CHD - Earnings call transcript Q3 2017 | Church & Dwight Co., Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Church & Dwight Third Quarter 2017 Earnings Conference Call.

Before we begin, I've been asked to remind you that, on this call, the company's management may make forward-looking statements regarding, among other things, the company's financial objectives and forecasts. These statements are subject to risk and uncertainties and other factors that are described in the detail in the company's SEC filings. I would now like to introduce your host for today's call, Mr. Matt Farrell, Chief Executive Officer of Church & Dwight. sir. ahead, go Please

Matthew T. Farrell

finished, Thanks the us, the quarter, Dierker, Rick to everyone. Q&A some call I'll color Rick is When CFO. on and our have for morning, a today. session. joining provide over we'll Good then turn

growth X.X%. reflects strong was domestically. by volume That Waterpik was and organic organic the which pleased growth very driven We're with XX.X%, sales reported growth the So acquisition. growth of X.X%

our XX targeted Consumer as earnings of track Our year Products growth. full spending X category really met on into has business in achieve numbers. strong Specialty International brands growth, share power growth. investment translated the business the or turned X.X% to We're exceeded out Both and

Our our business International Consumer exceeded growth. expectations organic X.X% with

continue to business. Germany Asia to to be of international new X% we come at last we algorithm been look of offices our in to established sustain hard our export over lot approach a In will Panama growth. topic and that long-term support to this taking know, future. Last the a we in business organic invest our in August you year, opened year, our As this a region. we the new more business. XX to There months, And the on have in best and subsidiary Singapore European expand

year level X.X% a quarter Specialty higher growth. U.S. organic Our than farm strong dairy remains business with had a Products profitability at a ago.

block productivity – tongue in We've and the BioSciences year for Agro that's are growth important is this starting more of products for acquisition twister. probiotics business. We cattle. business The of animal get a good outside building poultry to seen the traction earlier dairy an

products industry for translating and into sales. seen the poultry dairy development business new in have industry We are efforts in the growth the good new our probiotics

points yet momentum consumption. our category unit XX back higher Once laundry to we detergent quarter. were now, October growth, category some & XXX laundry and liquid detergent and unit dose for again, promotional HAMMER ARM QX, quarter. the slower grow sixth improved XXst new levels That And innovation, the carried QX, our laundry able come grew the bps has our has dose In October grew the line. have way, unit in with – by in to the categories, in also grew consecutive Triple dose category consumption dose, unit claims of outpaced levels & declined Turning, share the basis into domestic behind driven promotional share sequentially unit in category business ARM rate share rate. quarter. and HAMMER times OXICLEAN the our now, consecutive gained efficacy dose finally, packaging. Chamber six for by

In category Our is and share. X.X%. total all brands, litter, share, grew now HAMMER all for the the and dose clumping litter grew ARM X.X% gained & X.X%, in unit consumption

last XX new a Our already reached that in rate repeat for Clump than share SLIDE except & category greater bps has we had, litter launches share six-month customer clumping which the quarter. the XX the is and X% segment (X:XX) of slightly litter has grew purchase better. innovation, Seal, we've SLIDE,

heritage. hair to dry BATISTE loyalty grew The about BATISTE of dry the QX. U.S. product. share has with care the is a shampoo the of strongest in So, in SLIDE in share. future shampoo category million grew feel dry shampoo brand significant XX% $XXX XX% category, the we the including now The brands X.X good points any category

with gummy is on BOGOs lot vitamins. discounting. is of Now adult X%. business, turning XX% a gummy grew going category contending significant approximately to in the which our grew quarter, in the while business There's consumption gummies, gummy competitive our adult been vitafusion,

in consumption although in some offset declined been that's condom online share the measured so was TROJAN participating, Condom quarter. been is haven't by by our that in down, We X.X% of category The consumption. slowing channels growth.

in discussed we condoms. catalyst our in are less is to always category Innovation people increase younger call, growth. of As a we're having use QX non-latex seeing sex, an plus

well. geared Our is new towards XOXO women, condom, is which going very

Finally, we attracted We future has gum to acquisition it in the consumer a Waterpik to closed because Waterpik quarter. health bright continues the grow. the of of as awareness were importance

you QX is on for some the the up Next rest Rick to the of outlook and details results year. give

