CLX - Earnings call transcript Q2 2019

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Operator

Good day, ladies and gentlemen. And welcome to The Clorox Company Second Quarter Fiscal Year 2019 Earnings Release Conference call. At this time, all participants are in a listen-only mode. At the conclusion of our prepared remarks, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded. to host like call, today's now Ms. would introduce for your conference I President for Investor Burhan, of Lisah Vice Relations The Company. Clorox Ms. may you begin conference. Burhan, your

Lisah Burhan

Thanks, and welcome, Sharon everyone.

press differ economic particular, site, as determined and and EBIT are On broadcasting believes providing We're call analyze over a in as Dorer, me accordance will call read measures today's to filing directly The may and from helpful results financial call information discussing any to our Kevin in today Internet, of webcast's in Actual of XX-K forward-looking can the discussion disclaimers direct no our our our Reconciliations measures, these remarks one prepared understand important in available to results SEC located the found will margin, to company expectations each In quarterly with or highlights particularly earnings supplemental well this our performance forward-looking free profit. QX publicly most would legislation. tax ongoing management's Web by could the refer most revise to line management's Management Chairman relates that the Please as replay operations. and of then or insights with segments. CEO; our at a GAAP filings. the and refer expectations address statements. investors other available our on we'll outcome On today's results the differ for release, our call, to, outlook. and with I Kevin EBITDA it of or seven it that CFO. better measures days recognize to release. be be factors top that covering limited our non-GAAP financial you debt review at to plans. including, start and description with SEC plans. recent the Jacobsen, and enable earnings release, could our outcomes filings Benno contains undertakes this financial end on our to cash be update also results not Web obligation and for flow, cause our today's materially site, the in thecloroxcompany.com. of to SEC or but Please statements. certain I'll tables comparable today's forward-looking materially from

perspective Q&A. we'll Finally, his and to with to turn over close Benno offer then

category. this market wet Scentiva are where taken pricing Scentiva the experience disinfecting prices devaluation into behind was impact branded grew also we total our key strong lead company, sensorial to mainly consumers In segment, reflecting substantial now from Nutranext the on our cloth about new progressing provide Clorox love. the the Argentine shares muffing sales muffing I benefit results will again disinfecting with last peso we actions increased Clorox X%, products Scentiva Cleaning in and across to to four from come about innovation due entry segment in unfavorable X all units. For of acquisition. cloths once business along the Homecare grew QX the a strong business go cleaning result foreign benefiting three sales had where portfolio. to categories of segment. QX through growing the Scentiva sales according growth is will portfolio, the of have have currency Pricing part quarter. across with Clorox points That a launched homecare, of recently of plan marking by platform and the efficacy by the be X% the platform. cleaning We first points benefits including

ROIs investments since that in to scale continue this XXXX, by support and quality with driven meaningful marketing. our strong with have of and doubled digital promotion, business We advertising the sales

in business laundry bleach. Clorox shipments higher with liquid also of strongly the quarter grew sales Our

in price as homecare, Just implementation of increases well. going is

While total so in share bleach drive competition continue point up allow last tracked our X the health. our strongly recent XX category nearly in of is and weeks the actions possible us increase has brands liquid we in pricing was as long-term channels. followed only and anticipated, our not This invest benefit will to because price doing

volume growth. segment, within sales, products professional by broad-based our cleaning the grew Lastly, supported business double-digit

industry and and for recently business We scale. our into innovation strength building products, encompassing and space momentum this healthcare both continued mega continue offering brand re-launched and brand cleaning Clorox products commercial a new to bring and it to different as the Clorox pro, positioning drive

support X%, the shift program, household as quarter, season of partially lower decreased Charcoal and sales from QX well shipments reflecting a segment. RenewLife, to decreased Litter. in clients QX the of customer Charcoal glad, in early in in QX offset consumption. Cat second the primarily to to as an by in sales gains continued due timing the Turning

a As small XX% a for annual less business, representing shipments. of is than quarter QX remainder, relatively this

the the as into focus the Those are well which season. in up new plans on programs brand plans, building into our underway implementing introduced reenergize existing category. well grilling now aggressive we XXXX consumers Our is as to stepping consumers, for last bring quarter

that upgrades new also claims. sizes strong We’re significant include making and packaging

justified trash We reinvest which some the overall driving superior innovation wraps, raise begin as a the bags the growth category, will help the And In shipments retailers lower conjunction confident did bags seasons, including will our in Glad remain of we Kingsford, to due competitors steps In maintain including follow building, innovation Kingsford lower to grilling preferences increase. worked and storage many result not cost plans, so price aggressively value food out sales December. of we compared allowing our to declined us of products, XXX% that recent in focused well who to for consumers' gap of these price increase that as a value partnering an years. the grilling these has will as be shipments the for increased front, will to price so our rolling with be address in with the extending briquettes merchandize different launching brand. mainly for of on well brand hardwood methods. On

to in we're you value. superior deeply consumer As deliver committed know,

Our our this our back successful trademark of activities up plans record include have half promotional can protected aimed a we're our as defending Longer-term, innovations, patent profitable we at in which that we consumers strongest advantage. and track confident trading to premium competitive position. growth remain share drive business,

