency increasingly business are and In will of somewhat the and headwind fundamentals the on the the is will challenging focus expected continue uncertain manage

expected about currency will of points segment. to up to growth anticipate be XX both half in of in similar X come vary of basis net the rates to We half the growth geography headwinds. to X. X%, X% is with net reported For organic sales fiscal year, range although X% anticipate be and we to X% and Growth from this price by inclusive volume, and sales

margin, we at or basis points adjusted year-over-year constant anticipate we to accretion look currency. of about XXX basis points rate As gross XX

the However, in of build of a we release inventory as expect points in the to unit unfavorable period XXX the trapped to after levels reduce out absorption well impacts timing basis currently inventory cost pandemic. gross decision year prior structurally of prolonged result of margin in our inventory first the compared XXXX coming quarter to the as result decline of of due a approximately as the inflation to

points our of Adjusted an of be be expected expected of We of to growth in million basis of the currency EPS of rate an both margin $X.XX constant rate quarter. A&P to basis in assumed the tax currency. of to investing absorption, basis operating $X.XX, currency expected inflation, is On EBITDA range midpoint than margin impact share The the expect of and reflects XXX basis of $XX about and more million, expected X% We inclusive is is XX%. and X%. inclusive in committed be points repurchases from the with approximately rate approximately basis our remain expected outlook range operating range to increase to unfavorable EPS growth XXX though significant constant estimated expect of points range support brands approximately we offset of COGS over profit gains XX negative approximately to first XX unfavorable is productivity headwinds, currency XX to the adjusted of impact the Adjusted increase price points points FX, A&P in million contraction million approximately XXX XX%. Adjusted to EBITDA at XX XX of of the or points, mix basis and currency. the basis, dollars in to $XX approximately midpoint in unfavorable through of outlook of headwinds. of an XX% of points inclusive increase $X.XX a share to $XXX sale at basis $XXX basis approximately per to the effective points

adjusted with expect growth we our And year sales is in meaningfully EPS year generate about will net full flow organic phasing, we year. of be of largely below fiscal half to approximately terms million. EPS to X prior consistent half with X QX $XXX expected of the finally, year and in cash In half adjusted that free for XX% X be the

operator press For return I more And session. to release. for information fiscal related Q&A to XXXX to the to now refer you the would the outlook, like I'd our call the

Operator

from Instructions] UBS. of comes Peter first Our question Grom [Operator

Peter Grom

on biggest for I'm itself So to or out consumer range 'XX. looking guys today, X% just year? flex organic we stand the something curious, point you to else? the outcomes next what Is the X% it as as or see

Daniel Sullivan

have in next talking we're We the visibility with full example, plans top that was cycle think don't itself. one that yesterday our for to retailer I right outcome about now. yet I year.

outcomes So I to driver, going [indiscernible] believe. not a be don't

kind we of total where it That's cases I there. past into puts think quarter X, baked in we've some is some categories probably the we'll have in the consumer, takes, little and our XX-week have rate. this in distribution in healthy better The a year, trend had line view with plan.

resilient been So and has point. healthy to consumer this the

at are which possible, categories maybe and not for end guide consumer but depending as imagine, We've continue. on of is it that we're that to probable range, the not guide towards healthy. might you X, economic that even the -- planning if the you see. gets us that -- lower we're But take range, midpoint might expecting planned hit outlook within the Our

at is healthier moment, U.S. still that's growth So believe we're potentially relatively I biggest believe, U.S. that seeing recovery as our us, into And categories consumer comment consumers the probably the I in the the international markets. this projection. think I some some in a more thing for the health our puts of of variability outside

Chris Gough

midpoint just answer at points organic said about other the expect of remarks, we question the way, would the I maybe the in thing we add And growth. Brian, the only to X

way that volume. kind X/X it the of about think of You modeled is that can through through price we've X/X and

sight is line of really price and new, have and execution. a feel would about I of that piece, half that Within to that good which of about is good the about carryover say really price we half

of you of if contemplated modeled So kind and and a degree organic around our side. in we've what it has of volume, through about the confidence think high lens price on price

Peter Grom

And more on you one mind. quick then don't one if A&P,

year, came were you for A&P 'XX. I it come think year. lower. for Obviously, mentioned last some expecting costs know with guys to the in we're the I lower you expecting Care in replenishment this now at XX.X% in here time orders. lower around 'XX activation Sun But XX% for

kind way I'm of of curious So guys just you changed in what's level the here? are thinking about A&P that