Richard A. Dierker

with EPS. Thank Matt, everybody. morning, good you, and start I'll

joint per largely to The to XX.X% for $X.XX SG&A. impacted growth better excluding prior-year hurricane from Third were sales $X.XX in share $X.XX $X.XX better related up up Reported XXXX, impairment to tax revenues approximately quarter tax reserve help disruptions a compared to margin was from charge. some $X.XX of tax, $XXX a XX were adjusted EPS X% negatively our venture lower benefit organic gross points Weather-related outlook, the due organic a by X.X%. basis was quarter. reversal million, and than

increased shampoo; X%, the sales review driven stain of mix X%. price fighters. growth detergent, in negative let's liquid offset OXICLEAN & baking X.X% by and growth and, volume; BATISTE organic Domestic business soda; higher Volume Consumer dry segments. litter ARM Now, laundry HAMMER by cat was

all October start. In which to good NPD as was to up improve And terms growth is organic an QX. reflected impressive of globe. broad-based said, International levels, off higher Matt a negative household this support, we across lower the price, care growth, in X.X%, personal of versus promotional expect

up the our higher due animal sales were business. productivity For Products volumes division, to Specialty in X.X% organic

netted, than and of a by XXX adjusted points. better the follows. despite continued points, on margin due This of the was improvements productivity gross SPD. bit points XX Turning volumes year promotional was the to QX to improvement impact margin and decline XX.X%, The points, out a quarter and XX better our and acquisitions drag margin, divestitures, FX productivity helped a slight International third basis of programs hurricanes, decrease to QX; a expected, largely the basis as point breaks of impact that margin basis drag XX We higher and originally basis ago. levels basis gross a XXX we gross in for due was had of from was

a quarter. I and were resin ethylene-based in hedging our XX% drag of been prices Finally, said was, a know XX commodities derivatives spot surfactants lot has mitigated resin like and, increased quarter, our basis on by between while the on XX% part, point and the in impact program.

better year percent our we up spend years, to now, QX a in were marketing were Moving, the Remember, in versus as Waterpik, previous big to innovation. ago. QX and marketing, we spend If we basis XX.X%. concentrated This revenue exclude of a year XX points quarters QX. and support was QX

spending transition SG&A increase, a XXX up as net of is of lot amortization sales Base SG&A QX. is a higher basis spending. and was XX.X%, Our like XXX percent attributed levels due a to costs. acquisition and which look points legal to QX basis point R&D

operating was by shift profit, XX.X%, marketing which margin from operating higher adjusted $XX.X was interest. for reflects to million expense the the recent SG&A primarily and Other million, of driven acquisitions. quarter Now, $XX.X

income reserve. rate which point benefit for taxes, is includes tax XX.X%, of effective the joint our Next, the due venture a a reversal quarter the to XXX basis

quarter rate effective of Excluding reversal, adjusted approximates in year full the XX%. rate that the our reserve

net year, by higher of higher is This inventories. primarily $XX from to $XXX The factoring, million $XXX Turning due earnings. million accounts prior first decrease of cash to was approximately higher decrease largely generated driven for capital. nine cash receivable by Full and the compensation from cash, to we the be million. deferred payments working timing months, cash offset approximately the expected partially the year Ops was

business growth driven strong the share conclusion, include expansion quarter strong and continued our business, Domestic by International in highlights Consumer third SPD in our growth So the in growth division. of

a the our ramp MPD The Personal fourth quarter approximately early Care Care to business is support and for promotional and Personal good bit are our is we levels growth expect sales QX to of is Turning business sequentially start. growth as outlook, read promotional October X.X% we off a stronger, category down organic improves. down

organic We to a turning XX% expect ago, growth the compared fourth or year-over-year. adjusted our year expectations for share $X.XX we're increase sales of quarter a year, $X.XX per X.X%. to full And adjusting to earnings approximately

acquisitions continue to achieve EPS per year. to as expect the And We or EPS for a adjusted are growth, $X.XX reminder, X.X% share. neutral

cash cash revenue company million aspect is that CapEx most believes is excess reform's represents the the a rate. $XXX net our of a XX% XXX% for the The full come This moving from million from approximately free U.S. target. our flow but of as in conversion. $XX And that of perspective, U.S. meaningful the flow, a XX% free corporate tax reminder, finally, all And a expect We of based of approximately year. in know tax lower profits business of over we

it up Matt now, will So open for and questions. I

Operator

Thank you.