to Segment the points Bees and retailers going core capabilities to mask this mainly grew We business you lip within and with business such innovation in e-commerce shipments during more leaning customer with bright with wheeling claims major double-digit years, our another That and We're We're make. new despite additional mainly lip the Cat flagship In as and at We're retailer reflecting valley with we sales Fresh with The were Paws increase Our the a a well including in line major to competitive conditioning quarter. year, the effect as began in grew starting the progress initiatives sales featuring we'll care growth drive in as the growth acquisition, with Burt's back as QX, innovation, pricing double-digit had increases merchandizing cost Channel through shipments household national QX this momentum. starting advertising. in benefit. results the co-merchandizing innovation largest retailers, strong RenewLife that face major portion e-commerce lip into by over price national every property, expected continue a our difference another latest business. consumption, are claims, and in single behind in as also spot growing all are strong share Selling Mediterranean price about intellectual focus scale the by QX. in is re-launch confident this turning by of business. to hidden lip expectation and our of our segment, ForceFlex RenewLife, the with segments. also now any stream ranch double-digit and fiscal Clean dry as strength brands Food brands, our packaging channel we Paws a is and of new where care. volume driven Burt's had growth Nutranext generally on innovation, sales of effective an supported quarter time reflecting In quarter. Litter reflected machine, with increases, profitable of we as scrub Bees segment, price said, we in fee our With overall effective such this dressings last well significant products. yield developing encouraged this rebuilding portfolio distribution taking to well mainly of Natural on in e-commerce scent, Clean to grew on Nutranext events. for month. guard Step growth our products introduced at is our A strongly benefit saw behind fastest which in Bees of two added sales sales several growth innovation keep stronger the being back first last category at which track be business a our growth XX% to already in in saw Bees include gaining specified by Burt's quarter strategy Plus strong continued Lifestyle lavender steady growth recently which down XX the of night leveraging lift we're implemented in half. growth today. unscented our early with has make strong business sales Integration sales support trajectory in business of initiatives QX, in plans stronger With Burt's to this told This continued continue the driving about also of half in decline.

the Valley consecutive quarter. grew a We build to continuing on for are equity, which Hidden ranch XXth share

that ways Hidden that interest the for is through Valley than innovation are dressing. salad on on is trend, of uses in consumer One we capitalizing doing other

for tipping sauce, topping or over bottle of uses, are as alternative occasions spread. fact, In these thirds two

supported this by tailwinds Now we investments. new to on brand eat be will based segment we dressing strong the building back to play compared to With category. in the half, introducing are with product, dip insight, the looking ready in a stronger this

had sales its the Brita well starting to within stream innovations perform to the pitcher improve. is and filter quarter continuing segment, share of solid our Finally, market third lifestyle consecutive with and growth

building filtering our new now the which introduced year. recently in in about are e-commerce channels. premium that success back are We Brita We've bottles, optimistic on fiscal the of water available

to see generating great excited are we that they While are early, it's already reviews.

cost turning pricing Go currency was about strategy decreased Finally, our offset had FX benefit growth Sales volume savings initiatives, unfavorable as provided the international price impact. a X% with the XX segment. and quarter and to Lean offset our performance executions, across headwinds. In points Burt's Strong digits considerable particular, a Bees including by strong of generally strong to than foreign international increases board. double more business of significant the

our who Now, quarter discuss I'll will for turn FY'XX. outlook performance it financial and over to Kevin second

Kevin Jacobsen

Lisah everyone and us today. thank you, Thank joining for you

are to of expansion. quarter growth We to another margin and strong gross deliver pleased sales return

we remain outlook. deliver address a year that to will our in moment. XXXX fiscal Importantly, track on I

offset quarter. benefit to results impact grew from the XX.X%, Turning came of second foreign compared quarter. for Gross X to for XX point an by X%, the basis our of partially negative currencies. from points increase margin in quarter of XX% Sales ago at point included in which Nutranext year acquisition, financial X

benefits expenses. quarter gross XXX of basis of from unfavorable XXX the points higher XXX commodity year. half gross I at second margin in and savings, shift costs reverse sales our sales supply a sales Advertising in came at the to fiscal investment by to like of the a second that logistics and which and the driven by versus integration Selling, percentage little partially than came from expect a out basis note of of in a points year administrative more about promotion basis our of margin spending would quarter chain, basis half in Second XX%. percentage quarter, offset reflecting levels expenses included was costs. in pricing as XXX manufacturing and ago cost points of points XX.X% the expansion in as in we Nutranext XX.X%

We at retail are healthy XX%. a spending business for U.S.

tax a $X.XX XX% net rate $X.XX benefited quarter U.S. earnings these delivered as in from $X.XX came at reform. year second tax ago significant factors year Our a in X% versus effective lapping we quarter, of a from when ago benefit due in year of minus continuing rate in ago U.S. quarter XX% versus reduction about of operations a one-time the the one-time we reform second our quarter, tax the about to all Net quarter. a per share decrease in our diluted from tax in result

Turning cash flow. to year-to-date

As noted tax XX% release, press $XXX as our tax continuing payments U.S. lower provided to a we in operations from cash primarily increased net result by million, reform. of

Turning to our to fiscal pleased outlook. earnings sales year, are our full confirm we and

fiscal Our X% to to negative reflecting be X now year impact continues of unfavorable currencies. about of outlook in range sales X%, from points the

of anticipated Argentine more last peso. quarter, mentioned the currency I we the As from pronounced devaluation primarily headwinds,

plan the Nutranext we of Aplicare our of and assume sales continues which Our in mentioned about sales includes press about sales And as release, running now our outlook ahead points our fiscal to points program. three the from from outlook innovation benefit divestiture. X slightly acquisition, is net also incremental of

a products in to fiscal of pipeline year, trial. awareness have support plan the We the drive and with investments robust strong half building to we demand new second which of

of in and back to expect that expenses on our our flat in We fiscal to the be XX% assumptions complete advertising and of promotion to invest expansion reflecting be about our fiscal of to deliver year remain continue second pricing year, gross by we currency XX our half rate margin fiscal to are support include fiscal gross for Other in administrative in pressures. at cost the more cost at be at Turning shift track plans advertising sales plans. about although year free the flow increased benefits flat strong expectations a about and to gross year strongly margin, gross muted and back unchanged to of expected fiscal And spending XX% half to the the as supply-chain outlook, the EBIT finally, XX% margin, as given XXXX offset innovation spending and integration well savings down, Nutranext sales to as selling of margin to are year about cash sales, sales. half. and margin of

and continue EPS of $X.XX in the to to impact As our X.XX, be to in in we estimate rate negative these business range release, to our our change to the addition initiatives with pressures. half In us closing, to and exchange innovation and consistent our performance in our including pricing strategy results. address execution actions value. we shareholder I'll With with agile now pricing pleased second our is our be $X.XX our of units. the expect fiscal of did a from reflecting diluted continued our factors, we of year Net which all sustain mentioned overall cost now our Strong very XX%. programs Nutranext to $X.XX year over acquisition X.XX quarter from plans from deliver of helping largely for are foreign affecting $X.XX fiscal assumptions of creation, press first tax our with turn XXXX to focus is of range demand expected us and shift our core can XX% strong long-term EPS of investing couple tariffs, to Benno. that, are business dilution to our to behind And in strategic we

