ENR - Earnings call transcript Q1 2022 | Energizer Holdings, Inc.

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Operator

Good morning. My name is Anthony. I will be your conference operator today. At this time, I would like to welcome everyone to Energizer's First Quarter Fiscal Year 2022 Conference Call. [Operator Instructions] As a reminder, this call is being recorded. to President conference of like Jackie over now Vice Burwitz, Investor would turn call the to I Relations.

You may begin your conference.

Jacqueline Burwitz

welcome and conference morning, to quarter first Good fiscal call. Energizer's XXXX

Executive Officer. A site, of are President Mark the Joining available will energizerholdings.com. replay John of Investor me Financial and Relations this today section Chief Chief Drabik, Officer; be LaVigne, on call and Web our

cause are company's call, other differ including future ongoing not make risks from about materially on statements results statements business which may matters. these financial will to are Other update forward-looking to these During to we reports included pandemic, SEC. we COVID-XX expectations these the the could statements. those statements. the materially current among and performance, These subject undertake the and based results file actual to We management's statements with do resulting are cause differ forward-looking actual from uncertainties, in that from factors and

estimated to discussed data, also and reasonable. market financial categories this call measures industry on presentation, analysis relates We from our non-GAAP in GAAP available is data measures our concerning earlier which reconciliation comparable based our on is to Information believe measures. we categories be to and compete we shown A internal where share is site. Energizer's and estimates today, refer, on non-GAAP release to of issued financial Web our press in

fiscal call all like that, regarding prior With sales. would Mark. to quarter to relate pertain quarter comparisons otherwise This and information to category comments and period I turn the both same year fiscal ecommerce the batter the to year the in to Energizer's Unless and over XXXX. includes noted, all brick-and-mortar retail year

Mark LaVigne

demand, solid to this share morning Jackie, year. Thanks, first our to strong a in season here quarter, first I XXXX results. to start good pleased our In distribution the to holiday expanded and led quarter morning, everyone. be am execution our and fiscal

operating resilience the environment first remains quarter team's a our commitment. preparation, results and challenging, are our While testament to

Before points from detail call the I there quarter, away today. take three key go our on into are to

First, holiday and strong. season the remain delivered team our our in critical categories

challenging and cost EBITDA we costs earnings increases through with are as containment third, very we well for to labor manage transportation, share supply outlook chain And sales, commodity environment as the adjusted in measures, cost pricing as additional of for net and result Second, and actions ongoing continue year. adjusted reaffirming our disruption. our per full a

lower interest and we gross adjusted the delivered at decline are COVID with price revenue prior maintain specifically top the our on strength million. prior expense, margin basis. the line, we organic by margin year offset roughly This performance flat our the for As results of quarter, prior to we increases, an price in in share the delivering and look a of roughly the Global $XXX solid was the by increases XXX COVID distribution offset of per top synergies input offset and decreased year. With from start our of and partially in decline points, costs basis comp expected the prior were quarter, an battery gross demand basis, margin we the cost. elevated partially as On was $X.XX volumes expanded increased for gross consistent Adjusted line quarter. year. for as in sequential view the flat comping year earnings business

an with of color taken cost to the provides want uncertain the the details actions John resiliency the of some provide environment. environment, rising have and performance categories, I in excellence our other our supply on on to more operate Before quarter, chain, additional we

healthy, remain with levels. showing robust Care Auto demand categories versus pre-pandemic both our First, and Battery

an the of batteries. On increase increase Battery higher more resulted volume. the benefited those using resulting category battery consumers basis, in category replacement a household, devices, drivers, value stack X.X% and grown have These and two X.X% in in frequency. devices usage trends per X-year from Specifically, the by in has in battery owned global

we ending down November months As category elevated saw volume. which value prior in decline the the X.X% was in the due X.X% This anticipated, in X was demand to and comping in XXXX, year.

during low-single-digit to a off category in due category has experience we consumers increased the the look anticipate we to As long-term, base, to growth as the value higher flat behavior size pandemic. to

key outpaced versus year brands iconic X.X a distribution category U.S resulting with in last driver. the the gain share Our point the being expanded in

value category, in Auto Care As X-year category X% on stack a to we versus ago and XX-week, up the XX.X% latest turn was the year a basis.

consumer the batteries, the behavior, cars changing established interest vehicle, care and higher of in the do-it-yourself being including levels during the car cleaning, of is and driven hobby, given with were in number as carpark in which growth such of personal by the renewed shortage by pandemic, new travel higher increase recovery of a driven a in car. a as increase habits, vehicles given in the and miles an age As