comes question of first Chappell from Bill SunTrust. Our

is line open. Your

Stephanie Benjamin

on despite on and for Stephanie My little just is definitely, international the a this outperformed business; comp. the more tough Good bit morning. Actually, is expectations our actually Bill. color question looking for exceeded

if would you so just what expanding more helpful. maybe on or are Asia, of kind you're some there? which So could doing comment be And color on color seeing – obviously, it much. better, in is brands your then, just give there Thanks

Matthew T. Farrell

the Yeah. We are and three said STERIMAR, generally and FEMFRESH, one. STERIMAR, international the – forgot FEMFRESH. – BATISTE on prior big I yeah. business third calls brands BATISTE the that that drive our

Canada & to both and HAMMER us, HAMMER Mexico. North well has ARM that, & addition in growing detergent, really ARM been America, In for in in laundry

the goes, is extremely across You and quarter. our know, the virtually as as business had third healthy growth business of broad-based in countries the far we've all

we I international X% annually, that confident is algorithm before, can our and grow to long-term we're that. deliver As business said the for

is countries It Malaysia, there middle a products in Indonesia, growing there, about consumption be are Asia, far future. be class. our class under-represented investments And earlier would our most more of area, interested consolidating so growing we're middle making extremely with increasing as and Asia-Pacific at care the us. mean, looking I comments resources As a Thailand. in that products, so using the attractive my personal Philippines, to we'd has

Operator

you. Thank

Our next Kevin question comes of from Jefferies. Grundy

is line Your open.

Kevin Grundy

Good morning, Thanks. guys.

Matthew T. Farrell

morning. Good

Richard A. Dierker

Good morning, Kevin.

Kevin Grundy

know the for you Did for down less if I on approximately a so XX the in the year. to X% material I that? hurricane – points had Can less from the fairly of quarter, you lower far was you even on hurt basis X.X%. bit I the So, but comment sales little year? outlook modest in on quarter, now, it. sorry. apologize I'm it comment the we're guys before; missed organic

Matthew T. Farrell

Yeah.

second it. the only so you Kevin, question You're miss didn't in,

X.X%. a categories bit so year X.X%. for we in up of a call, categories, quarter; the expect think and the down So, our – for our X% over I ticked same full third first little our the QX, year half in the grew in That's that's reflected and

lumpy international. lower and of in international, going to fourth They're that quarters. for other is much is that's has The of somewhat of quarter, can International – that be it because for three the big one export. growth reasons and piece be the had in

We in our different have and of reflection part lots of a come long-term countries, short. why will fourth international of that evenly. bit but it expectation of always be doesn't quarter little be story international, the for we'd the no so It's

Kevin Grundy

little clean of a timing of that So, year helped just the in guess, of a guys bit Matt, guided in international? running bit was quarter, to had timing you Was little because up? I there where the you for there that are ahead, international

Matthew T. Farrell

quarter early Yeah. so and big little change in international. lumpy. a it's the It's first a international, at X% we X% came had – quarter organic – No, we bit for for for

over our the into lowest quarter fall to be it's year, just of it'll So, XXXX. but going

Richard A. Dierker

basis stack still Yeah. face like the the QX, so for the a low-teens it's And not of dropping even business, Kevin, earth. off it's on in international in we're the

Kevin Grundy

the growth I me. quarter? in did no. for ones Rick. Yeah. X%, think growing you a the help. rate related XX%, No, have guys close to more but Two know been post then, in so Understood. a you quarter of provide regarding Waterpik, rate that, you're to guiding the business the historically, I And quick what would the deal? no, growth Thanks, learned it's