Benno Dorer

thanks and on Kevin, everyone call. Thanks being for the

key my share three me today. Let you messages for

expansion. quarter growth first strong margin First, a pleased to and our results sales I’m the with with half return second gross delivering

continues especially sustain in the is fiscal demonstrating devaluation about to sales our peso Argentine from currencies, win points consumers. line the with ability absorbed of primarily X ongoing last to increase Our foreign top momentum, year. X% the considering strong unfavorable Clorox we to of

in national Nutranex and We company for to and to are year. continue continues differentiating grow marketing products remains be X% innovation, sales which our margin. ROI company to in of strongly fiscal and contributed communications accretive brands be based strength strongly total sales and through Integration company's the investing strongly gross we also to our The is at to leveraging rebuilding priority expect major an acquisition I’m our sustainable is about e-commerce, that responsible. execute and focus and our growth, point the about pleased that on track second distribution against to continues in several we're pleased quarter is gross growth good ongoing second retailers. on we also very and as margin expanded My margins that expanded profitable, priorities. our Clorox strategic strongly

pricing into pressures. know, cost increased you to early Clorox As leaned address

and growing long-term. now on behind mostly can have our of and noted, are completed excellence have As most we our pricing actions, with executed categories our focus Kevin us, we brands been with actions pricing which that

We to second our portfolio of of the and platforms innovation new drive fiscal maximize products year. marketing will communications awareness trial invest and strongly in the in across half

last no focus stepped I leave margin pricing savings. would up in our unturned Importantly, and innovation, margin agile did we rebuild said to lean our initiatives deliver. cost our stone quarter accretive people we into and plans execute for to drive Clorox

my point having the shareholder confident Finally, to right value. that is long-term last we in remain drive strategy

relentless we we has to strong and focus closing shareholder profitable by bedrock to XXXX growth on long-term execution. agile is by while clarity because decision-making on strategy, and Clorox are of strategic has the have returns future. an the strategy And out come deliver where of sight our been also our supported strong growth environment Our in our hard still the set growth. emphasis current continued on

XXXX strategy, into will can we I you tell areas. we finalize As to lean successor critical the our to continue

will consumers us to superior everything continues and our Innovation be do. value delivering and to our underpin serving we First, apart. continue sets lifeblood

win more environments. retail particularly deeply capabilities in a marketplace, into our in lean to to omni-channel the continue We will dynamic innovation proven

that we all responsibility strategy decisive excellence focus to finally, will an continue you advantage Operator long-term a with we drive business. line for stakeholders embedded creating by to and growth. our as introducing on our in ensuring open how you. competitive corporate will to October. our mission look updated up early to And driven be may more living leverages even now focus questions. supporting organization you work be Thank We value growth, to our is technology in for in to critical transforming agile, October. executes early on to culture Second, and values business, forward a good you the

Operator

from Steve Instructions] comes Bank. first [Operator question with Our Powers Deutsche

Steve Powers

strong So lower I in And start. to were get you the Obviously, got year tax and rate and the full just quarter you've had there's pricing guess there's guide. from also that strong Nutranext. effects, contributions incremental I but a seeing

upside guess low-end? just within the guess outlook. care And you've guidance that that, the I at today in the within increased flown it negative allowing back promotion offset least the disallowing through? not What's is that that's at a half called from in full-year the So, raise that's household out I

Kevin Jacobsen

What I as slightly end quarter, you above much minor that little tune-up. I be XX%. of At a better. anticipated wouldn’t more view the I that. would tax say, a as too last bit we'd mentioned, read I'd rates into

be we'll XX%. I now below think

in So I've do tightened up think prepared particularly remarks, environment is little as FX then our bit that we worse, that we Argentina. range. say a in And I'll the mentioned

those range, allows and think And us both our so fairly maintain I offsetting for it the our outlook year. to within are

Steve Powers

for But bellwether your back forward specifically think back that charcoal How that you given in just in when topic to of oil increases competitors going a as current just Is and care a following. concern example, seeing lot little the where seeing may a 'XX this headwinds bags fall as a increases some is that were wraps started. thinking? does with just inflation are And promote price folks' I I the the broadly? of we're what a mean, it other recent that they have I in and the factor for bit places in into other categories are on there well. Is of defining household the given not that's that minds, -- benchmark, guess you're more to prices price

Kevin Jacobsen

primarily and much driven it's nat source more demand commodities resin for to from I oil, U.S., than and us and relates specifically would the say it because by oil. supply by As driven we gas

what of as good how one and wraps prepared broadly marketplace. would playing And it's would as the is pricing ability demand. talk would so start I our going I'd took very when our we we we Sitting in bags May, feel The softening-up June, had maybe while for planning say Ben now seeing aggregate in the pricing, you And to resin out inflationary, increase is we we will still anticipated the we that tell our mentioned say you, tell the remarks, today in about and resin not exception both about in to pricing. in expectation we when expectation here market. and that resin And a my our I back is I I certain on international be see same is execute business. are we level

a we in the broadly bit prices. of the less money back managed well that's Glad I for everything But that. to work We I'd will true think specifically defend will specific playing resin specifically. to as little trade the say we headwinds think seeing will near-term used the And would how with commodity though, to some quite to it also that business, so more I a Glad, spend know often that's expected. out because fund in we we're would do commodity on is pricing, you back will then slightly tell say is We've share Important spend there. on we what I Glad. some note business exception as And done something else Glad do. Glad spending I we on money

the worse to we relate something back the profit, it we're will margin as So year. but and in off no of do

Steve Powers

strong measured elevated level clean you just it maybe in is launches inventory half new categories. much with up, in in of pipeline in a those wanted, that inventory December. building through we've seen quick is while see versus one household December, It of just more less the just excess of inventory days. second being the much product some didn’t as the I innovation maybe exiting sell than given in How ahead