Care ahead, portfolio brands. anticipate once through be cycled it leader our grow continues Care the has Energizer look of category Auto we low-single-digit through we a that COVID related to at As will strong category the in demand. value Auto

gains innovation. we the in compete, U.S brand outpaced the our appearance, the strength segment the category sub distribution to due which of in Armor and largest Specifically in All our

our growth key the In Zealand, markets, New resulted in international Germany, growth ahead U.K category and has addition, plan the in Mexico. Care of Australia, including Auto

categories leads and in we provided resulting transportation the our we topic, Commodities, continue the to incremental important remains outlook healthy, the While November. costs. operating costs that to are macro This pressures cost rise, to labor environment which increased in next in are are operating me difficult.

and were in in America additional will third quarter the November. actions, have mix international segments weeks, these incremental quickly market. in our We and management. for quarter become are Pricing to effective the discussed the North increases couple the initiatives in of within offset to actions improved They second moved pressures through cost for both announced reduction last pricing and late

a We expect offset the basis. effect pressures actions cost dollar on inflationary these cumulative of to the

global supply In inflationary as pandemic chain products which and raw includes well challenges labor, as to material. disruptions, pressures, port addition and stressed congestion with remains source related from availability respect transportation network delays the to

of quarter. result we consumers first and this proactive dividends a we to investing quarter. a took and a customers positioned in As delivered our decision dynamic, were inventory in year, and approach needs meet successful current by as paid prior the the incremental in also This

monitor elevated We of network for expect with supply stability. signs safety stock to the operate we But foreseeable the future. for

and and categories remain a we healthy the of on our can with on successful to and delivered you difficulties strong stronger another the the underpinnings position than As see, in operating we deliver year. business track footing, before the is Even are results experienced, solid pandemic.

financial let about quarter. Now turn me call in additional provide the our performance to details the over John to

John Drabik

morning, Good everyone.

I would on line expanding highlights, that to two segment financial the out to like our changed geographical segments. has product Before reporting point two from segments

segments prior segment align Going and we reporting. manage more be will Auto Lighting the Products issued quarter with Care, Press first today Battery forward, accurately recast the this to release earlier and year new our two operations. reflecting how

were both continued its execution Auto and to turning organic organic demand essentially in performance flat. solid and sale, modest resulted strong with and Light, Reported Care a in Now strong our revenues In Battery decline another results. Offsetting replenishment delivered globally gains decrease a driven related X% X.X%. roughly and X%. growth demand distribution of timing growth additional Pricing these organic by year. was of volumes in the actions the prior COVID contributed in while

both our quarter second of the the third year. for first we pricing was in increases quarters this our actions Battery in The reminder, outlook this of in executed price we in and segment a at As Care reflected pricing prior. have impact in the taken initial Auto year, these and

fiscal we margin incremental and cost flat the roughly XXXX. that we the to first the second quarter experienced expected. as benefit fiscal implement mentioned, half Mark additional significant Sequentially, As gross adjusted of versus XXXX during will pressures was quickly fourth pricing moved quarter of

XXX and than of quarter lower as However, points by XXX XX.X% first erosion of the were related offset more to basis versus cost margin decreased margin pressures. inflationary adjusted synergies basis cost XXXX points from pricing, COVID gross

our versus committed to focus a us integration also remain quarter inflationary as the initiatives to in A&P offset spend. Battery the the sales Auto the of The This to investing brands year X.X% improvement forward. integration percent prior positions of continuous was X.X% successful long-term going as and marks on We in our well for pressures conclusion planned increase business. of our of of a result health acquisition.

to SG&A a absolute by partially was cost, IT compensation spending sales at of increased XX.X%, as percentage our as and on acquisition transformation. an $X declined offset net higher was related expense million lower integration but digital roughly and basis travel Excluding flat

benefited Care Auto distribution. at profit, demand, segment Lights actions strong and both pricing and and Battery continued Looking from

line stronger-than-expected more in input However, top debt for each impact through line performance. the decline the the pressures This inflationary profit bottom business Battery and a flow year. for million of benefits the segment $XX refinancing was the cost of expense resulting offset than to of significant Care. million $XX reflecting over Interest than million structure $XX past or year million Auto the capital prior in $XX.X activity lower our

quarterly under accelerated and remainder share point to August. our for shares changes over was the expense first year. number The out for the completed that of interest I year. remainder shares the similar purchased the run nearly the total rate last quarter million. this program X like We was would the outstanding expect of of In quarter, also we repurchase a to announced program the

shares mandatory the year common any Additionally, remainder approximately preferred XX to on million. average be approximately X.X January of weighted Absent shares. for XX, our stock outstanding converted the million additional will repurchase, share convertible

are of outlook look we for our number at we gross a margin headwinds. facing XXXX, As

primarily backlog cost to global freight. pressures continue transportation, driven We significant the in experience of ocean by

is these amount And highs improved commodity efforts, our combination all-time raw the we In challenge a at availability of actions, a rising expect costs. absolute impacting pricing pressuring costs. across management, and dollar sites, reduction addition, most markets cost U.S finally, labor offset Through mix for rates. remain material to major many

lag in we our November. This rollout pressure incremental XXXX. pricing recognition as full in the for as expect impact these additional between provided basis However, reduction the year due in gross actions XXX is to outlook us and the timing the to costs, XX of points of to much points efforts, our the basis cost margin successful and higher of

fiscal from impact the gross significant most the our to these costs absorb we see without the to incremental full second effect margin our of as in quarter expect We pricing. will offset

we benefit in actions the now, taking gross the we recover to of half of margin With back are year. the expect the

to $X demand in outlook for EBITDA XXXX our strength roughly initiatives, to and to range share headwinds per the our million Given $X.XX we adjusted these cost to and $XXX net our categories, in flat pricing continued in million. fiscal earnings the of reduction of the offset majority $XXX maintaining adjusted of of efforts are sales,