Matthew T. Farrell

had said as X%. in as to but say August Yeah. the is of I We what growth that far of The detail well is net target in business quarter, evergreen it's level what sales going perform the into above September. our and we grow – get did didn't can

big a So, story we to forward. going of think this that our be business is going part

big business their be to things of international very which in it's sophisticated Some online, only It's learned, I $XX business a course, of the opportunity, you. culture; sell very online. international. would we've to a is of how XX% might innovative have today. $XXX business astonishing because sort think is million of And international a in we is million

their grow of business. that lot those help a can have we So, we leverage guys

– also, upon we're have it happy with their we how Church as The much very to it's on dependent is a and, leverage suppliers that can So, the networks well. very is people the with is integration focus as business. going Integration Dwight grow acquisition. this the internationally & we not

Kevin Grundy

Matt. Thanks, guys even up category coming One sort Okay. is discussion consumer with that on are some but costs you and pointing comment the could have increasingly, slower weak of reemerged more, if to here, data. guys that environment; pricing the you input environment's

guys. ability respect here with So, in there what's your that costs would QX? commentary of look your to it that see And helpful. Is we me. pricing something that's respect expectation out pricing pricing? you to Thanks inability lead here to some inflate would to be year, with And do the as next in take input categories? to take you as So, any for

Matthew T. Farrell

in you're have and to be in is to very generally pricing you even price tapering to input environment then, with difficult. only share, clear this number a costs. going where you story is respect I mean, need Yeah, taking categories one the a have

be, condoms that would for example, for So, latex. in

input sizes, in how is pass-through in get price. a you of and ounces is units difficult. what changing see in I price generally costs is to think So, quantity package, going – you're Typically,

Kevin Grundy

you. Okay. luck. Thank Good good. Very

Operator

Thank you.

English Sachs. Our Jason next comes Goldman of question from

is line Your open.

Jason English

Hey, morning folks. letting you me for a question. good Thank ask

Matthew T. Farrell

Hey, Jason.

Richard A. Dierker

Hey, Jason.

Jason English

there. Hey,

Matthew T. Farrell

ask a always can Jason. You question,

Jason English

but to. not an can, always audience I it to there's ask usually

drag assumption pricing acquisition through of bridge, mix rest here, So, P&L, the say, of of to that for your think hard at and it us? the out there it's the while Rick. the negative I coming out to little margin of cost understand better XX of And only holes I'm XXX magnitude you're trying wait up where bps rolled fill we I an of benefit kind a the the price gross inflationary is pressure, XX-Q to – at high from you gross for points maybe to heard that margin in level, do line. bit to you terms get come given in SG&A without basis that's Can

at that gross Are of underlying margins sort So, substantially. of business underlying basis, of the you And getting sort down true? on track it If A, track? winded, on to, question. you both EBIT? implies to guess, long margin still are sort where kind is expansion base still sorry, getting are an of expected gross so, and you I multi-faceted is on pretty I'm

Richard A. Dierker

But... Yeah, lots of commas in there, Jason.

Jason English

I pauses, Lots commas. of Yeah, know.

Richard A. Dierker

were basis divestitures, basis hurt basis a points. to in points impact You the rehash bridge we XXX know, by the the forward. commodities I helped of was about promotional basis XXX leverage programs through gross a margin the said comments. good XX and net then points and did of volumes was XX go acquisitions plus quick in of basis go of that, my higher really and quarter; prepared it you, and was XX talk drag on points points. drag the productivity and I'll levels, a But Currency for of

we Now, margin gross on a are go-forward basis, confident is yeah, expanding. that

some some is to XXX I XXX We past we it the probably in headwinds look some down of a XX% from this QX, predominantly hedging the news think for points good Personal Care our original year, last mix great impact couple the right. bit down number's that costs, closer that versus Household. the had program, fall does a but business our XX% resin mix than to We've the is mix; of do negative call, QX full basis the outlook was little of basis the price of talked us. was. quarter as because have That's going trends points. quarters, about at But in price domestic over in you that

products, around down are being to lapped. litter We promotional well, are some expect our so couponing ramp new unit the generating like couponing levels dose flat, it Why? fourth lower activities closer of new the be Because lot in our a doing slightly – the maybe have trial negative, our quarter. we of to and lower and

in have as And had we Care So, year in Personal well, improved in a category QX. performance, price negative QX. we then, laundry ago expectations the

the So, We gross we margin for continue short the backwards to to say any base don't the have business answer I would gross be way. going expect margin base is expectations any have momentum. to in

to for think continue there We we expansion that year, have for next sure.

