CLX - Earnings call transcript Q4 2021

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Operator

Good day, ladies and gentlemen, and welcome to The Clorox Company Fourth Quarter and Fiscal Year 2021 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. I would now like to introduce your host for today’s call, Ms. of for President Clorox Vice Burhan, Investor The Relations Company. Lisah Ms. may begin. you Burhan,

Lisah Burhan

Thanks, for stay thank hope and Christy. everyone, Welcome, you your are well. you families joining continuing and to safe and We us.

we overall are some result. key the we Today, takeaways started, know present start will how making want let for changes to Before you get by that Linda we to our I providing year. some

results return highlights some then I’ll each well our segment. outlook with will fiscal we’ll finally, financial her Next, Kevin XXXX. address our and for of from as with our to as And, follow-up Q&A. perspective close year Linda offer will

few Now, before into go reminders results. a we

X call We’re or thecloroxcompany.com. replay may Internet website, statements differ from the statements, days Today’s current over discussion a results on contains for outcome. of but statements impact and are expected at the the broadcasting based related to management’s or forward-looking our call this These of COVID-XX. including potential available will actual be expectations

we including addition, and both and to non-GAAP identifies to financial with which section, directly the could website reconcile end non-GAAP financial the measures to may are comparable of GAAP that SEC. located today’s release, tables information factors certain filed refer most that statement forward-looking financial posted which section, non-GAAP such various our forward-looking been the the affect measures. statements on measures, earnings which the of Please the at is refer also In

I’ll it Linda. to Now, turn over

Linda Rendle

our for the we most, faced, rapid of in which Clorox, clarity imperatives, delivered I’d and delivered cost with confidence significant X% value With organic stack in through that’s long-term putting gross delivered significantly portfolio. segments. top the our a On XXXX has EPS Fiscal the before XXXX, strength reflected us, the across in reportable experienced larger strategic you products I supply portfolio consumer year will our decreased increase categories, of joining X-year tailwinds, reported in detail. cost we basis This look with the sales in QX, we pandemic to for in for When performance basis, Despite declines in Recognizing have at delivering ability resilience fiscal Fiscal for fiscal we growth XXX basis, shareholders. the the demand an in products, a rising to decrease of our work in Hello, of to changes brands of our shown year, the our growth. brands fiscal volatility, growth. what reinforce tirelessly consumers $X.XX. was people, creation which on to reported pressures, and we was long-term XXXX extraordinary us Lisa. on Thank complexities resulting as and than business every trusted well to in as a year QX our and we XXXX. I pandemic a X% continue we more Thank adjusted as including X% for our immediate matters and priorities a growth more have year With everyone. points profitable discuss before sales like fiscal particularly exposed of reflecting ultimate we test the was inflation, all you, X results. the margin, us. XX%

to priority across near-term higher opportunities. to accelerate strategy, industry we long-term in repeat global In our to penetration possible rates experienced the also highlighted The is the IGNITE significant demand significant elevated has market remains the result, pressure new future. mitigate with pandemic impact cost supported The by with investments be our users. headwinds areas our and amongst and the continuing uncertainty. additional agile improve consumers, continue top strong also and a environment share. The last As inflationary demonstrated capitalize existing of to as execution, months conditions, address and where strong in and dynamic, XX headwinds can household face strengthened have growth as position need of us on these help

improvements, company. will opportunities We enhance growth more shortly. stronger, driving us are investments discuss to resilient, and drive ahead and clear more on our our to capabilities the differentiate and and runways Clorox of build making a which includes productivity I profitable digital This

confident IGNITE will shareholder sales enable and are long-term long-term execution X% value. us X% deliver achieve that We strategy our target to strong to of our

our Before as Clorox QX world. year, well over teammates and for commitment and I’d around everything their communities serving world the the our our like accomplished strategy, against the to past as progress and around discuss I dedication to people thank they’ve

demand was of moderating magnitude a QX, acceleration a we lapped products, faster-than-expected as gross headwinds actions result led the we the the in year. last sales taking growth, address to the For move of faster-than-expected impact demand we’re assortment, broader value which on and headwinds. and product unprecedented this of discuss contraction cleaning margin reintroduction pandemic and inflationary shortly disinfecting The sales, these to for experienced had including of pronounced of supply, moderation, peak quarter’s improvements the packs. through I’ll

few IGNITE highlights share strategy. Now, progress of our a our on let me

cost long-term year, address focus target. First, with in and a fuel surpassing help the annual delivered brands, million we fiscal to $XXX ensure the elevated being of our pressures, savings pleased health in cost our over critical growth I’m

our made this we know halfway goal the million progress our Second, year. goal strong XXXX people, to crossing to on XXX fiscal mark

payouts, one to confidence contributors been in and in investment to has strong led improved investments driving significantly higher our brands. continued increasingly the our of personalization It ROI. Our has

our expect XXXX. to Third, XXXX. with products which strategy, heart our we in contributor the of fiscal our were innovation at continue innovation fiscal top-line, new in we doubled to a bigger investments And

represents last our XX% consumers total of e-commerce business as marketing in the nearly pandemic, resulting digital digital today we into commerce, increased the have Next, sales. doubling company their during which years, in about usage leaned and X

continue make our we on to Finally, ESG progress goals.

we operations, value-based emissions that in during to and Target our engagement this And continue XXX in rate pleased our achieved average. incident Based at submitted top safety best in than to continue our significantly industry of lower we the the X.X on our score X have XXXX, Targets culture. Fortune I’m quartile company, recorded trying high to year, With also a climate commitment Based we putting to our of we for example, of recordable For that fiscal and I’m teammates, the action the proud Initiative our Science XX%, us a employee Scope June. of history. focus as proposal companies. X.XX, advanced Science and inclusive wellbeing people-centric on particularly

Now, to let turn me fiscal XXXX.

demand as lap expect pressure half persist in COVID-XX-related of with continued along We the surges to XXXX. fiscal we first moderating demand inflationary

expect accelerated with by sales While about will and and we’re dynamically cleaning margin. of on food, QX, the categories target. implemented and of we rebuilding we and this experiencing our represents laser-focus is announced This in second transportation this the Glad and industry a costs across our portfolio, pricing We which since on international businesses. outlook, are reflected managing in input year, holistically discuss, the on and XX% our be in which actions our all our the significant have portfolio. in half our of lower Kevin fiscal Like end within others beyond, to XXXX long-term of range increases

confident additional feel we’re pricing our pursuing right parts of also on the the partners, which about strength constructive ability execute our pricing communicate time. We’re the conversations with we our brands, of to at portfolio, our importantly, retail in plans. Based we’ll having and our

drive our to cost we In hallmark program. continue addition, will savings

growth through with We expansion improvements fiscal sequential expect for we as margin margin progress gross our QX. by XXXX, assumption

some these our due of of market saw made out recognize is in market to manufacturing to latest market case our the notable investments lines trash. and we our we the have to supply priorities, the have discussed external headwinds, our we rooted pandemic. With to share And rate June production our IGNITE experienced Certainly, in X capacity, in pleased drive businesses. in achieved time. in share, gains adjusted internal In we on Glad long-term parts strategy, data near-term declines focused share aspirations. X fill see progress. remain has work highest portfolio, challenges, Despite a over as improvements XX, terms more we’ve that ending production XX-week of additional growth of in team, the including and of significant strong July deliver previously, there do start since to we I’m as plans expansion we long-term such but our

position, at the brought year, home, that and Prior more The including perspective. enhance revert our of transformation urgency insights through focus of our from wellness supply complete, data Clorox enhance to transformation investments behaviors XX in While well capabilities business our the with replacing our brand believe This to in ways. portfolio, to was e-commerce ERP. innovation business the increased the revealed I already longer-term, building health, efforts. meet extensive X and e-commerce as may marketing behaviors better own digital $XXX to commerce, over our consumers Chau were With to also to Officer, continue chain in digital been a Last are of underway and years digital next Chief over program already digital that shift we and Clorox platforms. some million digital across upgrade We’ll the our more fresh to yield Clorox will needs, before there’s Information in to continue conduct and pandemic. digital a and support pandemic Enterprise assessment who infrastructure improvements, experience has in now hygiene, Banks, our time productivity pandemic, and driven we planned accelerating months, and on to differentiate efficiencies, engage Analytics next to invest digital a that capabilities. we advantage about drive our will adapting a including adoption assessment customer our as relevant leveraging pandemic-related driven