Now remarks. I to call like the closing would turn for to Mark back

Mark LaVigne

Thanks, John.

the mentioned to and I disruption. call, at delivered cost we're in and well the performed As also team categories the beginning critical our season, holiday globally. supply our continuing Like of rising many companies, chain a face environment well

are and team open our I our adjusted conditions, earnings our Battery with to we cost commitment. most our for adjusted escalation, of and that, priorities will am in additional Given share North excellence, action operate pricing in taking year our on reaffirmation and confident of recently continue in the for questions. Auto the an and announced Care. incredibly to these call to America aggressive net the outlook sales, guidance including EBITDA. for per action reflected With proud I deliver offset recent remain We

Operator

this [Operator Lauren At Barclays. with Lieberman time, take Instructions] we'll

go You now ahead. may

Lauren Lieberman

thanks. Good Great, morning.

Mark LaVigne

Good morning, Lauren.

John Drabik

Lauren. Hi,

Lauren Lieberman

gave terms. be on also knowing through measures Hey, dollar I for cost about battery color Thanks. really be shelf that's pricing it to be so of with John, very some that curious gross market. how when is clear you've price margin, what way progression to up would a in offered kind And on But benchmark recovery the of quarter further bit us able by the think great second our great. the up think in also on there to up more some should virtue incremental half of catching the I is, color making front about timing what gross just was about in the weighted year to of pricing the margin back on some think of incremental towards. in costs. already because you level then Any the been How just -- up marching we already fourth its we're half and would quarter be showing little

Mark LaVigne

the year we're then and [indiscernible] some feeling. Lauren, on detail off it to expect pressures this I'll on we Yes. kick both the John John one. how gives play

were executed Auto time We're we our aggressive November, our larger the in that assumption of inflation inflationary for last If already international last call just executed pricing time. in will will experiencing the price markets you increases certain back as take time, We've the January, more of first But At all it in well worse. we activities on the reduction increases and 'XX. made the a as would business. a the in then, We've in that were business. last Care increases U.S markets also environment fiscal had round. battery on on additional that number engaged recall, we revisiting marketplace. week second executed in this we already gotten were and Since has other go cost

at of most increases these effective the of All end be them will QX. of --

we So, to experience some benefit work into -- some as QX, have might we that cross price of you will enter of have John, through And, cost these we'll details? walk in the but QX. should maybe additional we through pressures the increases,

John Drabik

Yes. the costs. rest to coming amount fair into of start the this, we fair incremental decompose was through beginning, because Lauren, then there And of me at as amount a go kind the year. of let

impact then rate So, decline impact was net issues offset anticipate we took a we what I that to we margin. On costs, it And for And going XXX talked points pricing saving would dollars. basis, our basis the into gross lot Mark and incremental negatively about did the cost last of that about that's the point expect a the in roughly basis the quarter said year. would be year results. we run XXX that of

really additional So, the as significant experience continue as well for progressed, out we us. the went But It we quarter quarter first played to inflation. expected.

even just around XX%. RXXXA in that And category, Lithium of seen, XX%, increases we've things up the Auto significant zinc that EMV and like the higher silicone, November. we've since is items time, Some has Over same gone up up almost is seen also percentage. and gas.

when seeing, calling So, of that incremental we're points XXX combine for is elevated the full -- the another with continued we're costs year that basis you transportation headwinds.

the pricing the so, that about benefit headwind to and back should as of pricing side the points And Mark talked for year. announced the But we've what half basis expect continued that full give incremental just the the impact on about year, XXX to the seeing us in of year. we're

margin similar incremental fact of So, of coming to we expecting up. rate, that points the the saw timing we're we're dynamic margining basis mostly because into the not year, and headwinds, gross XX that

passing cost we're rate. the but not through So, raising

gross full the quarter, in expectation this on will with our have delivered moved our us actions cost get year view quickly is expectations. to we So, and roughly that to quarter take our original that margin. close first We pricing line

continued in, a see -- to we'll expect in coming the it We see back pricing half of the year. quarter. second in dip improvement And with the then the

Lauren Lieberman

Okay, that was some realignment to me a because detail the market. share strategic one work interesting to the was were been last in question, most And you great. you've things the quarter putting of then more beginning more of had pack price I on that Thanks.

suit just look in much kind on place, follow if widely and competition, of terms to That's So how asking of Thanks. might any seeing more that what really you've what on there seen any shelf you're in be way shelf, in about. I'm updates sets, feel.