Jason English

margin do still expansion year? XX for And bps expect of EBIT you the

Richard A. Dierker

or I three fuzzy, you, metrics there ex positive and including of costs, transition because not kind Waterpik. have and slightly Waterpik. Waterpik, through, that without we we because tell is and implementation go we talk with we're integration would It's four do but about

Jason English

a I'll on. pass Thanks it lot, guys.

Operator

Thank you.

Gere next question Our of KeyBanc. comes from Jason

Your line is open.

Jason M. Gere

out more growth. thinking – to how sales little international? quarter. think a outsized of there? wondering year's promotional again, fourth little that was you the X%-ish be growth, you organic going see should year? in Consumer you to bit have we we trends, Do tease terms about from I could on And maybe I there I could if know of know think Do guys. you've of the EPS changes just Thanks there's bit you think a guess, next same Domestic next are focus is to what I down organic – next when bit is wanted guess but Personal doing coming year Waterpik kind commentary you did really talked about about better, look promotional a like. hear little that an little to bit I environment I Care I bit acquisition. Okay. good more a your little out number mean, the you category And sales. the can could we're and How about starting a

Matthew T. Farrell

our February. you Jason, know, give only outlook every Well, as Yeah. we

today. X% have we XXXX couple Products Specialty Agro other a on Specialty X%, that couple going and forward. remind driven annually, we by is VI-COR, growth, of X% a the What no got Domestic is of the from everybody expecting last can was of into the is businesses, based other that dairy, of intention X%, of of the of an that growth organic lot we we're So, And giving I of have Products evergreen BioSciences fact years, target bought outlook target and a International of than so us growth things over that, one that business X%.

Jason M. Gere

just could the topic. I Okay. broached Maybe into, I maybe, it just Care, the if extend since Personal

maybe you just I the that's coming there's think, how innovation some talk businesses play some If to could of consumption new starting where, about out; wondering trends. into

about or the you're that where about seeing, obviously, If maybe kind Can maybe a promotions is saying October, not Personal more, of resonating, you you little trends maybe out next talk into you and, that bit think the where that category, confidence BATISTE well oral be a the can you're gummies; matching hopefully, sounding better innovation quarter little year? flesh gives categories Care condom I and a in is the bit is which fourth better doing know on you that bit the Care Personal in little sure. I'm you're there, will but

Matthew T. Farrell

Yeah. those that seeing already Well, and condom has seeing both fourth in We're quarter-to-quarter. the vitamin consumption improved consumption from we're quarter. trends

dry question XOXO business. to side – new could rocket answering it's with shampoo, obviously, been be on a ship a is of for Now, had we of in innovation we the the for some can respect vitamin And BATISTE, that has condoms. early story when fourth part of us. course, your little quarter

time, category that the are share. and the grew UK have it levels tremendously quarter we if a $XXX $XXX grew probably the we the UK million in my And it share at fast year-over-year and million. where might that's category category. be grows as as a on comments XX% third same and, You will That's off, at XX% heard that

on So in it color gives Care. you a little three Personal bit of categories

Jason M. Gere

Okay. Thanks, guys.

Operator

Thank you.

Our from next question comes Oppenheimer. from Rupesh Parikh

open. is line Your

Rupesh Parikh

morning, my question. taking Good and thanks for

to we to I that $XXX million next detail much or to have the to get XXXX that the know do not current you're also year next I but looking is So year provide an until thinking update wait figure And number? on about wanted FY for year, outlook. next still ask for

Richard A. Dierker

Yeah.

You go do acquisition we'll There's going also have then we how of forecasts the There next keeps to an when we Waterpik to a right. it. it, return a tried to happen, downs of get to wait puts some our We – up, to that's visibility we on about And outlook. Resin for see you taking pre-hedge external year but there we're lot February had to are about update. to soup-to-nuts till don't but do. going were thinking now is peers going lots pricing, and example, right. level that think detail wait in in call out big of their coming lots takes talk calling and to February, the that a until full give to to not going that We're we're through until we you wait right of November. give in forecast typically