Tony to me last XX to has companies, value. leading more Growth October. focus area consumer key we than innovation our Tony be who a Moving experience of delivering joined multi-year continues with and Chief brand years new stickier for innovation, building innovation Officer, have Matta, ensuring

such product Clean driving and Step new as grow. to which Fresh We’re continue lasting Paws platforms, Scentiva,

streams. innovation revenue create addition, external to by we’re extending new In partners leveraging

margin ROI build brands, high to with consumer our loyalty. and support disciplined, especially to and continuing advertising investments strengthen accretive sales We’re promotion innovation

brand. focused also global build to growth disinfecting runways cleaning and a Clorox on We into our remain very driving

meaningful every We making continue between value and as of to decision long-term are we to growth turn still drive all on a ESG in commitments we believe to initiatives, day. multi-year over and our that, will review longer-term. these execute a our early unit can live impact I’ll keep to become With call link we to in contributor societal And strategic center continue Lisah as they and the stages the our our creation, the business journey, purpose performance. front but our

Lisah Burhan

Thank Linda. you,

growth In On grew were by year double-digits cleaning turning In year QX all across Now and our to basis, deceleration segment half primarily front due X% businesses. strong demand behind up products. cleaning a sales Health performance. double-digit for grew sales a year disinfecting stack in sales decreased the XX% the growth ago Wellness, XX% of XX%. and sales sales cleaning, sales grew the to quarter, year across On two-year down were a while QX various with quarter, full full results. full and compared basis, to

higher repeat demand fell new faster it strong buyers. was While remains it among anticipated, pre-pandemic than rates than with

assortment our is share wipes which and supply almost in are fully market sprays. and in reflected product especially our restored, Importantly, improvements,

more value forms As to and consumer preferred packs. migrated demand

mix, we We also saw negative over the quarters. price continue next to to which expect few a impact

the experienced on we professional period forward, be in strengthening double-digit ago by we’ll for were Sales especially down versus merchandising Going growth. double-digits products back-to-school activities, year period. focused our when

levels, unprecedented as customers we T-XXX the sales area will year, double-digits, sprayers. through electrostatic Demand into moderating volatile a were inventory periods product in by performance. expect QX up front professional fueled of high with to especially full short-term, demand. work to company. strategic the continues lap be In For QX, as started an half Longer-term, continued exceptional continue the by this business results we Clorox for be growth and

partnerships, our of new live we part company. events Live expand to our initiative leading including of continue add to the As Nation, out-of-home into world’s to roster channels,

quarter within after segment, our supplements increased double-digit Lastly, decrease supply minerals disruption this by and vitamins, Wellness related Health a and COVID-XX. by a double-digits the business lapping caused

food, full drug strong the well. were For and as the the sales driven for Sales and year, quarter channel up growth e-commerce. in mass by performance was a

were two-year sales sales grew double-digit QX segment, grew quarter, sales basis, Household QX in growth across by was down year the X%. decreased and stockpiling. X% XX%. the all to initial Full in businesses. stack XX% a Turning impacted double-digits grew full sales growth with QX strong X year On by sales which year-ago lapping Glad

For sales were up. the full year,

going forward, share. after facing. still work we in as we’re demand to focus headwinds in strong double-digits inflationary growth. Linda market double-digits strong restore Grilling this efforts QX the started sales to Our mentioned, quarters our on And managing business by moderating do have decreased as of X consecutive more

For grew the full by by consumption year, very sales fueled double-digits, overall. strong

This retailers they’re Labor expanding XXX% our continued success, initial the products spices pellets intended Cat nationwide will millennials, Kingsford with select other our flavors grilling gear on healthy before grew by Day of sales as with Litter consumption real introducing XXXX continue launch, driven season. business innovation available by QX, continued the among building made is innovation Our building multicultural latest distribution help growers. double-digits focus while in that a up strong we in on to be for also consumption. and signature

year, time record and pandemic. grew. Step Fresh with the the brand for overall category during by full reflected first strengthen becoming litter e-commerce the one positive sales The online trends the For results number boosted pet adoptions also

extended grew On basis, our sales Going grew thanks XX% Despite in is innovation sales grew business year. an year QX, litter, as sales full now of stack moderate Lifestyle were supply are consumption. year and Step which of demand fundamentals Full In sales XX%. were the down top two-year QX longer excited continued from pending lasts than about and litter, Brita latest X% period restored. growth double-digit on that regular down year our forward, XX% technology. sales elevated deceleration segment, to we’re strong, the full mostly Outstretch to our grew prior especially in patent X%. sales a Fresh

was put double-digit the were as and the year, of began bottle on overall college improved. in sales consumption Valley down growth consumption to merchandising strong in mandate are business largest the this of event growing mobility we primarily and household Full to The including due sales down program penetration. The about strong brand. moderating Burt’s this Full were Bees market Hidden double-digits, share shipments recover. consumer excited impacted with by fundamentals back with business top as was as We’re increased measures. dressings, year. consumer place ever up consumption lower for to prior year for sales the Ranch double-digit category quarter food this by the brand mask year category negatively store closures, by stay-at-home

with build supported shopping recover lips pre-pandemic begin momentum We as pipeline. to keeps continue business expect that on patterns people to consumer and strong to this innovation their improving. We’ll returning campaign love our mobility to new by

our in we supply period, consumption was X as developed our across elevated we increases benefit in top QX to well wipes elevated stages international, the to of wipes in international of markets. results year-ago our turning the The chain expand of grew and to Extended portfolio growth of existing launching the when in of Lastly, on Canada early price during in Clorox lower the acquisition shipments building a due the continue disinfecting decrease countries JV progress our consumption. moderating the after reflecting contributed offset dedicated business new to sales that period partially shipments. lockdowns also demand in combined pandemic, Saudi XX% X% making global saw disinfecting the importantly, impact as on months expert by

the grew year For growth for a XX% grew two-year year strong full moderating On majority before full the QX of QX. and reflecting very basis, stack sales XX% in sales increased year, the XX%. sales

financial it who XXXX I’ll will year for XXXX. for as as to QX over Now, Kevin, our discuss turn full FY outlook and results well FY

Kevin Jacobsen

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

growth outlook. sales year. this sales on we X% XXXX, another our we year X% Well, delivering about for good growth delivered We than of XXXX. feel anticipated is in lower As strong year fiscal Linda sales fiscal mentioned, top in

continue extremely cost to margins we manage impacted earnings. year course, to environment, and our fiscal which an Of challenging

billion, cash came another cash XXXX. $X.X our record strong which our $X.X a year delivered in versus to year representing of allowed I’m in flow and return program, repurchase return billion fiscal pleased shareholders compared XXXX. to we almost Importantly, increase to share year $X.X about for billion strong flow, us fiscal XX% at cash our through shareholders to dividend of an