Mark LaVigne

percentage take nature, X. larger the with We a increases. executing Lauren, pack higher price increase that sizes, more did that October effect we price into on progressive went execute did increase

did sense at execution one. and it the not didn't execution because of down strategy. was moving not because that striving made timeframe, For XX straight in double simply purposes increase, and this faster to ease executed simplicity a in we going good more days, for of because that environment, a us we were we time. the January, percentage it's believe on was frankly, this And price we we're with increase the because It

we did seen to show look realignment round, on in certainly we'll continue the first future. that's to at have our in encouraging. up in We It's similar and what something the shelf pricing

Lauren Lieberman

so much. Thanks Great.

Mark LaVigne

Lauren. Thanks,

Operator

Our RBC Capital next question Markets. comes from Nik with Modi

go ahead. now may You

Sunil Modi

Yes, morning, you. thank Good everyone.

maybe for obviously I John, results, line. So, could guide top very about holding the the full but mean, talk good just you your very, you're year.

pricing? from [ph]? grid just So puts everyone and And the of the category understand a in to that terms wanted to same standpoint. then could broadly, the you're what much takes standpoint just Thanks. seeing place taken more on you share, pretty just Has if competitive in

John Drabik

Nik. with I one, can start second that

as a the we across we've Energizer everyone seeing from retail I of about. you're at competitive where but inflation we I move landscape, competitive experiencing just all movement mean, as our is up that seeing, are label, look categories products generally category think product, activity, private the not talked

So, I gap, pricing think category. consistent price that’s the then won't introduce just other higher norms, as historical those across long -- than different say, as dynamic roughly a that with

terms the great QX. had In line, top of we a obviously

in volume deliver the off. that obviously, execute be also some We take chain mean, of supply very first start comping and anticipating organization, also it really I the to terms continue In would going price quarter to and there -- quarter. big and throughout outlook was execute dynamic the to increases the overall We're now. excellence just our of saw drive are to of last the we we're provided impact. prudent outlook year. And outlook good But that we in continue one November. to a year. pricing balance are a half year, instead, the change fairly for the try we the in, environment we've try Didn't for talked to about, feel right

we're kind first stick as to this at with So, point. look said, our Mark quarter, of out outlook we its going as

Sunil Modi

Excellent.

on I I guys of market, quick if could question. So, the improve any I mean, is just any mean, there are start that? things at you to loosening follow-up labor in seeing a all? buffer

Mark LaVigne

I labor labor, I mild tends that not consistent call to and be would it particularly rate of terms areas, some to of pay, facilities for have temp but say in very certain enough improvement been you that yet which location availability the say would there's our utilize. trend. in specific, a to many it's

Sunil Modi

Thanks, pass Great. will everyone. on. it Thanks. I

Operator

Our next question Teixeira from Andrea JPMorgan. with comes

go now ahead. may You

Andrea Teixeira

the shelf was distribution question comment, distribution had part spring year. Thank label, you of how the you season has on can during increase into seeing if you resets this earning private peers wondering you. and Good potentially I how private label you obviously were the of are morning. the demarginalization by My side. conversation availability. And an last in been is impressive positioning [ph]

been lot over share you've course, years. of gaining Of few past a the

you curious starting to that if conversation barbell actions seeing if to pricing your you. Just can? were retailers and pricing they bring Thank the just the

Mark LaVigne

the past. say of would discussions I are our having been we're in consistent what with roughly that Andrea, both main they've across categories the

I been a label long of, time. Battery the think private instance, category for a has for part

price year continue we've the that that's from at We very have distribution to gain seen branded same -- had be the discussion us always in part at a 'XX. we rate label into 'XX. benefit And distribution private same moving going roughly to of seen healthy game, private increase the a products, label but

as certainly make it's the period. into private But distribution some tend appropriately. look U.S label. as economic in the the if of something trade sure QX environments expect think at and has experienced gains the declined the positively uncertain from something watch obviously really a in as well in down work we've of softening commercial impact reporting as great label, We can't to past, we'll the and we some team. manage result globally I last get future, over see offline, we into into in but private It's that's you do you

Andrea Teixeira

And super And then helpful. on clarification. a pricing, the just

the and or that international that's saying were You be that global would mostly mid-single, U.S? additional an is includes pricing

Mark LaVigne

Andrea. question, great a That's

are just where executed. if can we me that so set there's see because I moving pieces Let different kind pricing and level many of we've

which took our took was back refrigerants Let 'XX. another in effective only X. of December effective fiscal that X. round first to pricing go August We round Auto me We was Care, in