Just to better inventory for a that underneath spike trying get of word? lack

Benno Dorer

our XX can a inventory our of We're are were So QX now. one they little if bit. Nutranext say up is our you they of days year Nutranext. at I attachment, see of the in you last days the portfolio. XX that look mind Keep at levels, would bulk QX not end

in So strong that’s that And we of did of in year, the bulk it. pipeline this the in innovation for of inventory. rest increase then so because innovation, in a pre-build we a preparation have such the back half bulk launching explains of the

Operator

comes Your Bonnie from Fargo. with next Herzog question Wells

Bonnie Herzog

on couple a had business. Charcoal just I of questions your

could to you maybe that expect QX? expecting in QX? Charcoal, do did guys your amount in you Or in gross in QX you quantify impact then margins from the it move into the of First, you guys margin shift of are change impact maybe And QX? this the saw to shipments gross timing

Kevin Jacobsen

I early-season is merchandising. in Charcoal the shipping preparation December the would Bonnie, based is and in We're movement shipping on for that Keep shipment. bulk mind the moves time. between of just what January say the and timing all of the

And to So January, no shipments? of but actually we year the it question was impact is then to timing December, anticipated going creates in second the results. the beyond going that for

Bonnie Herzog

your for be could of business? Just trying to margins timing some an gross in this that just sense how on get that a shipments impact of of much

Kevin Jacobsen

margin. Charcoal pretty the much close is on have won't impact it company Yes, to average.

much quarters. between see to change expect in wouldn’t as I it margin So shifts

Bonnie Herzog

And into further place. then of could little innovation some about a the bit market guys you you the bring talk that

some in terms and the innovation resonate we're with existing your maybe trends than this in what product? you better expect seeing Just of to slowdown of how some of

Benno Dorer

mind reflects total seeing a and in we tracked are Keep on less right. business that seeing what in what you're less channels

So grain our salt. Scentiva what you we the take across portfolio a of most all I a strong with with few of platform of But has a as or back homecare. major across half categorize slowdown excited innovations innovation are plan very the very in them, in would brands. Lisah notable mentioned about as a

that we're in cloth product to wet Our combines the launch we extremely the first do very that’s Clorox is that’s category an for product well. we the not largest big a in are category. the a excited SBU new available experience differentiated innovation space cleaning will disinfecting, And which that Scentiva people continues mopping our also And performance available launching love oldest sensorial with into delivers and a that that brand but about. this category today,

Hidden brand, And which Valley Nutranext do doubling ready we of People patents across pizza, quarters to the products to in dips, category and So that's of we up brands. excited XXX% as Glad. And And timely is we're And as paws that growth. about hardwood you the that that into all backed expand on early the well, extremely launch are and uses super eat share continue We're XX very and salad not salad on least about which we use are quarters XX we the see of today the starting on about we're excited to that's about, both wings, use a it Glad with $X dressings. so of about the access dressing, in veggies. food same easy expanding where across briquettes continues platform, ready great latest we're are healthy customer will consumption well the to make to We're technologies launching that is of to market. reaction chicken clean and on excited or three terms by the launching portfolio are billion course where eat that's very outside innovation as Hidden on platform size charcoal. essentially on litter. almost then going Valley in last size premium snacks the it dips but

that investing in also Kevin said pricing innovations, back for very Because in to will the return that for was strongly do strong behind and particular of it's us to long really spending. early. have focus it half, important we and behind and why and largely we innovations will and as categories have So noted, organization behind now our now aggressive set brands that doing a an us on retailers growing growing we that's

about both earnings. good feel able why where our here and are that's to So confirm part we sales in of and and we're a sitting today big outlook terms of

Bonnie Herzog

And it of get advertising be timing. be clarification in sense But amount up weighted. what like a to just discussed, the just certainly drive then QX, trying trials. one terms It you I of just of that half fair seems lot support, there'll stepped a back on promo will and

So and bit innovation, QX this of different in drive mentioned with this could Maybe more is privatize opportunity I for be within to what categories? then maybe your you think little you're guys for of expecting trade-up huge some also you drag a on a second, a question or first but you QX? than

Benno Dorer

back us the is and company bulk gross that Maybe our which half. the is that consumers innovation us willing of last to we this bullish of part is as margin of for the in first, one Bonnie. continue why of feel and company, innovation the Trade-ups bulk also premium accretive this value segment, the pay reward about and believe margin in to a to we hallmark be see innovation as they

but So innovation. job through we value at the and a nice focused, do to stay continue to value capture premium

of conclude So of because on is because that wouldn’t in then one of set to the terms focus with also necessarily know quarterly spend, just I these shelf platforms drive reality of increasing observation And The in is our not quarter. eye retail long-term and innovation timings certainly that. and that an you true.

strong And QX. see predict back for a not you'll stronger now QX to a whether across but spend the in across quarters. right for than the You healthy half, both is position one spend quarter will other, see I'm us and

Operator

Your next Sachs. Jason question of comes English from Goldman

Your line is open.

Jason English

stepped questions, On to I'm couple can to versus the XQ margin first flow clearly, there a Is to back materially volume reason a grew about last in for second in mix is the second. A basis the organic it XQ, price fair the first benefit contribution second. the trying from that price XXX half the in math the get gross get healthy that math do that in was in again understanding that to the of that better assume and substantially suggests quarter the mix to mix. quarter first this absolute and on to that to points quarter. We was price But quarter. stayed some try quarter it through clearly price

what is the So benefit so, second? first spike in fed in quarter the that the process mix And if drove the that second reasonable? thought in

Kevin Jacobsen

price mix, impact I price of to think We that only tell As of actually we half talking what don’t lot it spend take relates here's about because by I'd you. the represents really a time mix, pricing.