Before review I charge to products our results, professional our QX QX in to related booked supplier highlight a business. we third-party non-cash million for a wanted $XX

shared pandemic, in with of previously, third-party have the the addressing us of worked unprecedented the number in we spaces. suppliers during As consumer professional and a to height support we demand

result, note, EPS We’re it quarter. reducing took these as is on in fourth our a EPS, from this QX the adjusted excluded reported a of included charge charge item. and as a represents one suppliers. And non-reoccurring reliance to our our in we Important non-cash

our quarter in delivering fourth the comparison stack quarter XX% quarter, XX% to two-year year-ago to results, a decreased of sales growth. in fourth Turning X% sales increase a

lower improvements Our primarily organic reflected and Wellness an sales broader our On had moderated fourth as value result price products unfavorable previously packs. and primarily declined organic our than demand a sales supply including segment, the of we expected Health basis, assortment, segment, XX%. mix as results product X% anticipated. reintroduction and two-points and volume in of in rapidly disinfecting decline quarter cleaning quarter for Health were more in Fourth sales than Wellness

change quarter ago input lower manufacturing points sales. decreased quarter. margin as costs headwinds XX.X% XX.X% costs moderate, to about cleaning anticipated, lower well commodity as of margin pleased largely the and The QX continues was see primarily we XXX results driving supply. margin XXX basis ability as year lower were lower than higher driven costs, points by our basis as well share significant driven Gross a to in of resulting the category fixed in transportation disinfecting increased and of unfavorable compared to costs year-over-year to in While points improving XXX increased the cost by gross higher points as for we’re absorption Gross XXX sales, basis basis to mix.

of about consumers. benefit gross came offset basis XX.X% sales. Selling from in fourth charges in compared year also investment non-cash a XX actions of international as administrative were building points These at and continued supporting from margin Strong and in basis negative a program the savings, XX sales about XX% includes points pricing quarter. the XX.X% impact XX spending levels about headwinds sales basis by of Our on about XX% half sales of our points percentage just expenses, our to QX mentioned. quarter among margin of and percentage in partially came cost of in reflected new at ago our back and innovation at U.S. as investments with loyalty focus promotion Advertising division. our

effective by by year all decline share as versus rate year adjustments. favorable offset for income driven came $X.XX decision, of foreign of was subsidiary, X%, adjusted XX%. was effective pre-tax On return a book in with quarter this a our the these factors, earnings $X.XX ago well to fourth quarter Net tax charge provision was in per the mostly quarter, basis, tax fourth of from full as which XX%. at tax a the primarily benefit rate exiting small a associated took Our we to

Before the me strategic Linda let discussed. the details on provide I of investment, our perspective review outlook,

our on EPS, the into adjusted our better and fiscal including invest about In years impacting remainder over in invest that next provide $XXX million capital going to operating the of performance XXXX, of planning underlying balance QX will forward, drive improvement, and capabilities investment ERP. plan exclude our $XX replacement of about our we through enhance P&L, and insights portion year our productivity $XXX business. sheet. million to with X operating million digital the about expenditures We’re P&L $XX million in to and our Beginning reflected to the our flows our the

year. to our turning XXXX be primarily reflecting the fiscal Now, in X% of in year We and year our demand anticipate ongoing products half outlook. sales disinfecting fiscal down X%, to to cleaning fiscal the moderation, front

mix, spending, pricing Organic will environment. our In move be trade down addition more taking as we’re sales be higher actions X% a the X% portfolio. unfavorable We supply partially to to to to promotional factors as across normalized assume well. the and are broadly and offset these we expected by

low-double-digits the to expect We the XX% lapped front-half this during height of the high-single front-half growth XXXX of sales year as pandemic. to decline we in

QX we decline low-double-digits. Additionally, sales to expect

to targets. of half our the the As back return long-term to year, growth we the we move to lower-end sales expect of

impact down in gross assumption We XXX due a nearly year-over-year to XXX course, elevated our ongoing continue environment, which significant our from to could costs, and dynamic represent operate year anticipate for Of commodity uncertain to we to outlook. which headwinds in increases. and basis be points, fiscal transportation cost margin million $XXX

We increases be the XXX pronounced more gross basis to by margin of cost as commodity to expect QX basis QX, margin X,XXX assumption key we front-half expect these our points, gross decline about for driving particularly the points. reduce in X,XXX to to headwinds in year,

lapping quarter. growth points in leverage of For on a sales XX% operating the over perspective, reflecting XXX we’re QX basis year-ago of modern gross favorable XX%, margin in record

inflation in fiscal begin XXXX, moderate. course actions for the with margin fully in gross our from will assumption gross flow the mentioned of on is to release, sequential our we benefits assumption more press margin As improvement P&L. And that over we’ll expect for This see through then, cost QX. we expansion based year our the mitigating

investment our to year capabilities. about enhance fiscal administrative impact about related be sales, expenses We which point selling and XX% digital of our to X of includes to expect

brands fiscal be our to reflecting behind share. invest build of spending we ongoing about advertising Additionally, and sales, XX% to year market anticipate our commitment

in factors, expect adjusted $X.XX between fiscal year-over-year onetime to XX%. of year XX% about EPS to the fiscal $X.XX. Net to prior our fiscal The tax be rate to year year. we benefits We these several increase primarily anticipate be lapping reflects

fiscal cost XXXX, to start throughout to priority year both from I’d elevated fiscal like emphasize we the pressures, address commodities and our transportation year. As

focused price actions pricing This businesses. We and about the on bags represents Food, pricing taking executing Cleaning portfolio. our increase on wraps, International today. of on implemented our are We’ve XX% are our announced we and and our discussed

We’re later at also which announce date. a we’ll portfolio, our pursuing pricing of parts additional and

early, While constructive with with we ability an in addressing the it’s and with Consistent are confident of head we’re having still price, headwinds our our our to given of long-term IGNITE on, the health conversations our strategy, short-term we’re brand, strength retailers. eye on the business.

invest We superior our meaningful will drive brands, continue innovation help will us to to which value. drive including to in continue differentiation, consumer

are in our improve productivity and investments finally, business future. mentioned, digital our before ongoing for brand we’re the our engagement help is our drive pandemic as activities. and larger innovation the significantly to pressures. And lower efforts increased we’re chain, than We well initiatives and supply Linda and cost positioned leaning into capabilities, And, transformation, accelerating address costs cost-savings to our program across

trusted ourselves of relevant make trends is more most see. And changing we of portfolio positioning global the Our ever. to we’re consumer brands than the

to have We and it in our with execute, to to turn ability that, I’ll for to over to value Linda. continue plans shareholders. us our back create long-term confidence And enable our strategic

Linda Rendle

Thank you, Kevin.

long-term Before fueled confidence potential, line wanted which to our take by the commitment for to and is to Clorox’ we in a open IGNITE reiterate value-creation strategy. I and our questions, growth moment

addressing conditions, improving dynamic including We’re share. strong face the market cost focused and significant on headwinds in of execution

line differentiate and clarity open addition, profitable imperative you strategy, build a the accelerate to mandate stronger, and that our performance. on more may questions. we’ll confident In more Clorox And and now improved strategic executional company. we’re drive the for IGNITE Christy, have as we execute resilient, and we

Operator

Instructions] is And question Mohsenian Morgan Dara Ms. Stanley. you, from first Rendle. of [Operator Thank your

Dara Mohsenian

Hey, guys.