'XX. recall the October you of round our we pricing If in X, all which in last effective U.S., summer, Battery first fiscal executed was and that was also announced

announced into executed April we the John we recognize both January X. pricing additional additional As pricing. X on date. and with around need a got XX, November, inflationary date round Care Auto We effective for an pressures with of XX-day and February also on that have about, the additional pricing an effective I battery talked We've

multiple rounds pricing. of there's So,

very that pricing would of in international get to time. difficult probably all we're But markets a much it you fashion. markets, our the international quick many, some and I is if taking provide what If would into say take form summary or too not of across

get of the one-time Some round in were will where in upon depending higher experience second they price others increases, in a will them pre-cycle future. the

be So, I increases, will of them what or the XX% And should the price X. place it portfolio by in would all is executed, executed pricing should times. most April be experience in, about some and multiple say all of of

Andrea Teixeira

leading helpful. come delay And competitor you many you're seeing some through super your pricing just -- in competitor show branded they there? and ways or That's are

Mark LaVigne

say we we managing that's with it's need to will we for and it I say our would respect just that competition look executing we're would them. how at it. when does pricing business leave and to appropriately I and that justified taking we we're think Yes, how not business, their

Andrea Teixeira

much. Thank again. so fair. pass that's will you on. Congrats it Okay, I

Mark LaVigne

Thank you.

Operator

Our Citi. next Nicholson Wendy question comes from with

now go may You ahead.

Wendy Nicholson

more largely Hi. side. you on with I finished integration focus you're the capital the I that acquisition. the of allocation wanted said know to

looking re about one? you've would on I M&A the expect priority COVID. program, of a other become that share that be So, you for more up look that up great. And you? for and what's backseat that of the a repurchase has open know, now sort Any of does Does to a acquisitions? new during you plan a going taken lot color exhausted make Do forward? kind that as companies feel more you maybe for ahead confident of

Mark LaVigne

allocation, a focus I the the I initially, primarily. to Wendy, say, gross is, capital that's margin on would of interest organization our recovery. activity. M&A the engaging before because delever part interest I at our leverage our an is what to And any there in say reduced comes enhanced a M&A of of it meaningful is bit is focus levels. just think would And When on moment little

John Drabik

Yes. there. add bit a working a amount capital, Maybe to We've little fair invested of Wendy.

we got cash And to turn down M&A we're some to on right normalizes, capital. after would financing then debt. flow now I probably would Mark's that working pay So, to we have to say free probably that as look point, that. And would be

Wendy Nicholson

be more But define summer you to from of going Anything to sort of do or like you the have side demand? Got they're I their perspective Care and the a car big like Cars, more will their for what a just auto look terms for what from of want demand commuting of how people sense cars more -- in whether you people have it. sort kind they're mean, spring Auto mean, side, much of have side. using however any on you habits when vacations. kind it. for a going obviously, the this sentiment Got demand compared demand in do sense it. you on do into traveling. And summer, of just on people I Auto the perspective, have Thanks. the last a and be sense, then that planes have changed

Mark LaVigne

is Auto very segment healthy. think in the demand I the Care Wendy,

to the think you of miles number as of if difficulty cars driven that which of positive park, people category, at normalized drivers increasing, the in of increasing trending is of new which more all I well the as look get primary the a travel, the vehicles, car buying back age having of is the are are level as of size people the because those direction. a

play you it category the basis it's look seeing healthy a Auto segment, very mean, XX%. by growth. at out You're in if with X-year Care stack I

Auto be year, off calling Care year. we're to that's have mean, XX% growth the up of Our followed. this I X% results for a last and

off markets. in share, our Care We international to in gaining appearance growth. major of Auto many have we're start -- great in a particularly We're our international

overall would to an I from consumer So, resilient. be consumers sentiment, say, seem

Our who about a seeing do brands category. I strong. downturns, of one away in have this walk an you're where interest as from people you economic some from result, have yourself. increased may to product if as certainly are do purchasing but the offset, will you think the it things it an natural also a consumers you the me And you hit interesting offset go do may, for

So, sort we cycle flow. the economic of natural and hedge as a in built have ebb

Wendy Nicholson

enough. Got the Thanks it. Fair for so much color.

Mark LaVigne

Thanks, Wendy.

John Drabik

Thanks.

Operator

Our comes next question with from Kevin Jefferies. Grundy

You go may ahead. now

Kevin Grundy

Great. Thanks. the on of guidance. questions longer-term. one Couple everyone. Good morning, near-term, One

How the Are you've input much your of number higher seen your Because, of in case input you hedged? as mentioned, current rates just you Just John, some spot think, for on cost, move moderation? I of maybe you exposures. comment higher, a flat? of key on the are any assumptions some your larger Are costs sharply holding embedding lithium. you

lower you last you one. And et drag could some folks? basis point you're that midpoint, then, mismatch, Are in then just and the anticipating you margin, a were is of to gross than as it in one additional more that comment your you So Are that. guidance for maybe a points think XX are more lower timing consequence cetera, helpful fair thinking of just I'll on say the would be I on previously? squeeze And thinking you end?

perspective, X look are ambition it Is To get know that years the on years? I Street -- longer X recovery. gross planning, to lot does uncertainty, margin guys getting what margins? amount to back like know, terms And focused just term, normalized and to of your closer you Wall back of just Now, from mid-XX% tremendous is, cadence today, to of focus very but a there's your just margin. obviously, it's path in best you EBITDA the a to there's on a current think I estimate

all for you thank So, that.