Daniel Sullivan

think Look, as lot should. topic I in attention principle, know a a of as it gets A&P I

pretty remain Our going approach we're going We're behind. in be what place to stance is consistent, Brian. and disciplined we bets to And to where we allocate return-driven. very of continue our

said brand, differently and degree quarter, high we opportunity weigh returns, that's way, we're obviously of we going execution like like we And going geography. a of by can where get another where to by feel really do there's segment, good by that, sort and feel So right? by to

seeing I forward, think of things a look couple we As you're happening.

around are We getting are so exciting our re-platform thinking, less on is you we nonworking initiatives into what better and at And to support, got which body we're its deploy more the next category, are within to level, business working good it what pretty XXXX, around digital clarity will, placing. a we behind dollars, retail pilot. we've play innovation portfolio efficiency the better retail getting carefree, We're structural a care in fem significant spend, on dollars much us in day-to-day where sight big far to the productive the that for a investing of and more around activation our work and bets making will Sun getting Billie returns if behind of X predominantly dollar in generate. spend, and what activation, bifurcate spend, able line are much brand

do support business of that feel big we activation. ample and behind adequate behind portfolio healthier bets and commercial the now like So there's we a are spend core the

Operator

from Canaccord. comes question from Anderson Our next Susan

Susan Anderson

excess quick in mainly a a through is question of categories still on the I in had I year? in for versus gross margin then have guess margin through productivity what flowing clear savings base I is that's also, inventory? the do how quarter. inventory gross product that this guess, the first the And for you to decline higher-cost currently? And much

Daniel Sullivan

savings. basis So year, Yes, savings, quarter-over-quarter. them productivity XXX contemplating reverse consistent estimated points are it meaningful year we at in We've for about the I'll fairly take another of order. the on

answer the So is yes. there

the On ladder I'm then a I because and margin important profile, to up and of to it's just think I'll all QX. elements, going capture speak minute to the for

a We good are structural absolutely to of are really line yet continue which other and sight have and inflationary see the net-net concerns easing, deflationary. we to of pressures elements In not margin. words, but

pricing headwinds and XXXX points the then and further We've estimate productivity, about still we Pricing, the mentioned, in around there are versus about although moderate levels. I XXX. of So And then XXX FX tailwinds that sized productivity. XXXX. offsets at basis XXX basis points. headwinds as will continue,

really So that. to line good of sight

year back and close elements. at XXXX what if think a look those on I the mark to ago, you of we're said pretty all we

If margin step them, about need structural the QX, confident your the we Chemicals, I'll higher that Ryzen and is was feel in to most didn't for different headwinds needs what Sun that of margin great what higher that you've inventory you a a ship be think back. you margin call, accretion where to about level come that, quarter is got is on One inflation digits are of therefore, think question year you've to we mentioned, have right? out. So double which hence, in the and carry realistic. that disproportionately inventory you To with which that up still X would example happening got trapped last inflation excessive then would expected fourth there through ship, we Care that Sun disproportionately year, the tied pull improvement costs Sun still are QX, affecting with

takes. and be out item, called absorption. we've And give around puts though, and second just The this transparent the to is everyone

about We around to really year are point our absorption, a estimating inventory and related reduce decision full to headwind that's structurally XX levels. basis

over happen just XX in we out, that days that's of to but take largely we Shave where will We manufacture the expect and inventory Sun felt quarter. and disproportionately first

So the back you've got margin. step in

and the the in got hit got structural an effect to of high items with take the You've in days decision first trapped quarter. absorption the trailing inventory you've out inflation

Susan Anderson

quick at And guess, then really just I on sun category. the retail,

I think being a it little retail. better at maybe up ended bit

much like too end it also there? maybe is I started? at guys then that to inventory, the little I you still now on side, a also much better kind fem do it a right, some retailers clear there chain of and supply inventory feel than retail. because to you was So that did some the And Or quarter in you like out. too if kind issues. care just the position understood the when know restock Was Did sounds a obviously much there of category bit level just there need through