X why $XXX program the you just heard So investment us a necessary million now? give first digital and is We’ve for the better on the guys, productivity, happy been sense questions, just last competition program could you’re couple working from e-commerce years. and of historically of in the side on with the the innovation IGNITE We’ve progress. you curve ahead that heard strategy has on

Chau Linda, focused So there I’m Bank’s you before But areas were sure was also. sounds a when like took over review these obviously, on and you appointment.

it’s and back a assuming particularly was large at spending to And we necessary as goals? then, So, come it the then, at some How can back. what’s big on to have get second in theory, about I this yield I’m develop, did prior if this payback a think help such it’s point, long-term this to payback, I given gross more return long-term is program can above sometimes point, a goals amount? that to surprise? prior margins beyond goals. also Thanks. a question And

Linda Rendle

you. Thank Dara. Sure,

with and don’t movement seen that of have and that our why data tailwind period, certainly, to is as period. that value digital was and And consumer information we why to come online at out the rapid move momentum accelerated consumer this the underscored better us take both been absolutely help you’ll I haven’t we our to And we as But our see pandemic had contemplated that key not we us comes beyond. real-time we ensure So place, towards start never our it the will this a sufficient strategy maintaining a penned consumers, really is, that in as that we that consumer type urgency certainly step exposed need during and in of that the question, upgrade about space, volatility your digital we’ve would what e-commerce first to necessary that strategy. really of think customer the is, entire operation. now? infrastructure This IGNITE and access move after And marketing what’s deliver strategy. program in a allow and look that across serve about in consumption such so we us the to entire we XXXX, has to and clear really today, behaviors space, of needs. saw I strategy forward, IGNITE clear way for then for past, capabilities. the knew the And challenges our will and a we XXXX we in efficiently the is look by is in make other back what the bulk and And to managing note the we year this operation fiscal IGNITE want thing as more I

planning. and we’ll with which in to you have of chain is procurement all digital will will and us capabilities. more goal, our the further enhance We’ll e-commerce the already out changes. on that of and parts supply that needed do personalization, real will build investment and our foundation we’ve work these of the to enhance And innovation. chain first referenced, and So visibility supply further time help done get these and and It across of ERP, on make ability better improve infrastructure that’s like which supply all things digital that data, accelerated

have what a and circumstances is pandemic, company So really, a about stronger rapid behavior this about period. strategy the really coming before this with change in was change And building was in. out predicted more couldn’t been the environment, in momentum that the consumer we’re the leaning of and

Dara Mohsenian

the X-year then obviously and should terms record the then, bit magnitude when gross about think little probably how of for margin a lot compression. could margins, Kevin, yield over in amount that over And And second, include of Okay. on a you’re fiscal you period, about depression of time? gross from you we timing a just talk this, XXXX, experiencing guidance

your understand less versus and of to is on these pricing seen in what the trying like past than It the just focus I’m pressure. we’ve unprecedented cost seems timing the pricing. So magnitude

it and perspective? sort of pricing environment competitive pressure like why offset a the to we’re So those more greater seeing gross How points of seeing Is of do you Are with more understand was why I to not difficult more pressure of pressures your seeing retailer through us this we’re some an or other margin? just want we’re understand there Is in cost – peers? think a unexpected? about not some from pricing. help offset outsized of

Kevin Jacobsen

XX%, about was XX.X%. our margin If for let think margin. gross share thanks the below our about Dara, gross on where me Yeah, question. we before And perspective I pandemic, were the just

before below the ended year so began. As about XX.X%, pandemic we where the of this through just we moved little a pandemic last couple years, over we the were

both about of inflation. facing prepared we’re describing in in cost As as are we talked I as forward, we environment our go Linda what and terms remarks, unprecedented

we’re perspective, year point Just, about to before, and $XXX of hit I cost year. a this million mentioned as experience, think basis increases this margin commodities going XXX we Dara, to both That’s about for gross transportation. between

announce based at of actions later from can with we just And we’ve the of we’re think taking. expect beyond cost this pricing increase year pricing then, date. offset those on the offset actions the more taking, to fully about Now, we’re the phasing a forward. fiscal we plus announced XXXX, But extend the we’ll these X/Xrds year, we that’ll actions going

X spending. other these. feel they’ll trade There as XXXX. we’ll I aware And longer a to well temporary during as But so, little items, as fiscal recover it relates We in you be the year confident take other point think to And our are mix, items. benefit of, out pandemic a margin then the Dara, beyond as had XXXX. about I’d

many think lack our you because I is there of supply. categories, very of promotional know, for activity, As limited of

back we is that a that expect normalized environment. get to expect reverse to promotional temporary more as out We and

an year because And canisters, pandemic we we of hit then, XXXX, about ran example XX higher get most run So on the out why, production, when to and rationalized mix, expect bps as from also headwind think our much I we product trade about try we as count could on possible, fiscal those. XX of spending.

introduced consumption will and well. come larger good introduced as in lower trial, sizes, as for very a that as we we which multi-packs, is margin As

back that more a get negative, skew of positive turn mix level offerings. as we into see normal you’ll So

basis point And about XXX that’s so, we’re in see hit, another going to XXXX.

Now, expect both those And temporary get normalized of the back they will unwind. year of that as unwind we this are and pandemic to a benefits level. more to result

of increases the our cost the year. I highlighted, you as in expect about expect you low rebuilding of move When costs some – and began. improvements going half. that pandemic is we’re environment margins, year biggest through challenge you the ours think we’re to the the margin to half think where we in see front these And important And I as then, to so, QX we gross the you’ll turn expansion. XX% back in should the those sequential and to see start margins we committed think front of cost the we recovering our about And to what’s the get back back phasing and we I before XX%s. it of year, go the face were take to we about through

follow-ups. there me take Let happy to any stop and

Dara Mohsenian

gross almost it Yeah, And longer lot pricing, expecting in it’s next you just on get we’re year. than of previously. like not it QX the of basis positive QX, seem has year-over-year of compression does margins until to timing Obviously, a taking X,XXX points.

be other specifically taking But like mix understand the does your pricing curious period in, long issues around are thoughts, you I’d to seem there history. mentioned. and of issues it pricing offset. get the So I a like it’s of for time to some relative

to So that. just trying understand

Linda Rendle

more were rest Clearly, we And ready announced going behind needed. with we’re and the shortly. the about will future. the related that hold we is made possibly resin. portfolio one take through demand was as we that in timing And priority as is were in number QX. that XX% was And are our of to the to, of the we really to work be we to the plans that additional around the could. could. it go pandemic. beginning headed priority the seeing the lever that And pricing commitment we to we what pricing as date and continued at communicate immediate coming much as which in possibly Glad, details to on of to But to continue will as We Yeah, about price need to absolute of call given much across the meeting scenes made pull continue supply to we as demand fast doing our priority to up market that

Dara Mohsenian

Great. guys. Thanks,

Operator

Thank you.

Peter from Grom is question Next of UBS.

Peter Grom

Hey, hey, good afternoon, everyone.

So investors conservatism there the point. parts conservative, this embedded trends in term the or being and bar, kind know think are my use here. a you’ve question are I is the whatever of to flex from just I you the company really prudent, a lowering more asking, at lot moving the But lot guidance on of deteriorate that even of is if want I on is guidance to there in I operating would achievable? this sure call here, rise And is consumer rebase environment fall here? seen what necessarily think I’m this still guidance, the flex demand in not view know range your it a I is inflation versus this be from we’ve or very much helpful will the more past. But how should get Thanks. different.

Kevin Jacobsen

what question. you is for I’d balanced. conservative. as I I don’t the Peter, view Hey, this our outlook, this is Kevin. On view this as say Thank

know, virus we in as folks think as the unprecedented an consumer I of you volatility, think demand, macroeconomy the environment operating out. as, play well all to changing going you about are is how the

half in back normalized level so And then, of and operating would last bit continue. XX And to part recognize, a start I the to and environment. better certainly out we front we’ll the for true get been half this expect that our more is say we we’ve see hope the the environment in it XXXX. of months to that’s

to volatility in The a to of try should range outlook bit the in forecast today. based account variability just as a you our expect normally think so, have. we’re And on for I a we seeing what is, time But prudent of the provide provide year. we the Peter, recognize we describe front level would everything balanced than half. this would way, of wider And we ongoing at that this that’s we

Peter Grom

then, does maybe QX? Dara’s that gross a mean you about model And clarification be expect to question. margins don’t question thinking to Okay, super of make your Returning QX, quickly, Dara’s I XX% sure to I’m that just just in helpful. point correctly? to a about on until want just that or the response XX% in

Kevin Jacobsen

Sure.

say margins then, to into going not I move more by move margin So, XXXX. fourth what providing Peter, would improvements expect basis about got to of and the in mentioned remarks, we fully the And the as out we over I points, primarily XX%s. quarter, in the year. forward that course cost margin, our the With we I’m we’ve as is, fourth talk expect X,XXX we way moment. X,XXX by about then, we we’re while the margins years, prepared we’ll XXXX an back And envisioning the through the QX outlook in expect low to expand fiscal by growth. into on this turn to sequential environment. my driven And down we quarter, expect I’ll playing expectation continue year as today, a be

Peter Grom

Okay, Thank luck. of great. Best you. Super helpful.