Mark LaVigne

the don’t in lot Thanks take you there, a Why inflation John. question?

John Drabik

Yes, right, Kevin.

say. couple things, a I'd So,

outlook, the in and go holding are we modeling our as the as forward. spot far we As market marking

So, we also there's there, expected getting anything improvement worse. projecting aren't no in

what what quarter forward. to did we similar So that's that go last we're doing

fixed up, a as remainder give things has our become far costs color got lot of more term year. with As the to go environment. the this ability The XX% on for is fixing difficult about I'd that we've of our to longer vendors only XX% in of additional the

So, done as far able we to fix have as probably everything we historically. doing But to won't things that we may we're can push out. be out

to milestones, appreciate, On you the than specific down difficult which this overall to specific recovery, or timeframes, Kevin, I'm pin can mean, environment. speak rather sure in I

what today we've think hole production out year. the a is make We continue from to way of to I price the standpoint us the activities cost pricing. fiscal dollar balance execute laid need and increases for margin gross the it this -- [ph]

to you've that also continue engage the lot from programs in heard We -- need to we've past. us a in productivity the that

of initiatives. We have ongoing an pipeline

is you business. environment, Given ordinary we've on really and course is margin short, This pulled But together program. improvement. cross the across. is driving a functional not separate medium look we're the of within an at as gross long-term initiatives, This the focused integrated team, which looking

in an is business us availability to digital other the management, its and cost network side allow efforts, we the on On suppliers, opportunities, to of can all things, production, to data those is going of SKU optimization. opportunities, components. connected lean effort which And transformation different insights, the management, which its to decisions revenue mix then end with continue to spectrum, going opportunities improve the better insight, be pricing of its short-term it's automation and and to other of on all that make that's our

going execute to and ultimately, and continue where we structure that get that that should the from back the it to pricing to be. while margin and perspective, manage business gross executing the through we're margin we're think So,

be In terms any there's many us at of think too of precision specific to control pinning now. of degree timeframe, to outside variables down a able I that with do right for our

Kevin Grundy

good. guys. Very luck. Good you, Thank

Mark LaVigne

Thanks, Kevin.

Operator

Our with next Evercore Robert Ottenstein comes from question ISI.

may not ahead. go You

Robert Ottenstein

much. very you Thank Great.

it's understand increases. a fair about talked on And increases. amount very fluid some the the those we early of I think environment, timing You days some a all of detail, price of of

kind were your opening you channel of another Just the that, different terms I whether in pack started And of was -- markets, both in if you now brick going also the is sizes. you consumer discussing and response, mentioned, or to one had think mortar from of it statements in sense any see wondering to e-commerce. and

e-commerce So still is perhaps your looking Thank you're agnostic. us you. update there, whether percent category what of you business could on the the an sales, and like, growth give

Mark LaVigne

the I first, can question Robert. answer last

these online. to was consumer, consumers and are over we increases price I been would good still And of say, have historical have that's happening pricing been around with part the and than by year, of teams are to seen and that the in is mortar would the much the fold both of they well. been to assumed both increasing of the resilient the I agnostic also strength held consumer also for marketplace. the up carry on additional think question and our first our season. a what's of due brands the And brick we've I quite frankly, channel holiday the but mean a one We What as store. our your migrate general as across brands anticipated. able elasticities execution have strength some resilient state better and prices the products the and executed we last our but the really Consumers we one

right parts them in going you're little healthier our also historical say elasticities from these a assuming we this now at And category mean, that than antiquated did price by but been touch launched that the when health, Wendy, Many the are for tools work, of of holiday you throughout their consumers a I batteries not seeing as mean, homes, years. it connected for continue. But stay connected talked a and let's of on we've we really We look take would what on Auto is additional would underlying Batteries. both about devices. perspective, on that to elasticities may connected of has As that bit we forward. a use devices are word focused of be I saw that they connected an is all all And with the drivers is these assume devices, to driven batteries. use. lives. battery bit increases, demographic. about I willful that and and Care category result, disasters They're

of certainly it. coming going the out a in healthier pandemic are You into other of end this than did spot you

You've home the up X.X% X seen over devices about go the in years. last

are Battery category strong. brands healthy, than the in is the the and been years. category, And our consumers at look several underlying Auto better demand category are our drivers for you Care it's when So,

both underlying Great. margin now and a break business gross your pricing, cost can driving tremendous. is you reduction percentage what e-commerce? It's the of of think our just U.S simply question your Quarter And opportunities of improvement. right out business health within businesses I is managing executing

Mark LaVigne

across looking not e-commerce, at just look you. have online. Battery all XX% But again, that at of Amazon, about broken I We out, if goes not will tell the category specifically, you're through of you category, the the

Robert Ottenstein

very much. Great. you Thank

Operator

Chappell with next question Bill comes Truist from Our Securities.

go now may You ahead.