Daniel Sullivan

well retail quarter. replenishment followed share the That with in the lower you and the It a lost start Sun well that. yet We in consumption We back I in Care QX. Care the good Sun Walmart. And we fourth And share total out share What in called in largely orders the lost across discussion. we you're quite held saw Look, performed Walmart And most was quarter this Walmart was the in quite at the -- of anticipating category. I'll saw up the think came category quarter. right. we U.S. point. and XX%. weather

levels, on think responded a shelf, healthy in exiting we sun on really it to year's speaks inventory quite well. quite going spot I feel good. had point we next where the the into So year adequate inventory were To we consumer season. your where We're total

around a the year Fem think So it. choppiness think around inventory a a a inventory sport. it's think and no year There yes, still was I good But of mostly through we than in a ago. in in sort Care, On this cycle healthier we again, perfect position supply because position there. overhang expected Playtech category I small broader not the entered maybe demand but shelf, take to way about down on of

Operator

Carey Chris Securities. Fargo from comes Wells question of next The

Christopher Carey

this So dynamic. just on inventory

understand on So is confidence back you about how any such gas? inventory thinking can should of comes assumptions to how to through help mind year, and or line Just that can much the of maybe with sort sell-through, then just you what and is shipping I around when And volumes? these in sell-through we volume hear we typically, be get help on which better cadence consumption think, dependent selling volume corrections things. sorts us

Rod Little

good at Japan, with of out X out within quarter X a way, our retailers as wholesalers issue. think original 'XX. that was there. in up and rightsized on growth that points that inventory for in the an don't system, we our you example, or I aggressive in the by we there a we it cleaned in impact, fiscal material put very we was 'XX specifically think guide, very That we And address when wasn't have 'XX finished in I some We where inventory fiscal don't took steps the position. know, Japan, own retail in to situation,

cleaned our an were up 'XX. every every cleanups we as There's to in Headline of we in inventory clean did get and and other we're we good. know retail category the what is into bubble here what So have no from that country world. inventory or and that we system and there here, is perspective issued around correct at we

basis with XXX volumes points. at points we look you of we've into where get and basis 'XX, from, you XXX fiscal come roughly down pricing, delivered our in As X% volume

over what's months. the that's XX past So happened

we as earlier, points volume basis combination the about being projection that XXX management have to of and for we basis, referenced points now Dan things. all X what 'XX, at growth of XXX As organic flip of net have being sales in those midpoint a revenue sight on an line we into mix, of our for price,

basis And unit XXX a combination so step-up of effectively And a it's volume. everything. it's in point

we have very less look it. than in look see to as we you It's play recovery at we have pricing country. volume ago, imagine, category by did out. You as year might we a as outcome, But a as that different broadly, some you

forward-looking confident we're how our know have I it think and in builds you anything. don't I Dan, X% if out.

Daniel Sullivan

Rod. would couple of comments, All a things. good I add

volume Just outlook. on our

organic. to point it, -- of in it's I that growth drivers this, fundamental X to there's X we're call anticipate going think

product of think distribution. whether place moves of about rightful into of Sun, one brand launch, it in we also whether us it's the Carefree think drivers the Shave, distribution master outside which new both you I new the the or come with prepared portfolio incremental whether heard play its as of Billie So talk now some in remarks, the is that's that exciting new brand and innovation that's

Rod take to, areas. out. kind volume X piece we to for those specific there's in, example, then the of decision fourth the which Japan quarter cycling inventory distributor second what is made So we're alluded in what growth in is where the And

I avoid The Japan. this would would the is comment leads any only us put we it of levels and up inventory volume consistent consider again, You organics than enterprise. inventory this the of just how for a to during -- what coming about make quarter volume that on year, think also we point talking -- about in year-over-year, from we're across growth confusion because to the cycling I fourth step other other is, that we're levels when in shelf together, those sort flights X pretty is maybe and

year. are taking We the inventory structurally of system next out

of We service the the deliver past disruption have think burden. same high lower can that the We we're inventory now supply like. lower level and and that and of time sort COVID cost of chain challenges at opportunity we

are XX that's will inventory far been. days, Hopefully, about that's which levels, retail making they've different we around the but the to do shelf helpful. So Rod more than normalized that of than tune comments was

Christopher Carey

'XX. in One said you're follow-up you I would fiscal be, SG&A that expecting leverage believe

So down a SG&A percentage sales as year-over-year. of

and of confidence? in had that? like the initiatives was You leverage control other up. or volume growth a you fiscal component are your that is savings key giving that there mid-single-digit 'XX in that have factors other it are Or

Rod Little

because good So think challenges I been math G&A there's here. some on question

reduction. a challenges, offset that. all efforts and XXXX the Part in with continued profiling And basis, inflationary factoring that feel efficient. we're cost more become get pretty G&A of I dollar by that work merit we to increases total our of dollar dollar the for on there comes that and way Chris, The continued the being productive good structural year more has we done. everything about been think basically for is And flat dollars.