Kevin Jacobsen

you. Thank

Operator

you. Thank

of Citi. question Nicholson Next Wendy from is

Wendy Nicholson

a Hi, couple questions. of

margin a for the XX XX structural business, then, aside for your this near-term, spending. seem years raising gross time covered you’re I’ve commodity XXXX stepping of period be to stuff that totally But there peers? prices, all, find I to I And question, First we’re is back the with the not mean, promotional the allocation, mentioned investments, years step COVID. the commitment prices. when investing here, leverage potentially, great. support think promotional still ERP something low I I literally kind go a a when I made the I really gross you money not to And got of for back and spending buy get weird amount for that’s this your what’s XX% And spending compared on from know But you’re with raise new your begs it of in back digital of have you’ve stock stock in company. margin, the in to guidance Linda, to like and inflation. and does so kind is expectation you think in capital to the higher and mean, much because also I

long the gross me. you the your this margin just margin where a low-XX%s or margin we’re positioned?” gross line. be gross Sorry year into And, a temporary over-earning a we is to is of and may seems crazy CEO, this of right but normally sort sort think do the even question, guidance on really So XX% for sort really as for the a more high-XX%s mid-XX%s the is job of, Or is blip? “Hey, new number

Linda Rendle

question. the question, capital Sure, to Kevin allocation to it second over with the more first then about Wendy. bit I’ll I’ll talk your of start on part hand a

seeing sales growth, what’s it, a to and environment. leverage. the and really things and you like factors absolutely storm, term contributing it’s the perfect our lapping this it’s little an look we’re combined, where margin, you extraordinary incredible I said if at what hate all we’re but gross bit, So And operating

would think, the innovation. into that argue that the but have build those environment marketplace, put we’re for investment, in just are back consumers seeing coming to cost strategic. levels down. we And dollars. a perspective, it’s innovation course, an to trial, at issue, that’s And Clorox broadly like support promotional problem. We’ve system money helps industry with which, us expose that ensure we then, our top-line of future. certainly to I able the promotional it important record-setting We it just to from And not dollars, and it continue want in a do as like to things going we’re to us we levels marketing viewed lapping helps our why I being always us it’s are be And the

one. what So that like execute, but an And news good albeit once. extraordinary at This going discipline. is I managed happening And that is this temporary it that not do managing to all happened me think go past. like in with a certainly leads do environments to we’re over the this for this What albeit is, natural of to the issue. And have is we’ve is we’re us issue, and time. and we deep, that is work just

pick we’ve We’re you’re pricing as as come more supply take up starts going pricing, us from and to now to spoken improved it much going about. and see we’ve to

continued the execute it. margins. are just this And day cost spoke right confident that’s ability get machine improvement issue. a to as that those to focused this Again, And take year. to about, and a we’ll We’re through Kevin team every work to fiscal in savings view to they and what going what But But back to temporary put move system. time it day costs our back to now. at do feel mandate QX going on to any as not single our improvement happen XXXX. one and get in possible It’s I we see our the we are to we’re in remove going with

Kevin Jacobsen

base that capital in I’d to we’re first I And, is today. you, of our continue priorities Linda digital capital. change our spoke And invest allocation, how you Wendy, business. there terms on investments. and will tell to our that no going allocate in priority our as about in includes know, Both And our

base And network, well wipes so, year, we as our on in think in investments up if supply our brand within ramped business, you increasing focused investing primarily where investing about building, innovation, capacity. we as both were our in production in last investing increasing capacity

going see in we to move deploy suspect this in ways the investments operate, And base shareholders. sheet, the as our we $X.X this of look then And our more fiscal $XX normalized way you And closer into sheet. an over that gotten we X% you as of also if years. to $XX XX% our The year, so, think will to share to of $XXX sales million should we’re the amount business, then, year a our look it highlight, pandemic, And in through we XXXX, of playing P&L, if we you of million $XXX between see excess with somewhere profitability us the annual about million have flow flowing about investment. will last return billion. dividend through our facilities, recent dividend about the generated invest and top to will we almost range returned our is of puts reduced and we our I Last back third our for about and return million of X% out balance year. announced this year we’ll X% program, because about cash little towards our technology typically $XXX cost you this continue million, XX% that should X balance through now peer of cash flow and increase buyback over tremendous challenging those expect increase But through cash. at of average and capital a I’d specifically XXXX, of some invest group. spending certain down our we through after with I we’ll program. between that in deploy And will the we’ve capital June, return and environment, year, our amount fiscal in

and shareholders. that have So returning we’ve us high excess operated should do fairly cash expect going to peer And to continually I think set forward. we to our our level committed you than

Wendy Nicholson

the line? what’s payback And for I that’s should mean, this we great. Okay, timing it, of on investment start digital bottom sort worth just that? was to see investment, when will, the if whether you

Kevin Jacobsen

Yeah, thanks Wendy, question. that for

this really So is future. our an investment in setting

of in is You’ll our term. start be prepared setting long it. company the to tail-end about the to see this But late some of to towards IGNITE up that over payback the succeed strategy really

And million the so years. we’ll invest over X next the $XXX

on folks get progress return generating our as IGNITE. beyond an see on investment. period, and starting late and we our returns that IGNITE You is accelerating exactly the we’ll XXXX, our or both to in our then, investment XXXX. update Wendy, late investments we’re really then, starting commitment continue And And should

Wendy Nicholson

color. the Great. Thank for so you much

Kevin Jacobsen

Thank you, Wendy.

Operator

Thank you.

is question Wells Chris Fargo Carey, next from Your of Securities.

Christopher Carey

everyone. Hi,

Kevin Jacobsen

Chris. Hi,

Christopher Carey

we that tough your I’m Health trajectory business half. playing curious, million the businesses, normalizing. about first period, question course, to below pretty made understand, grow underlying in And trying of spending time. played you difficult is in on of the Health getting have developing is run-rate, and the quarter kind and out this from business Wellness? business see But out trajectory also of, think in Grilling has really are over business or something I could comps, business And, conscious, is And, this Wellness But that and from What the well, of Health to be comps Wellness has want that time the a some get just could timeline of which Household stock like sense of guess, quick have kind that’s whether where back a the whether I some year? just as need stack the I’m thoughts improvement to that there. in of and What back or some professional, about for in you business of see that you And your follow-up. that $XXX on the going suggest I first pricing? today. to thinking over that I as of would promotional half just normalizing the comments basis a quarter. envelope your Household guess, math I’m you And the your then, to if correctly? that

Linda Rendle

Chris, start Sure, I’ll with Cleaning.

to continues that a evidence given in that were absolutely the that absolutely behavior time I the support is for believe volatility. things we a long-term. X the beginning. And be think that But would cleaning, of this the there this We case. at dynamic is said all that consumer change was

So X-year stack today, if we you up, just very the some got vaccination we decelerate than you picked are at strong growth. at it see consumption even until to of as did faster still look expected, point we a though numbers, the of least rates

XX% for versus XX% But that So consumption, you at level. in in QX, was over XX% the look that’s been pre-pandemic if up cleaning our to business. from range also,

seeing we are with So behavior sticky that be really consumers.