Rupesh Parikh

then, QX? also quantify uptick curious any there's was October slowdown Okay. out Great. growth – on I what's saw growth you in there's slowdown category you. And then, the if rate just rates, going back have type to you're driving on category in to the speculating any perspective? perspectives you just a the from additional everyone's guys And there. Thank clearly, seeing that way the of if Do

Matthew T. Farrell

Yeah.

to way you got the to at is think think categories about volumes. look I the

much the category. barometer. in lot So, going long it is vary stay household is, and, but a in as greater personal comes to to it simply the volumes that's story categories that's And volumes categories, good of real think a when typically, healthy dollars, it's care, it's category healthy, than price; are so to in I from as

we're dealing now. something is last I but don't certainly something all with price that to So, think the is that permanently, going it's

Richard A. Dierker

they your Why? in as higher in was October, had around promotional question, the closer of example. were to levels deep QX – an answer weren't were categories lapping in said growth promotional some QX Matt our levels X%, year-ago. to categories it and Rupesh, Because other as some And X.X%

Rupesh Parikh

Thank Great. you. Okay.

Operator

you. Thank

[Consumer Jonathan Feeney (sic) of Research]. from Consumer comes question Research Edge next Our

open. line Your is

Jonathan Feeney

Thanks morning. very much. Good

of couple Just questions. a

given than and you I'd XX% online would driving that data club a and e-commerce on is Waterpik's are you related, a Consumer First, performance, to comment categories scan just a second little number. what question, on better had love huge And tracked our maybe Domestic bit that. your have e-commerce, mentioned indicated,

make think more – but sell I some you there maybe in Waterpik friendly, from and obvious your that can Thanks other e-com some they are learnings at overlap it there's high-value very adoption differences advance overlap learn some can some that real directly? – you business about that of and really e-com where businesses that might much.

Richard A. Dierker

Sure. Rick. first one take and the Yeah. Waterpik the e-commerce. Matt about will is I'll This talk

Your questions consumption. really into shift

was X.X% consumption around So, quarter. for the

was club. TROJAN business. on said online the to have quarter. a three Nielsen-type from release – online That's channels, ones get that VMS, and big example. positive point We up right. We XX%, we the really online basis untracked XXX basis have business measured doesn't and are like similar in from couponing, XXX for then, our in litter and data – points And drag That last of the

get shipment X.X% how number to for that's around of So, or we our Domestic. organic number

Jonathan Feeney

Thanks.

Matthew T. Farrell

Yeah.

it's – fact far years. and online, more their the sales Amazon been but your their on they've social what Amazon, on a content than they're on pages, early have number focused to for I listening as it a seen we've it development it's comes with been sophisticated of really run people online, of already the for of that in before, group Waterpik, for in And as skills, to development that working we've web Europe, As impressive said question days, of business. when respect that

can we we So, think a do lot from these learn guys.

to it because But Care Care Household lends any there category than is we're and a it's of sales now would Personal specific family. happy guys be one Household. are very than as benefit, far the mean, these As Personal would that part more more itself question certainly that I good online

Jonathan Feeney

much. Thanks very

Operator

you. Thank

Our of Macquarie. Caroline comes next from question Levy

line - you. Inc. morning. open. Your Macquarie Thank Good Caroline is Levy (USA), Capital

Just a few things...

Matthew T. Farrell

- Thanks. Hey, Caroline. Caroline Good ...on the – (USA), Levy Inc. acquisition Capital Macquarie morning.

was that bigger had the we just outlook, in acquisition On than contribution seems quarter. expected the it contribution past the

what Waterpik you you if give come sales So, And a with see ahead sales whether just sense is from in Waterpik, could us that plan? staying a of the of coming part – what's annuity then, electronic standpoint Just that's the the of sort really just the gadget and cycle from replacement there? business, would the be from deeper more understanding a what and helpful. part percent percent little

Matthew T. Farrell

Yeah. Sure, Caroline.

terms units now, really a versus mix replacements. the change units On replacement, units, in like not small percentage day very It's predominantly it's it's largely as replacement one, replacement the a okay. in the right. this between one at second That's and right Maybe applicable but just in of it's that's that'll the general. future, cycle, time, three-year