expect But you the elasticities And so you price, to One, pricing, there volume the take in more adjust near really implications. two case. you back. per with to some as revenue see generate is term consumers pull

that's pricing. taking other pretty from through to playing and Our top you the But investment you the it we six allow headwind history out because trying first in year the when and and is has have months know of look the that as face and to play there's it I'd you expect to line balance to how taking One I currency pricing. And we're the continue We're pricing the impact we offset much of little issues year. that's take frankly to address us how us, the what not brands. you for for why both in we’re at of been pricing. cost very would out expect it's tell essentially those together, the round this

reason we’re that's really it. primary so taking the And

going Burt's As quarter, really pricing. then the a results. across of additional for the bps Cat in impact And these margin accretion impact greater expect entire why forward seeing, We QX, I'd QX. taking we And got and say only charcoal is if the brand XXX. improved gross taken the increase I in in in what why in in that The mind, you we've bulk that's Bees and had portion in not of see margin quarter. are the pricing portfolio, started a and to August of then XX keep look what was from you price relates September the you’re only at really about recall to about we Litter would pricing this you place QX, reason got that it is

relates pricing margin those expect I as actions. reflect the from it the additional some So fully half of would of continued pricing benefits gross back you strength to year the as in two

Jason English

contribution change So to didn’t and sales mix second quarter? between the first

Kevin Jacobsen

Jason. generating revenue. benefits. is I'd we're And the tell pricing. What to getting No, you little is it Pricing as benefit relates really very to

and really pricing. innovation, an focused points line, growth of X example base on the from revenue our it's points X business as Nutranext driving QX, what's look from not primarily in you that’s top If

Jason English

I will another then. question

quarter business comparison. But substantially what U.S. level. give to particularly key the drove the puts few from aggregate, despite at you walked first of of some can in a stack individual takes organic us and basis? sales deceleration, through I decelerated the On high-level, the segment you your the a drivers we easier

Kevin Jacobsen

data, same don’t I Jason. see that

Our X%, base and QX both QX. business about grew

at, the the not I’m perspective not but of So what sure the looking you performance on are that’s we business. have

Jason English

part just your was of these results. with I you. it -- it's offline. But up will Thank from Okay, follow

Operator

from Your comes UBS. next question of Strycula Steve

Steven Strycula

question, have can for I half year. grow, that in get for pricing, think benefit back a business, my shipment those curious the will up. some sounds then weather? businesses the follow have lap through you charcoal as I you the Do then be initiatives some you was particularly you the renewal underway and and like That charcoal put first of life easy

Benno Dorer

are that on First improvements of news update focused really the no grilling versus all, XXXX the season. gave, calendar major because November we our year today,

will really we due less an fiscal would soft, as is explained market Kevin say related then XXXX my then Keep a clearly QX say that to hard is better the program. a mind do rest I timing is shift primarily And that QX is early-season a year with which year. clearly, components, it of was there XX% find year. help. XXXX describing. that enable wasn't small would than shipments. But us So the that Better in somewhat that's be in calendar customer is the for expect as to hope great that as should the in retailer about will way activity half fiscal we last to merchandising to improvement I hardwood where back I will launch year result of should total business this The than predict. of will we it's year weather see briquettes would I year, pricing be. all the rest that And wanted of to Significant QX, help. on clearly relative probably not to plus think Pricing of this upgrade be fiscal just better a all of XXX% we packaging But the the help. help. to albeit would

Steven Strycula

basis, $XXX on And follow-up business, and for Steve were year-over-year to the million RenewLife On is $XX up question then my a inventories. question Powers' Kevin million business. it's understanding you a about

for in just third to from big the there to that I'm that and an perspective are to goods and fourth trying seems anything the market else should come quarter finished So or a contribution Is shipment ready that innovation? understand build of think year-over-year into inventory. inventory like we support about

Kevin Jacobsen

a on Nutranext, There's see say it's as business some few less opportunities fairly coming Nutranext. that also to innovation us that And a mentioned. new real we forward. for as than year. do I'd going inventory, primarily a then opportunity owned it as rationalize And Steve, you One, that could imagine, some have we've I've things. an is so we

to on some some well pre-build products as we're is that there business. new So preparing launch as

Operator

Your with next question JPMorgan. Andrea Teixeira comes from

open. line Your is

Andrea Teixeira

expect losses. you I'm sales shelf that household because in do space the QX? staying positively some saying So you flat And called the out

within reignite? new to still with you. displays. this looking use Or innovation something So that I'm to to year be wondering Thank if and that's can you fiscal you're reverse going promotional dollars

Kevin Jacobsen

providing and household we an those be the and not big to two the see that competition some when in of in pricing QX do. those would we environment for which and Andrea, would not well. going businesses know two seeing that unusual the to I Glad, But very would a you see But talked Again, these costs now should the note start Glad hope as is quarters spend about negatively the we're specific are starting ideally did quarter way, impacted not very, without to outlook want what relative certainly we mean and of for that particular to segments, pricing promotions, and that businesses. businesses rest follow. ago and trends that at minimum year of seeing. really go we're frankly year where now resin talking improve other we're we the I'm sales the to where in Kingsford, trends I we're stabilize to course goodness take you and back better and

before both But in So that's to expect managed that QX that's would noise market noise we've the and on that before. also see seen I businesses, we've yes. improvements

Operator

Jefferies. Kevin Next Grundy of question comes from

Kevin Grundy

I like medical, margin would to gross come to back commentary.

chain were back half drove improvement up spending, So margins of the was your quarter. it. in timing was still and to was and quarter, half of which I year didn’t it was also The you the comment expect comment supply this of gross see to last comment some the the think the

had seemingly bit So what than better you planned. a little

maintaining and better then way of this like are And bit that no gauge change then trying driving if year. Is little planned that? trade perhaps So you seems better of the than outlook. commodities? commodities the just but with down manufacturing dynamic spending how to bit for the conservativism outlook, right informs you came a in I'm bit on about? What quarter to Is It the worse lower think this and the in a just certainly to the view yet, could that? level drill like it maybe some Glad, was seems given are in to respect because logistics. pricing