incredible in pandemic. the couldn’t those course, in growth Of businesses, supply early we’re that demand frankly, we lapping and

we will we of cetera. as long-term provide target this this that. opportunity confidence a that season, we of rate flu will still continue, Delta moving where to continued So and profitable said, as be think, et talked And grow exactly, cold net run And, what normalization, a moving is we to But And but there’s forward. raising I the ourselves is X to trend unknown, will that a that seeing accelerate about we to unknown. you’re is us forward. can certainly a an significantly higher unknowns have lot off is X, expect portion and a growth. that out

algorithm, would to cleaning and lap the disinfecting, as say, confidence there. look for business. I we household our we though, half, and to versus growth to is results the start as for company, expect get overall first deliver disinfecting, to lap household period. continue accelerated to that. as we So and the cleaning the for won’t positively both Again, We in XX% our sales half and when back business seeing sales low and of But our and that we contributing end

Christopher Carey

I thank you you quick Kevin, have that. follow-up. have – Yeah, did just something Okay. a for

the is much. and what in exactly just margin but model. volume quite expand quarter, low, improved? thinking occurring and, in be on was on, it trajectory, perhaps, the that on can you fiscal XXXX obviously, and Wellness so about we that’s And to dynamics be how appreciate, I And was well why deleveraging, Thanks Just mix margin below Health they’re there business? any a our going the should into going perspective

Kevin Jacobsen

QX that in as The Health won’t of margin. also lapping as Wellness number, year-over-year big well a on continue are supplier And non-cash keep the I PPD margin about relates and relates points as XX was we year, forward. then That it items. Yeah, with took as in lapping prior dealing to that a Wellness it segment, growth one XX% as to our segment, and few going costs. and we’re charge impacted we’re that increased so terms in we a a mind, Chris, mentioned, would was our highlight I is, Health

to So, back goes talking I we’re about. think, what it

be we very we’re with to in going this we short-term, challenging continue and that pressure very near-term, cost to a think margins. environment But near-term have able back to margins. confidence is We’re dealing then is that’s of and do a half going XXXX. it fiscal to to we on get year into going the to expand But challenge margins we the into as very in have tremendous recognize XXXX,

XXXX. see fourth and in in of that saw half the fiscal first the You that you’ll year quarter,

Christopher Carey

so Okay. much. Thanks

Operator

you. Thank

Your of Jason English Sachs. is next question from Goldman

Jason English

good are. I depending or quick questions. folks, morning, where good of you couple guess, Hey, afternoon, A

of conversion flow guidance? not, you’ve free XX%. on flow, quick can to have there you flow this given real sales free First, got XX% And percentage as a cash If out cash target you? cash

ratio? ratio away As should from lower things, expect for that gap start you move that of to and lower you that migrate to we excluding end or

Kevin Jacobsen

to Yeah. target. well done target you on Jason, our that very rightfully flow, against is cash said, as XX%. XX% We’ve

say a We delivered of the of pandemic, in ended you strong we’re expect, XXXX, If a on range. we as given good at year, XXXX, be cash XX.X%. the end year look sales. percent year at to height environment, this up I the fiscal the year that at over we’ve fiscal of flow, little challenges in had cost going a terms would the of XX% I low bit

that’s closer forward. we confidence if to not a below have tremendous XX%, to So XX% cost of XX% I that deliver But continue slightly that Long-term, reflection the going think really more environment. we that. challenging to

Jason English

for Thank helpful. you. know particularly pleased share And, Linda, we I look with progress, if you’re cleaning market That’s the but segment. your at levels, versus it pre-COVID

were to to first price restore before – of in gaps or July gotten to here we with like and through is reason you push to cleaning multipurpose the start retailers? and, reset months. worse spray it’s You’re really at on so look pricing like to more pre-COVID, Is that Or multipurpose is you Is to pricing sort some able XXXX your the try the market still progress of clean fact, service share? if are need due this couple it even I where it well become only below and competitive in current them last slow? cleaning the levels in mentioned for to versus wipes, fact

Linda Rendle

the very given our environment with pleased Thanks, I would have. we results, say, Jason. share that I’m

given challenges in the and had and competition demand significant supply great progress. seeing view, We’re my increased we’re we making, unprecedented

X up of share in X So businesses.

we programs latest widened share our at by in start I on continue in that share Kingsford. stand to growing heard and you it, competitive and we back double not focused of And commitment, to a also we’re we the in called we’re after happy growing, strong implement digits to that gap wipes supply XX in really [bread we weeks, why share X work category, only to direction. that. and in up have look delayed with grew we [ph] share as new unrelated strong very the share. back And the entries in that has still and significantly places fiscal many working fundamentals And and do XXXX, quarters remain my perspective I’ve growth, is And completely and points. place. Pricing working growth not you’ve really retail are ensure we we’ve Jason. our had to on Kingsford really at] happy, absolutely where the headed that’s could to If a focused to then well and school, partners and continued have row And to committed this that right a with the I’m pricing, where I’m is reason timing to the new ensuring the executing. going from on with do plans we in back there, Glad, we That

we see I of that as was And year will, to moves, then higher work add And you work move our stronger. would right never in But move price call across we’ll the environment them. be fiscal been be the those forward our given to on would important the of exiting grow And important. base. gaps the Jason along to course, the do then do with expect that we’re to brands in categories XXXX incredible significantly back we’ll other go see goal this we and piece off a very we and is will gaps. was industry, new cost position and have ensure that out stronger We

consumers record And as of penetration, at we measured that know, set consumer our If percentage you look is high the our that portfolio you our rates, value. household deemed repeat by XX%. superior a at

demand. innovation met with feel confident spend it’ll be the we take So marketing great with to to and And continue consumer. fully to ability pricing support that our course, in of then,

Jason English

you. Thank on. I’ll pass it

Linda Rendle

Thanks, Jason.

Operator

Thank you.

Your Grundy is next question Kevin of Jefferies. from

Kevin Grundy

Good thanks. questions morning. outlook. couple of Great, your A on

part that most an building the category restoration I perhaps of first is expecting for see reflective, to the this you questions, is belabor correctly, categories I’ll just embedded the then to margin you year. from growth an pleased the don’t some you X%. question share think, some kind just earlier I’m maybe to business. sales hearing kind this this perspective, what if And market Linda, And want back. this play of you year-over-year a this, longer So as improvement? a for you X% don’t is journey, a Kevin, in? for the generally of sort prior difficult you margin My think company. lower longer-term Kevin, bit for said first, in I the be sound what in expect it So against I with get you’re comps of down organic to back. though, it question, multi-year to of now on alluded that I’ll participate some of for you tell little that half term, is probably but of me the structurally

just So I down fiscal not but XXXX, have back probably to maybe sort until in improvement normal year, fiscal that, and this quick a pricing? margins XXXX, XXXX, materially quote can on confirm unquote, this you. would follow-up you getting business for Thank some of be what

Kevin Jacobsen

Hey, Kevin, question. thanks for the

on organic X we’ll minus see and assumption our to sales X, by growth, across pandemic, the category that’ll is decline, be the modest on we partially and minus see the growth demand other So it as in X, our moderate, offset broadly portfolio. share then

taking And in said, that’ll this growth. we’re assumptions for cost committed and organic actions, pricing between sales year. And program I’ll beyond savings experiencing to I we And this and what phasing our actions the recovering on pricing extend restoration, then cost fiscal year. the are those our you the inflation is think so tell we as that’s embedded we’re margin of

going to margin gross that a see issue, providing outlook have a but for ability as so our get margin mid-gross I’m and confidence resist more back XXXX. to to to It’s to medium- early I in parts. in the moderates fiscal too year short-term And just that I this long-term, do number. embed right see our we’re as taking, moving we plus of environment the is, this you’ll through commodity get see as year. commodity anticipate there’s if in recently, calendar Kevin, now a But fiscal some this the look this environment you we a other assumptions pricing And of decade, in X that actions moderation lot decline end go we’ll the And margin, we of continue of X if pricing was gross in we’ve last rebuild straight expansion and times. you And a margin then to start at recall, year saw subsequent in and cases, our XXXX. most fiscal you actions. a XXXX, before. you over in sure you’ve if when we previous margin pricing quarters the done our commodity I’m had what And But years. margins year back costs went to then on all spike. seen And, rebuild into actions following the

my is, XXXX. fiscal I’ll into you’ll then so on the year expectation something QX, we’ll see and And where similar start continue