We week. steps have a line of sight of to the this savings. many We're actually these executing

a So The there's getting call one that you've would also model thing inflation reduction. and got offset dollar-for-dollar by you proxy. quarterly we is get growth for out structural the a I your to comes think levels, cost as along last QX leverage. if of a I want is QX, Then is profile $XXX says what year, would good million proxy really good G&A million, to look $XXX

step-up this hit because compensation last to had year disclosed, good in cycling in to We related XXXX, that benefits. in And and XXXX against incentive a of step-up costs. as will changes some guys we mostly we're see QX QX mostly we related year, a in higher

in of the So quarter, 'XX for each there's is proxy we flat but is QX, see. some quarters choppiness see think being the we year-over-year I what what levels QX by

Daniel Sullivan

control SG&A as think in leverage can point we're control. we I the broadly, it just seeing as at together, our and we good. is anything comes excited forward-looking as would about making at how the this look and which because leverage, as we Chris, I SG&A more we right, much control. We're period on good And a SG&A And, point look up say, we that. And here what on But is put together. else need you're ladder the to

so to the of of effectiveness been with focused the how being improve opportunity But as also how reduce we we've we spend allocate year. very have business. we smart very for run next on lots And and efficient actually cost we

in and many that markets a product in to insight faster. it's markets. to you international some markets some been an examples. a structure simpler. down It's that international a about having B, very had the from innovation, what effectively that is layers the in talent of local and and just rates up consumer as with We've better from got now we we eliminating we've in this exist innovation received streamline global change. We're local or has too to eliminate company cheaper, built flowed capability a and so And to better and And leadership Historically, I'll and direct a leadership seeing give consumer as you're out of an handoffs that to global market layer. faster we've our the A, that slow addition as a result a ends better. that we or business those markets. result. ultimately today. in the we The innovation offering handoffs. talk what our There's the the it's long, seeing Equally, than markets but a in delayer process, and -- solution It by had put less handoffs and a direct have better team historically you're path then I consumers. result, between And layer those actually It's of international think X leading come growth local in connection. markets, It's eliminated

setup time line. historical So sales reduction, by cost a but for outcomes I the same having for better guess we fortune that have at structure the on and good opportunity offers

Operator

comes question next Stanley. Mohsenian Morgan from Our from Dara

Dara Mohsenian

a the return seen significant year the wanted I increased of at So ad subject granted having HPC leverage this despite them those and to at peers a are of now beta but I that's below we've as at rates of spend, percent efficiencies, just or get pretty HPC or of level of your competitors, the in but lot the expecting direct totally internal peers your direction, larger spend opposite about you're sales. level sort to more theoretically to being year some this point a basically really

up really XX% right in are time? level? to over increases categories? be sales comfortable with that do want context short of back near you just seeing about think you of elsewhere we're share then industry, the longer-term with the And get And how voice just is in the your the that go term? Should So, term

Rod Little

a point for the that rate of got outlook that X So XX% that year-over-year. you at of 'XX, is roughly see sale improvement in Dara, I our we've think

landed good now referenced that fund we've an spend, right doing. the opportunity Billie-Shave got We'll we're from in with and take time as from it's year 'XX increase been seen that has We've share a a a we and 'XX, you've acceptance specific that. definitely the we which Dan and that. that We've brand to rollout, of look with into and reference we've some earned in here our forward adjacencies, doing much that's peers, good ahead. after retailer got business very national we're expansion successful. where ad do we're it lean And which so and believe, And market strong very being the like roughly XX% we'll before. on to in to lead intentional

to and lineup. And Sun where will spend we've to We're the master We're category be this that. simplify and that. of we the what to going to factor going distribution the we're interesting. retailer We shop. super the have incremental to structure on It's to have going great retailer love Care lead to change. response good And coming consumer going going We some in think a had strong. as in consumer I We've will portfolio innovation brand believe the around to brand is strengthen year is around a that a also testing then It's Dan had it reaction form brand. simpler it. that #X to redo carefree be very behind it lean well. The referenced