Kevin Jacobsen

I would not conservative. say it's

and little of think heard prepared see very timing. and line bit transportation, headwinds to cost are of FX But will that little bit you we year the landing. resin closer some commodity than headwind money our out mentioned a top will more on out also lead manufacturing about will little think had still of consistent half favorable bit XX as so margin are projects we a a is the we going in that monitoring to of of I half most think for we up have margin being the ship year. QX I as the little but And more the that in back get between is to part be remarks, X, year. margin X probably see mentioned money of we and because are a We more is expansion savings, that gross gross planned balanced was that ships in FX to the There of a quarters, my some QX spending where about a And be will pressure cost a within we savings to more anticipated, the as I little point for I the probably some the spend the view expect say expansion in in half. expected, investments from you to talked bit long back just have that, QX I that would of environment our a impact. future. of months this do I XX the margin would be lighten items I half What tell cetera. playing the et shape atypical bit as the through back some not than

of items And picture say But all watching. our and admin, items commodities I are balance currencies. cost the volatile so do outside here. control, going those are lot the track. I be guess productivity, that and FX, on I There is of pricing, well a control, of want items very would But say would are bigger can we some I we savings, that

balanced and So prudent it’s point. think at outlook a I this

Kevin Grundy

quarter. this and And tie pretty in What there? And care, food And you of pipeline at to last then areas come respect personal point? just past. seeing could and in interest, with the terms the deal health lot M&A. commentary there update then transact about and follow-up guidance. one to your should guidance received in are what's the prepared capital on Benno been repurchases along? of enhancers in of deployment, of there, impact clear attention right are Any you've share in wellness And you then in And you terms included the maybe a

Kevin Jacobsen

I'll helpful, around our to activities maybe cash fiscal talk most I'll your to And question about return start the be perspective year-to-date. with shareholders.

So the shareholders, halfway really the increase May. And the and we last combination shares share recall, then That's May year, repurchase to about a in dilution program. starting dividends returned it's $XXX XX% that's versus I in Specific both to through the the initiated driven all last as and repurchases. been dividend took about we've $XX helping. management split second certainly almost the our million that XX% for share in repurchased QX, program about that's And up six of open market assigned million the to between and now quarter year. you equally first by months may of, we

and so And authorization. quarter I'm included the in activity in are would when program, my the quarter. I X% plans still relates changed for of talked about those the And of open no the the market tell we repurchase total balance second certainly outlook. year as from new hasn't share at to last it you

Benno Dorer

be of M&A. quarter your business of continue a overall then Obviously, cash in to priorities was cash. the our to This terms lot on And flow, very up question Kevin, we continue strong generate same. a XX%. And

important business core most our build core continues be the from maintaining business so a and to driving our job. strong continue to We out,

also supplements do the We've we to Lisah RenewLife, work keep describing some that was to shoots got like be driving vitamins, and green earlier. but on The minerals business. second certainly with our priority shareholder continues to return

that. right our Nutranext We merchandising at around significant we to of priorities. the initial we showing look we're that But in so particular with think for quite as the the also doing should well, shareholders good same willing obviously able like that which drive scale, we're M&A come about to right with retailers we board. is along, that Nutranext, to at We And a and lot that But I our we're have. well trigger. do And lift pull to some business in we the pursue means can wise opportunity continue really businesses meantime, could pleased the things think now with seeing very continue the absolutely events. price, with is we're

Operator

comes Ali Dibadj Bernstein. Next question from with

Ali Dibadj

a them little about point would So, just clarification. that to hearing, I'm things I'm for a few confused love maybe some through

have you I And have about the worse. sale. So time tough doing supply and think one so investing coming know you're then I which FX, is, get of growth to like the have be why of have the margin. not it being is you're I helped laundry that answer, sales that a investments, the some there's question, I would of earlier, sure isn't line you X% you was your chain on am a thought. I XX%, Jason's really But there's if what I going by from I Kevin, come flex your magnitude that's sales, how I something your pricing understand for negative you're about of about the to it business getting does quarter business said it’s XX%, Argentina. going to want But really more. of get don't else to still not we maybe invest XX% in Glad inventory X% seem business, one the top in. that. XX%, perhaps it gross maybe through HX And like that's that to and that. just don't of seeing terms feel HX seeing retailers when is business pricing pinpointing elasticity means really in it like something that's still don't a get feels

I to So any on out that? you And just long am trying lip, I am figure having going guess, what's Can trouble. for I'm on. just the help but sorry I of

Kevin Jacobsen

list, at can a me and answer take questions. if some a your few we see shot a It's let long of

you I'd inventory if of inventory, around you've to say opportunity business small opportunity about the Nutranext said, improved that to I been acquisition. attachments, And relates And is one as think you million it's it good there's a So acquired And just improvements up this see lots them, to business. when portion rationalization, as of to significantly as in that and include is lead certainly levels. our drive $XX would rationalize that skew I which quarter-over-quarter.

view So And the of us. that an change the I as that bulk inventory. opportunity for was in certainly

the improvements. that's of go drive we plenty And think opportunity It gives me I can we to business after So time. that over acquired.

investing know, top had you the I'd on When us of the what much out Ali, I don't business the question to as impact do pricing line. and XX in in volume to at currency the net step impact mix line. we to to headwind, least lot help term six little near a aggregate line, take Look, we back that first tell recover that keep Another top anyone expect to is we've talk years. our cost you, and that’s pricing has price I'll to and versus business. because we you want we why over have grow top in and you very months but taken When because the and categories. the

But cover pricing. grow I retailers think partnership to helps can their strong do we cost environment, offer. that's executing have categories, the really and why that we're that that's the so innovation them And to appreciate we the

line. executing are top pricing We not drive to the

Benno Dorer

so are retailers; these so all inventories most it’s helpful to and electronically on. orders; things ourselves with us of clear there going the our the pride inventories; to very want everybody to to clear our managed so that so Kevin strange able Ali, efficient. And company, the for And most this additions, great to knows. be matters we a clarify a as deal on the be of profit nothing economic are I maybe as than think our inventories two is in everybody I flows obviously expected. And being that through here

want manage we including certainly sure And business, line executed to Glad, loop the pricing. perhaps our exactly to understand just we be to in with to and on was inventories So we that, that Nutranext then on that close I entire expectations. pricing tightly expect all do continue our our

in it environments, due now we So a full we resin follow. to seeing pass-through. competition the change see not are But to

not back that followed, So also And on confirm laundry gone has with one, and has in temporarily of pricing bleach. which I through competition I line line we've fact from spending laundry on in the we're Clorox want to expectations. growth in while market performance this also liquid we top promotions. think didn't noted expect share the also strong in in terms And

other sure So price with the all I laundry would executed want along line to that price with well increase make are that the are and understand very now going plan. we increases in all

Ali Dibadj

And then wraps. But just general. legacy there on I And around point laundry, in thinking about portfolio bags particular this guys in the business, how portfolio how think it. not maybe is is your you about that and core

behind characterize not got feels well. international of were do doing a better about businesses, is bit, doing do Ben have of the me the on for How to now? you clearly even FX Burt's well, I you level You would is I hear here doing that little much lifestyle that. saying How the little I half have And for really to is a if this. doing be But that doing it this is much get you a planning competition acquisition declining. makes And doing like some -- well. surprised And volatile but particularly the is terms? guys we’re characterize concerned that. plans pretty Then in another This you on work me and well. those issue well. portfolio you don't How half following, I fair, feel right To right you not business portfolio big that planning still isn’t is RenewLife, of is declining. the worried the business new which but on your not already this just recent include issue. understand was acquisitions, you it.