William Chappell

Thanks. morning. Good

Mark LaVigne

Good morning, Bill.

John Drabik

Good morning, Bill.

William Chappell

got Can just bit us Rayovac distribution what points? the there of a terms have retailers' of that If points that does better you've and understand progressing. terms little maybe franchise more that or to price of you anything games, any willingness how in about in kind -- helps at trends -- elasticity, that price talk is

Mark LaVigne

addition That's portfolio, Bill. been a to tremendous our

a now. then portfolio putting bit a their home we -- limited into Having in strong right head your it's I U.S. one in that level have you customers Rayovac defense brand are they distribution think their shoppers. particularly in U.S add portfolio, the that the mass a of like in place to role to terms But key just at we're large very in in customer value in environments didn't being before the little main offering the center. of, is as main

gains to emphasis make trade I We would sure those to seismic not will consumers organization as we of Rayovac. But the shift selling company be our and I on always is not where offering want move from that, to the us it just a the Energizer. distribution a to distribution in as but think as on a should expect very Rayovac tool think don't The be detriment we Rayovac to can Energizer value space forward. brand, going I standpoint. important that up use we

to use to I portfolio think the going we continue need have specific it to with in a fill we're customers. as a tool that

William Chappell

other didn't Thanks. a more I kind is And it's too to to to for us in know over I'm here I that DIY trade track channel to seen the but up stuff Energizer year the or premium worse or similar until from that tell. value. the brand if growth I or type would if of out trade away It's the for early it it we've started to that. better turn guess started getting is what you've re-vaccines seen trying back past anything CPG figure tougher guess consumers that

Mark LaVigne

sensitive last market, trading the is -- as tend this think more some points where is to for I is be premium as others. were started is as very, dynamically you couple of moving of pricing certain very in we more shoppers the moving up see years What saw the is price carefully. brands. there we there price in than the consumers do watch What to are bulk retailers

We're a down And it that's You up very then watch in migrate as our premium. as back it trade other Energizer move going the opportunities future they Rayovac for will for and it's ultimately for brands into value also something greater impacts Rayovac the sometimes see and we're but a well. temporary going to opens will both to consumers, door business, watch. to

William Chappell

mean, bigger off last Got don't us people to new difficulty] fully power some base. that see and you means? fully category made give back why battery that what normal, left contraction. examples work some Can it. that as follow-up. Battery back of like feel devices grow don't some to they we to is post-pandemic, one of And school use comment go back the the [Technical I just those and of you and and you'll

Mark LaVigne

we think that talked level. elevated normalized elevated November And and what more what the I the you've pandemic get about saw level of being QX is to you through got the in with baseline demand demand. we've that comp, new being QX work said Well, and to QX the is and QX during

more and I bought devices. X.X% usage whatever have think 'XX routine the consumers more post-pandemic. bill outlook But in earlier, in provided going would is they into devices as the more what the course than more used home get in number normalized the that into 'XX. I patterns in of we people but were the that pandemic, do that step is stair back they're to

So, than the consumers inventory the batteries of a and in that larger was homes there's around it in larger pre-pandemic. installed need U.S The base world. is

to So, I base. newly think installed that grow category the Battery continue off will

and definitely going In larger growth in growth to that with in larger category, And accordance said grow base. terms we it what's historical of usage, that's going of off really it's rate. in to is the terms rates the a past, drive I think

rate, and the to could of I Because that usage rate to consumer escalate, growth higher that's those a of terms move starts category. I In devices. of think growth think going have that watch when we're to if Battery

William Chappell

so color. the Thanks for it. much Got

Mark LaVigne

Thanks, Bill.

Operator

Sachs. with from next Jason Goldman Our question English comes

go now You ahead. may

Jason English

of in. Hey, good Couple questions. morning, quick for folks. Thanks stopping

So first, margins to your a you gross on should think recovering think what you focus lot pathway of should be? it it be. to do What

Mark LaVigne

be higher it should is It now, right than Jason.

this And offset in the I it. in dollar from prepared would remarks, want drive 'XX away margin the right them ourselves is we've of we're backdrop gross number initiatives, let's also, of second then to do it's internal to of input course, and you're think see start and marketplace, a I pressures talked get to I then margin half But to executed, let's inflation. reverse too those get we the inflationary From and going are trying this price providing what of I macro color don't half get start to the let's of basis stability has you cost forward, got on a to this as that stabilize first, gross increases element back ahead in now to terms of trying about And John say that of the as P&L. to the -- his far in improvement. productivity initiatives think improvement 'XX. year, some get and point restore try in