Kevin Grundy

gaps probability not think, comment quick of a And pricing helpful. maybe XX%? the there’s XX%? versus you. decision aside, expectations price moving I label justification, further is on on many of theory the the remaining has where sort to What’s the categories dynamics, of game competition? past the going And pass to that XX% I envision there some then, on. was the Or setting the suppose difficult on maybe portfolio. the color on the be other guess, some the cost but price it But versus Understanding just, talk there? about on understanding Why why I competitive Okay. there? of I’ll that. not in private Thank you what’s questions doing delay then follow-up on That’s some

Linda Rendle

it brought pricing XX%, that category, a long-term we as that of position don’t supply to is right we remarks. what work plans us ensure date, as way as were started restore And do maximize categories, with growth, think the us we the but have and part we’ve more we the and yeah, supply marketing are the really very position that, nets you’re out, this that we I back we an dynamics, of gross bit to that of answer, see confidence Sure, on and will are we’ve what able long-term of Kevin look that XX% pricing to through really we’ve doing speak I categories And the across credit innovation pricing then, that margin expansion the at and here that. starting as ensure profitable we what opportunities one considerations as a the and look all meaningful there It we’ve move place, And in And see every a going contributor the that across we prudent categories about first that this. time, the we year. at front little more and which on would move be beyond what once pricing and restore think, means, were the in as had as on in important before on took planning that we’re looking we category said, by up in earlier to we said, spoke prepared want I to will balance really, our also overall an pricing. that category. we’ll margins with in announced in from all It part give our to margins, as of principle because what how additional that. and details market. our taking about, that each we that, more through balancing do we to be gone at is online, opened course, stance of that. at a what category, accelerate a our like is of to we’re the And important every look is to we’re But, really did we to that’s as

Kevin Grundy

Good you Very Okay. Thank both. good. luck.

Linda Rendle

Kevin. Thanks,

Kevin Jacobsen

Thanks, Kevin.

Operator

you. Thank

Lieberman of is Barclays. from question next Your Lauren

Lauren Lieberman

done But the any that you correction you stood first a currently PPD us and just research just particular I’m for curious, if retailer in on do inventories levels the you was pantries Thanks. hoping on of morning. it stand half. color thanks. on Good consumer where you’ve bit same give I built Great, think you’ve in little where inventory category and in in could you retail PPD? have

Linda Rendle

go restored inventories et would as cleaning I different. and assortment, that as see course, year, side delta broadly in progress to have do to of the we do made some professional broader say out, largely additional a plays largely Lauren, the Kingsford disinfecting inventories bulk work Food. the but on good QX, and across largely, inventories on business, and now. But the through we on supply Sure, across portfolio. in retail the good how cetera, packs we have we’ll that is and spot a have it first how of inventory restored, are half some In on continue the progress given those as we takes the retail is of work look to and there, still our We few here do

fiscal And we’ve So business. year at of professional uncovered XX% in lot results. products is inventory had our the sales had big the And we a you in there’s look half what of in half, looks for of talked professional we’ve if a about a that we just sets there like channel. off then in drop front our both increase as of back XXXX,

and just that is front that inventory, experienced we And that, not across half all actually supplied it’s network distributors. our it’s inventory Given by that primarily manufacturers.

when we there. more now is supply, And there do each so realized inventory we into visibility point of having that

the I that inventory at last then front of down short-term, it the of stack And the that sales to our ability to we left on as XX% growth. the having look So means, you is we fiscal confidence have this XX% inventory, read growth, half strong half to XXXX. that But left to grow going it bumpy two-year its growth think year. going here start lapping and continue system in be we PPD, in the bumpy be to half, is incredibly an as first front in strong

Lauren Lieberman

you’ve smaller talked those of some That’s in back you rationalization you’re revenue variety, the to to that thought of sizes. pandemic growth through but and SKU this then, flexibility in how the as super Thanks. what and using also And about intentionally management, choose particularly actually would profitability industry bringing of to larger environment? mix? throughput of packs the to the because this do could kind as of have increase improve opportunity now right, question everyone bit Is I Okay. obviously merchandise, packs and height I then consider an about cost Did the streamline during ways value sort you that in a particular have a you give more of going helpful.

Linda Rendle

adding plan. toolbox margin spoken We’ve net management with moving about our more deal revenue forward is the aggressively absolutely. Yeah, and that to absolutely to

we their we in lines also So X as leveraging things. helps areas P&L. One, But SKUs not the us Lauren, and retailer store that, as optimizing assortment, as many cost online a shelf the we their we in well and which back did into did right mix way. in assortment took space, from the simplify to mix brought perspective, just back the full bring opportunity

that business things assortments use that to units margin time, forward. of net plans is would that So had point out. goal ensure as intend you include bigger our down, use we exactly in assortment, distribution moving smaller and But like that right the come right? will your we’re all lever drive getting over see knowing revenue is full We management points and tools, might mix our to more to a and seeing to are of share assortment, right. play which But certainly moving a forward developing

Lauren Lieberman

time have paying the either in because for choice curious better I’m helpful on one charge just the – to discussed, a think effectively quarter looking. products commitment this understand would And if Great. that sneak excluded to to backward Okay. underlined to I’m be if Kevin, I I that charge PPD company is these very given sure which just tough a important. this it the I during not related this like you helpful from up I results. if did of more, made perspective. is question But supply supply, then, just what it’s was the just know But be that for can And critical get you the why supplier, next, piece was obviously

Kevin Jacobsen

Yeah. about took. we Sure, the talk Lauren, happy charge to

the mentioned, took we ability to this $XX supplier up And we scale a this as what And it supply in million help saw this when their in pandemic, the supplier. unprecedented related fourth we PPD was products. to help related So to to very we charge increase early a quarter. the demand, to in invested increase

move had now them. we’ve more challenges is a as done made they’ve recently, away some they’ve so we’re done from that decision, to and And what we going

away to the And doing the back this so investments began. we’re really business done we’ve our what And that them made here supplier, help at we moved other point, wrote in suppliers. is off when we which scale pandemic was to first

So took we as And the then, production QX. good we forward think, non-cash from a in excluded of in charge going terms perspective. we this non-reoccurring item a we’re in shape

Lauren Lieberman

much. so Thanks Okay.

Kevin Jacobsen

Thanks, Yeah. Lauren.

Linda Rendle

Thanks Lauren.

Operator

you. Thank

question Powers Stephen of is next Deutsche from Your Bank.

Stephen Powers

and to and we Linda all. started from investments very on me the as thanks it Hey, one earnings not I’m move guess, to for about makes get adjusting talked Kevin long this charge we’re think, at sense – a with, I EPS. for investments recurring their business well, I’m to much. X the the good provide out I clear adjust not years in that I discussion I the we why listened a maybe logically, today that’s strategic Hey, case investors on or know, But, different and gain out is And, those I hearing, But doing the what of not last rationale quarter, time, years so. after clarity. than to time backing which impairment, the strategic other I’m pretty investments

why from are seems perceive almost who are these number course in of proactively different you the evergreen for been guys, just years have a what to position last any several – you now? get Clorox. for doing investments where I you So It normal in

just idea enough more this worthy help So, would these earnings. adjustment of unique to why are for of non-recurring different you on adjusted I on clarity philosophically consider them particular guess, investments there’s and that

Kevin Jacobsen

thoughts. is and size investment. I The the this a Thanks Yeah, in Steve, just of investments, question. say the these about of Kevin. for couple is one terms

a $XXX will our are So is X vast majority million investment replacing as years we investment us. mentioned, over system. big The of towards that go for ERP

typical years do or only isolate for investments large ERP So you once I so typically think that. pretty XX every this is that to

sales versus So there, and this people can and really underlying of our performance strategy what’s going we’re much understand IGNITE then is company, the investment, other making more the do investment the And to investments business. on the it, through aspect of this the benefit Linda about XXXX. future to mentioned

here, And significant strategy. as digital to XXXX IGNITE so as us replacing pretty our our we move benefit beyond really well both we’re that making capabilities up-scaling some will start our in ERP investments as

the making well it’s thought we’re which operating underlying be as understand set investments isolate for pretty to we as your the help these appropriate folks the has able to performance, volatile up company So really and been long-term.