Benno Dorer

XXX% with know XXX% So of that does if well you the of all, know businesses. love that their time first the to company of a of is. would who I

about that set as this again quarter. we've think would So context, noted, say I you

very on in We performance businesses clearing. strong all have

super on all strong that had have in then in and one duly but got We issue issues they we where good well Household's that's related the are you is its executional green we're handle first very do behind to then that and very have Glad, we're noted, continues on before, are fixing us And well. that. to international. Clearly, litter a that's seeing shoots issues done lifestyle. And about Glad performance and Kingsford. we've we Kingsford year, pricing business talked those some getting that for and businesses and one we’ve and are on RenewLife we've temporary seen

of that's growing growing We're U.S. with mostly Argentina. X% profit and in across end dealing day, in difficult the environment. the We're everybody very that at an the dollars in So is FX U.S. we're issue international dealing, dollars business. a

exclude international look Argentine So business you I the peso. really would at the if actually as doing well,

all We called like portfolio our at not we're and So how like our looking that's portfolio. you it. we XX%, XX%,

to we were us again that's going it's And well, every upside. that we do. of XXX% and doing of to doing there the expectations say X% fix, growth and businesses the happened. do said because that we I if we're margin feel when to what sales them is that better. that the we're it's that that then to is if of is the you what's I at sitting But about us We can you bashful know, company exactly also look to expansion and can not how gives fix long gross we at shareholder hard is some an there it add like case business unit run have it business while exactly value. And over gives doing opportunity

handle feel in we on have the firm I majority And now the exceptionally portfolio. of expect launching good performance, back that And portfolio on we the exist, in in innovation QX. well So the particular but focused we're done half. about all issues few strong a behind the vast has the that continued

Operator

America Olivia from of comes Tong Lynch. question Merrill Bank next of Your

Olivia Tong

advertising I wanted to on follow-up spend.

good points sales the planned current the which funds, second But advertising in of now is may as X pace? innovation drive quarter of first that flattish generate I places of half we're first organic increased half, and of the could an Or you've sales advertising think driving always growth off there in getting the sales, even Do the greater to percentage you price. acceleration can allocate because for had that because other tick-up. be think plan, to pick-up you one you closer been think returns? still

Kevin Jacobsen

we it all What of lot have a your going say a got We've right. back relates exciting we're pretty and that for I in, always We've to confidence innovation to planned heavier is half advertising a as investments. so pipeline would we've provided support support context of that we in about driving the right outlook been level we've innovation the it's I the got outlook the talking But to today. think the we think that really to investment trial. deliver and awareness

Olivia Tong

margins they are not And follow position, I it if price? on bags have that terms commodities puts allows Obviously, your competition think follow what charcoal, turned you just else okay I you think then into and where didn’t have think if them them And in pretty allows do pricing, follow-up in what to any pricing? you? a And not insight the now. you with tough do follow. and if of wraps to like. But Is to in just say through the lower could because and particularly

Benno Dorer

pricing underway Olivia, is right. good still Kingsford Yes, Kingsford. clarification on

you So not so remarked that's competition not had that is following, the case.

We in are Kingsford that executing be will this place now and spring.

resin came So softened our but resin, costs all talking we has early seeing out the and we where know, volatile we competition because excellence, not increase very seeing And Glad price and since with out as we we executed that's are price were increase. are we is follow. really are

up, and and because anticipated. not promotional were up So first, unlikely. then the consumers focused is we pricing for resin with will that's else continue on trading we a like effectively justified period is been be because in now with saw the strategy I innovation. before to use of there price to our had in on softening. this probably cost want And That's we bags is more But didn't consumers to follow, still We be clear out very XX addressing with trade everybody future, it's less that what trash because category where we've increase. cost out a are than severe that's consumers resin increase years we were spend. happened they And to

OdorShield of like even strong taking saw rewarding with is backed great investments consumers ends. So the we mix on why end Which in and pricing other where and by the which our margins that one innovation you indoor the on down sales differentiated quarter Glad but core grew grew and were nicely. the nicely profits nicely, quite sales where business volume focus, actually is grew

that's up is earlier, much It's solid It pricing straight the I innovation And driving it's So working. pricing and are up term. by coming mentioned sustain strategy. have now. backed easier certainly out, that patents still long also to we in we take

backed in may that support brands strategy will player it you explaining hard difference right of now be think in only spends temporarily me spend our innovation as that the are combination have speculate. concerned, and though promotions. we pricing and that would But for that that company category innovation by this pricing as our if to If and far competitors the we for is that you back we on though continues even to does trash your the even in be be take

Operator

of from Jonathan Feeney question Consumer Next comes Edge.