leaning areas. we are funding some into then interesting opportunities incrementally that those X think we're we're And So as also well. shave

very in very have a traditionally we a spend. disciplined than it's a in-house It's It's So past. more model approach. the balanced

paid sometimes frankly, lot well. us. and We've And a out cheaper been not is a model of effective. that, we to have G&A of super do it's A&P shift which for So to in-housed it's things as agencies

other XX%, even takes you that when is effectively with leave adjusted an slightly But So fact. on some more margin XX% would XX% the our and basis that going on. we brands A&P has Dan? looks over factor private average, I out thing which X you for like group, that have of contribution support

Daniel Sullivan

I good only the Dara, add is would point. about good we business a really think example. thing our how for think All model, I XXXX maybe just

line gross is you've got funding a That you've spend. is that step-up got margin in in model. accretion top accretion, got your You've G&A the leverage line and A&P gross margin growth,

have about expense. to and balanced high interest currency that of out coming be and we Now inflation headwinds

of view So accretion, balancing we a generate challenges costs and of sort need that balance model, the just as and fund and said, it's the tight to act, that incremental the model some macro Rob at and of but margin top, sustainably the view on investment, the grow is tomorrow. of of brand today

All of that goes into about how spend. we think

Operator

Raymond comes question Tong next from with Olivia James. The

Olivia Tong Cheang

gross XXXX, about your mentioned the but margin. you're starting around then nice the to you is question QX in My And level. that point. still for that's expansion and Obviously, fiscal historical see fair comments expecting below obviously a bit

the to You building continue. -- do And are the margins eventually you the are sort excuse gross there? some can then getting of terms get those going into in to just incremental gross back categories to the expansion and What magnitude? what price. increases price blocks of where think mentioned in So drivers you margin get driver me,

Rod Little

committed very back if get go into that time very to remain back think a to gross that and I percent 'XX, we confident we back think you I can fiscal period, 'XX XX-plus the margin period.

an more so that's ambition. And think I than

got our through work that. I think it's we've deliver blocks we as to go building -- forward-looking plans,

that, very chain And year. what very headwinds we line impact on very had the roughly have What don't right? sight hurting And is that to basis gross have margin this to foreign globally headwinds distributed is bumps inflationary to that. it potentially control We've year, last XXX again points. we've manufacturing we supply network, and a got do committed exchange deflation do or comes. of if short-term So much much

X foreign I distribution in being work and and exchange opportunity line. have One have big lots buckets up to of is are and -- as of logistics as get the cost will with building optimize to of there we'll within see So there. continued inflation kind our margin in manufacturing, that blocks productivity still product over we network. We offerings normalize. that balance where pricing catch time normalizes,

will think driver. cost I continue to So a productivity be

is made around online desirability better priced that journey. bucket then building innovation being good the a good brand the revenue forward. call hygiene, as of set in consumers. up We've as choose when capability with it. and better We're our out on block I and be second And consumers we around management, The building just healthier margin brands. would third better showing a brand progress our brands, one to every And would and that's year on go accretive shelf

future. pricing, to I that, we'll we margin power And as think for more incrementally with that become will the continue out more build improve. that

Daniel Sullivan

being And seen on in Olivia, would just in your say to I pricing price international. pure the 'XX, question lever to is disproportionately you,

think where a in see have leading can already further markets You we which Japan so Shave of where or Sun, segments, we opportunities some position Mexico price, been to about take has executed.

America disproportionate I referred Rod management. think revenue a around that you also see piece strategic though to in North

So that execution good revenue. benefit promotional unit unit terms, drives good economics in trade efficiency, improved just

good So you in in North markets, thought how XX. see price both about we revenue more That's of international management America. those more

Operator

back questions, [Operator to the question-and-answer over to conclude Little would Instructions] further With our will session. conference remarks. this turn closing no for Rod Mr. I any like

Rod Little

the year above year another Thank look rates. Thank or at you, algorithm We and growth everybody, for your forward ahead you. delivering to time.

Operator

attending for today's Thank you has The presentation. concluded. conference now

now may You disconnect.

Edgewell Personal Care (EPC) 9 Nov 232023 Q4 Earnings call transcript