Stephen Powers

Okay.

fair Okay, enough.

half You but quarter Can about back to will a X% more double-digit my kind and be in little in for bit the where first back talked blocks, benefit, really, from your of in that the bit long-term plus this already, little the half you achieving about the just, Kevin forward? half. a comes achievable the just own the building back confidence extrapolating and algorithm declines low-end bridge the the from that from the talk of XQ

Kevin Jacobsen

Yeah, thanks, Steve.

the the think it’s about we we’re So that XX% lapping big the portion challenged much is if front half growth. to year, be you more going top-line, said of a

of XXXX, growth fiscal we or, a back in we’ve half got – lap. the me, half So excuse had record the front

we of down our As a result to business that, high-single, digits. low-double expect be

that Linda I comps be by of of we’re range going And bit that think, in back continue to periods, back be that we confidence we a extra I operating to that of a more comps. the getting that more year I getting the think in environment comparison think us for through and the out the of more with to we’re to opportunity confidence through gotten half going the the front the the And point half moderation expect the the get year. should little in we normalized or so. X% normalization. have back in we we’re tremendous normalized we’ve hidden growth, normalized in demand bulk gives more

been so for to us a And to get opportunity. year, going to issue we think back X long-term and short-term a half But we to next months. a we that’s as out the of then the we over start we to can that think the really see that plays that is think forward, the see medium- normalized more about benefits we think I environment, talking you’ll really we’ve look

Stephen Powers

to price there But it that, that could does it talk line that that’s And great. – Or about you could assuming was a I squeeze a about unfavorable mix. mix, was to release, if I supply if mix? led Kevin, clarifying your reintroduction in it was all component am just value essentially by price I’m price is more Okay, one mix improvements the a that? there driven of right packs.

Kevin Jacobsen

mixed essentially was continue in of headwind, It the because we pricing, less favorable in to price the terms international.

So item that as the it point we rest And in mix, mix points of pricing had relate to the X negative benefit price that that we’re those about mix. about within international end was, now wipes’ a consumers changing price doing, of that additional we’re we back certainly we talked to seeing as SKUs. reintroducing the more But supply, about two-fold, convenient I’d say have other are as is, forms.

in form. our couldn’t solution. preferred us. more that a slightly wipes consumers increased when more wipes, sales for produce But of height them versus It less the moving we that bleach. a back form using are wipes, at So now during we the for mix comes good it lower can pandemic, And bleach gives Ultimately, supply of convenient into that’s consumers. convenient

the So more a introducing to product SKUs, environment. families, combination of the well we normalized get additional within conversion as as

Stephen Powers

much. very you Thank understood. Okay,

Kevin Jacobsen

Yeah.

Operator

Thank you.

Andrea next Your Teixeira from question of is JPMorgan.

Andrea Teixeira

Thank you.

committed was comments had during why competitor you wanted Glad taking to I long the comment these because main to back I on keep always leading I on And believe, during Kevin, up question category, and commodities if following on you in price narrow do up need proposition private-label narrowing increasing, and you twice bags question, on bag. your I value that Is those gaps laid that particular, COVID? it, trash? so already. caught for that to prices have large your and hoping, capacity can then you in in gaps for has and Linda, in been on earlier count to to competitors follow-up And and for the an need innovation see intact So, now pandemic, Are especially price to what even your recover it’s follow-up after but in still Glad on thinking vaccinations up? you particular please. a track you prices is are on

Linda Rendle

Sure.

sales were Glad if last we on year. results, but fiscal backdrop, year double-digits, sales we lapped X-year very of set to QX had in just you QX, Glad, in So strong double-digit at a down low-single-digits. growth, And the look the growth stack X% of on

Really, I continue particularly happy overall from in we want like were We a So grow landed. to we with sales to have. disappointment share market a sheer a trash. it’s that where perspective, and category

We improving. share trends are seeing the

latest down X were X.X in X. about weeks, points latest in we So the and down or points the X.X in XX, the XX X.X down latest

came pricing, direction right announced quarter, implemented it’s cetera. improving et distribution, we pricing it to back in the trending definitely again, the getting fourth When being So now. the behind fundamentals right, in

the we evaluating to And from So additional that again, category. we’re in we first program larger ensuring move like to have than saw saw retailer, and every Glad. what Glad. differentiate to committed watch warranted. at right and Innovation the be focused execution, we’re again in feel well then, But moving an increase made right back that. bags. to continues pricing account to now on this important the to if flawlessly, merchandising, on into And category. is forward took we’ve – we we that a work distribution what price round our take we’re really in what which will continue And marketplace But implementing we’ll right getting in-market incredibly is the we

comment but have this of is of in we in that more So, share overall in future. sales, less winning the around that grow ensuring again, the a plans market, terms

Andrea Teixeira

margin? guidance. spot fair, thank and which of then, gets – your to there adapt? bags, question swap you in the that baking of gross resin like forward is is fair from pricing, it using say as for and words, guidance in basically That’s the are And upside of terms And terms more actually you to what stay take in to is pricing, if are you’re you. really bags other XX% for Or portfolio? while In the curves Kevin in your that you’re guidance is to in or pricing, better here announcing

Kevin Jacobsen

question to how for Andrea, about the it thought thanks, commodity we forecasts. relates as Yeah,

we believe We have year. a over course environment is out the of the commodity projected what

we commodity fundamental rate. costs So we’re not our increase. And using see will is assumption to a spot continue

see the half peak commodity and quarter, In to back will think the to then of begin the year. this costs fact, and in them in moderate start continue year, calendar moderate fall, we late we’ll

the I the projecting when cost And the over front you projecting additional it, just little one XX% resin, of XXX% earlier the about is going questions, of This mentioned so, this year. in year. of dimensionalize we’re the most the we’re be think year, we about see extreme half commodity cost you give help information bit to increase to period. anticipate we’re half comparison I front resin of of a in to is the on the And increases, the to of going in for think maybe

of type the that’s dealing we’re with. So environment

And so what that environment that of we’re to But that’s compression over projecting time. in But now, we think rising. where it’s for recover year type positioned well margin to do we commodities a the time will difficult think the land. right we’re full that recover

any in more. that update we’ll change as we learn you certainly So

Andrea Teixeira

you’ve that or they’re on having point using just have consumers is elevated anecdotal built To a And in you any can remains that that supply basically, before. back that of disinfect. still market saying pantry, I question your switch customers if It’s of or your bleach, – lot on to particular. from question your that bleach more. And dynamic, inventory, super them inventory commentary just – your branded just your as already from there consumption to even a studies the squeeze is consumers evidence one heard

Linda Rendle

the studies evidence have Yeah, things or that consumer inventory any levels pantry-loading see pantry excess what there just have happened but there categories, on in we really, don’t for themselves pantry of loading seeing than any as pandemic, across our reversed in those of don’t example, the pandemic. from continued from that early retailers Glad, consumption articulate, height cleaning elevation is was already out. this at lower of you is we the as But a And issue. we’re where categories

Andrea Teixeira

It’s so you Linda. Thank excellent. much,

Linda Rendle

us. I Thanks forward Great. care. We believe you And again of Thank next everyone, that’s then, good the joining again, for you. end to take Q&A. with look our call until speaking on in November. please

Operator

call. today’s Thank conference does you. conclude This

now may You disconnect.

The Clorox Company (CLX) 4 Aug 212021 Q4 Earnings call transcript