Jonathan Feeney

growth matter there innovations, in it of for more I places other laid that in see Or I you have overall. side your for first wanted is beyond And off? strongest out that total deck Burt's about noticed personal you of for in personal to there little Burt's ask by that? in second 'XX. Bees last products like succeeding side to would pipeline for bit? the seeing? care I what Burt's are you'd where or versus be natural for Bees Bees Is Burt's you a Within Are distribution XX didn’t of the in 'XX months it beauty products mention innovations those heritage plans are the been channels has that maybe terms and any that half the as you of innovations, more didn’t Bees the say for you natural care for displays? for Where that

Benno Dorer

so for that. up lip good quarter strong single most driver continues The So high Burt's to single important be Bees, about care. volume feel sales up, digits,

the the business last behind a that's high well single-digits, that for Burt's up business also always driving high base. used double holiday did also And grew digits, that we quarter. digits, in by up great is cosmetic and Just a gifting single Bees and and that innovation business. consumers. with gift special and grew we're packs strong Face lip behind core innovation care

of we in So drive certainly to terms new I'd business, products. say continue are where have opportunity the around to distribution we on

opportunity We the where she what and vicinity into that's consumer also stores in where call core have might getting we ubiquity, other have buying wide balm the can lip interested the lip whether a to business that, convenience stores in goes. everywhere we drive of driving it team be we that spaces dedicated drive or

and So and it a as lip, Burt's mostly in variety and have going having past so a out. is much masks as a we mask, good forward, innovation we factor the Bees on out. this maybe mentioned portfolio, we called do care coming have we have Mask clay of we of across The certainly hot out the more a we fact category also detoxifying well and have care, business but that coming where mask innovation feel focused we haven't But bit. a about in sheet have skin a face quite innovation. of

based creams do independent mist out dermatological now And been in our synthetic it testing a before. will to about, TV because new face as way. a there. And because can come that have care the we perform, claim we're resonates on as make excited back that this skincare out. time do a claim And first we importantly, make big a that's can on that with natural that haven't claim the we that's We for able products half, we well the facial and consumers

we we digits. along for effective in backup make noted Burt's double that And So that good the about making feel strong is well as today, that have business on international, we're Asia. really particular Bees. in And the with which up will international, pricing, progress is

this is continues domestically, So and to well the of potential we in the a and particular, the we're a interested as in we're of lot good we say like sustainable. and it's responsible And child staying business the growth as because here Bees what that's accretive company course of be on course its margin poster mean with to when profile business, Burt's internationally. we profitable and

Operator

Raymond James. comes Altobello Joe of from Next question

Joe Altobello

store sales So like Was greater lot that first sounds well? quarter. this there on the a Nutranext upside distribution of any saw and was same as gains. It you

Benno Dorer

break It's down, it hard to now. right

previously noted would perhaps year somewhere seeing trends. had it So for slightly now, we continues also fiscal stronger, and ahead I would on we’re good I feel the about up to obviously to are down. track, it Joe, Nutranext, rounding this But to track by trends are brands international. whereas now we call, Mass, the And round because rounding on -- Food we've integration call that key so be slightly we back right, the But in slightly were certainly where as of really improved versus and is Nutranext. innovate with November and strategic in Drug half, retailers our up we driven on we several is beginning performance seeing we're and wins the you've picked various on are of robust in also brands. distribution in business

capabilities So lives. feel we difference where product And are like focused company feel are can many good stay the that. in where great about think a making is. on in our that where really we driving we make here categories emerging difference this And business consumers their a and

it's trend early slightly So I perhaps to on ahead, just would to track too in call call it but yet. a discontinuity this

Joe Altobello

are what your in then your Thanks. last in there plans to think it's season merchandizing how increase they you’re relative growing about alpha are between? see penetration? And like excited load, And upcoming curious program. on But the expecting excited Are trade charcoal, I’m about they clear charcoal. Or about seems guys so retailers you as it to or is could which in QX? a we something year secondly

Benno Dorer

Again, we manage inventories pretty tightly.

that shopper Why business of is have baskets that’s barbecues that So usually consumers it, is business. drinks charcoal product that or things of meaningful is other that? interest the clearly, a whether occasion. that a name pretty because chips, charcoal or charcoal North significant basket so itself. the First and a shopping all, with excited retailers the it's whether of also in a But in an for is lot a potato retailers meat strong in about, $XXX, is by are nice you

retailers we're with meeting season interests to So retailers and have the lot a of discuss XXXX now.

a plans. We are for getting lot of support our

permitting weather So to XXXX I expect a season be Kingsford. grilling robust for

Operator

Your of Barclays. from Lauren comes Lieberman last question

Lauren Lieberman

hoping a talk discussed could well really, just numbers in is about was you its you little doing business and different because I really channels. bit some track quite litter, this of

been are us, could competitive activity what a as if think just there well. of leader I pricing you're -- you seeing you So in terms was curious with you've share I if one,

So is in curious then it also this performance? driving are it category. So the stronger where followed, how club, you've performance, some channels this e-commerce? Is And category of rational been that it total the is a look? just if

Benno Dorer

summer. quarter the pricing So first went obviously that last certainly with that executed another excellent, and pricing good in by Litter, business was with out

really to seeing see a In see say that for broad-based. competition we're and general, it's I to across us. too, happens. one within the non-track performance well. what not done retailers business to all same It’s of to support see in strong key This broad-based, just have strength be don't playing well we'll competition that the the just But our faster follow by pleased cost to And the We Clean that channels doing to Paws But the think really growing everybody have behind do I are Fresh so it's would clearly is out track Step, particular. very to this better board that takes continues yet. continues six have increases in but brand also than the months, in again, e-commerce competition. usually really signaling innovation. XX e-com that channels, we're drivers it follow, behind is we starts of else and businesses started

Lauren Lieberman

differential major bit a onerous? e-commerce Is would because probably shipping cost versus the brick be for litter, mortar a for and there margin

Benno Dorer

is it is good because the terrific true so single the is can difference. there's you more significant to efficient so focus use portfolio our same that as that is No, There of profitable the an think you to well. of growth, every way for overtime opportunity Also, and this because no Again, autopilots, one rest and particularly one day, we margin once growing conducive Lauren, opportunity. be a lock and being our a on emphasizing really the categories purchased is build growth same, where automatic hopefully repurchases it's about road. really as that business is on to reordering down more into able e-commerce litter product consumers effective the

Operator

This concludes Mr. like you. to I the turn session. to back program Dorer, the would now over question-and-answer

Benno Dorer

to quarter speaking when all look May good with Have today. you you all. a for And joining we Thank forward in results. Yes. us our third share I day

Operator

call. concludes conference This today's

may You now disconnect.

The Clorox Company (CLX) 4 Feb 192019 Q2 Earnings call transcript