Jason English

years? of contemplate these sure. to that work acquisitions. I'm margin lock the you bridges COGS, through and down the to not acquisition trying bridges the productivity to as level Oh, bridges, it to prior bulk think us related few the next we right for to your of help synergy about what's To understand either. John, gross

John Drabik

we've Mark got as a number said, place. Yes, in of programs

of I after. points probably mean, think we go we fluid to into want pricing, year. very basis at we a volatile we're side Mark cost to it's look like we're digging need X environment. But a realistically, XXX after to have, I only not But the it. going to go as said,

So, we're that. trying figure out after go way to to best the

Mark LaVigne

get intel is abroad label? your telling U.S that more the in is this of private-label market move. things label overseas. front? that started to XXX sold discretion the at believe not are be building Particularly label Why you price across stress like turbulence time? of to battery amount I and Last here. momentum many products pricing to as a mean, better the more substantial private we [indiscernible] in the on be a for got in to a because -- price seeing Do private have Short costs, bps creating cost X I've going the given we private expecting. think is so would it's model. the question, pricing on just is highlighted private label with are see what just We to is category than pressure you retailers. certainly the incremental matter the What pond

move them branded competition them some expect inflationary as And or expect it's quarter I at same set as a with pricing they're are. that next the two. to would in we their would the up think experiencing point pressures to I you tandem parameters. I that over to pricing result, said,

Jason English

Thanks, Mark it I'll pass LaVigne. on.

Operator

Our next William Bank of question Reuter comes with America. from

now may ahead. You go

William Reuter

morning. Good

their reduce this that's reallocate sort that from that in or going that regard allocation through U.S, you that that expect many So, increases recent the case? the either some it to in there you most price spring customers gains sounds the push and category weren't back shelf that going the space. like any to distribution pushed to the there's think you've of Battery with Do are fact be

John Drabik

run the I And progress discussions front Auto Battery those of executing with I'll our increases, in to customers don't and the at middle would. normally We're want let these Care. price the with both moment. round they latest as conversations

environment the we're execute the recognition those execute that in we and -- moment. fact-based have of going there I a retail we we order and the appropriate we're different it's terms of that cadences the reviews, and know we sure all through outlook. aware will price that in we'll all update we by is how of the a increases. know across make think provided say to line make We partners operating their and I of puts our takes procedures -- different in. the we're that have would discussion, and get they all know contemplates to Retailers go that distributions that The of we've line. that outlook sure as

William Reuter

you or guys you still leverage that? case? and Is reduction stated the the words be there. like target, put the sounds don't have commentary debt helpful as think mouth mean well Are to near-term. reduction, the didn't getting made I implementing about or M&A going debt focus towards down. you've more long-term guys comments But in then the it Yes, in as and to leverage it. your shifting Got firm from that of either something I tone like is a

Mark LaVigne

And stated about incremental I little sure that I'd but working a earlier, thing on mean, we for we're half have I we've liquidity. we've turn carrying a making leverages, investments capital that bit say the focused got really mentioned now what one a about right Yes, don't made. the target. as is we're a

revolver we added up got below million. and did got maturities. X%, increase the very We've $XXX we've minimal our So, just debt near-term fixed at

manage really balance like we'll that So, shape, liquidity go to good forward. we continue is in we and feel down as

William Reuter

right. it others. to I'll you. All sense. Thank Makes pass

Operator

with Morgan. JP Our comes Mike next Coppola from question

Let me now go ahead.

William Reuter

taking thanks our question. morning, Good and for

ones kind like ask little driven and better curious, how It any talked a the things, was was expected. other be he we We're shelf that promotions are to of of was we'd restocking? And one -- the of than there'll about factors much wanted space about Thank much just appreciated. seasonal by Just you segment. Battery because called you.

Mark LaVigne

we tough thing start far first last think pricing in, over had well, 'XX. in then did the other two we would quarter I comps the the as XX% was We in good. is, grown performing to had I year. category, very the Look, And from say as anticipated which quarter come things

that we and as through And category the the have the some pricing, so, did months from talked took when actually outperform numbers through X I call expectations. standpoint think to we we we a of those And ending November. came been on up the

but the basis You missed the season, category a about December selling X.X%. value part of was volume on X-year and the was up in up XX.X%

basis the me. Thank a for That's X-year really all you. trending over direction. healthy So, category is Great. a in

Operator

conference This back concludes for the our closing over remarks. any question-and-answer session. to would to Mark like LaVigne I turn

Mark LaVigne

the Energizer. call today everyone our interest Hope joining a and in for great has ongoing day. Thanks

Operator

The attending concluded. today's Thanks presentation. is for conference now

disconnect. now may You

Energizer (ENR) 7 Feb 222022 Q1 Earnings call transcript