Waterpik that's our So also practice. behind why on don't. just businesses; category question so just the innovation past of is important, That's then, We're and not the the driver going penetration really why first is details was And your but contribution. that's business. we that not to give

we're Thanks. going any pricing Got done acquisition, and Capital Inc. war you might it. this - Avid, just clear long as for bit are there – Levy – a And trying OxiClean. little (USA), but continue? impact with. year us going for with just what price can, Orajel, any as metrics the EPS and you I'm to help business it environment touched on Caroline or understand that within put a and Macquarie it's can haven't be on the stick how vitamin the the neutral but then, in around couponing, the what's whether what to was We we that's

Matthew T. Farrell

there's for And creating the like the when to lots on vitamins, is than pill gummy consumers. existing when a are fair from that brands and so Centrum. somebody There there right more Nature Nature's as brand expanding are for Yeah. The loyalty comes Made, and expended the Bounty, business, to the options as products that pills category of far and space shelf, it a Well, space now when of out competitors gummy products, exacerbating lot switches healthy. look, amount bought when largely expanded, has there's has now transition. we are you capsules, first go BOGOs

yeah, the through to right do in the BOGOs, and is grow. affecting Levy gummy campaign which quarter. new try we engaging in But Caroline. have to fourth we been haven't category (USA), in we ability concerning Inc. continue to I the a - break We noise ad it's Capital do and our be to now Caroline So, said, Macquarie as the expect Thanks. to up something watch, that

to major Just Because the are – think fears label that, lastly are one seeing our your just you Amazon of point? private categories player? which I of investors player going and on at become any And is board a wondering a them Amazon in is categories this across there? big

Matthew T. Farrell

No. the on we're gummy gummy Amazon. in mean, number I one vitamins,

fact, our so what bricks (USA), no are shares Inc. in you comparison Thank in very - are Amazon right super Caroline there Capital In much. worries Great. Levy they now. mortar, in high to Macquarie and

Operator

Thank you.

of question Herzog next Wells Fargo. comes Our from Bonnie

Your line is open.

Sam Reid

lot Thanks, least to shares talk guys. you know here you market? for Bonnie. then, least immune significantly that a the somewhat but is U.S. penetration, detergents, as label potential This term is for this the lot had in guys. are places U.S.? a private There's you And in longer is I filling detergent from think at a a in separately, like Do about tracked at Why the private clear risk U.S., label Europe which higher, category in Reid detergent we see bigger the the label channels. ever in actually less talk across positive I a actually of picture been guess Sam question. many private do categories in

Matthew T. Farrell

and have label the deep And detergent. already donor is been trends, laundry No. a value has a don't detergent deep premium you time. value been in label point value time, and make generally you mid-tier for because so has as come very long difficult have products an to The not value. any reason and that the the long-term if long, mid-tier. you money to share long, value extreme laundry look private a shelf, a price at to below in in long the It's is it's opening private in deep and is on for And reason detergent value laundry, today for

the in reason. miniscule laundry label private that U.S. is yeah, for So, detergent really

Sam Reid

you. belabor of some question about specifically, on hate little had business showerhead really follow-up Waterpik; Got but sorts here, owned growth opportunities it, that's – for And now but that the helpful. business. I to there. this seeing though, while? are on category looking I No, here, Just you've for another channel a not then, What just you more color

Matthew T. Farrell

wouldn't I Yeah. game. say a it's It's more really innovation. distribution

are at have own in number flosser number the the just really So, in And and showerheads. share water also as experts they water one category, the the jet Waterpik replacement have share they folks one technology.

typically regulations the other business. deliver around game. that's it's affect you flow? of go generally gallons the per showerhead not – game. Question the lower number replacement to have So, So, same minute, future. you your higher consumer distribution the X.X; you In a to – is, the do a that an to water back innovation to words, experience technology when It's there's did in had today, go it's really going question,

Richard A. Dierker

game. distribution a not It's Matt. with agree I

in customers early some other having front at. the team a Waterpik presence are success have We sales larger we that of some getting

So, integration that as well. we're as part about happy of

Matthew T. Farrell

example innovation. an of you give I'll Yeah.

new is So, the a products Pet Wand. one of

So, today, you pets know than grow. have children that to that people continues more and

trend. So, behind particular it's that getting

in into So, the pets. its wand your shower their for washing technology a translating

Sam Reid

Got so That you, much. sounds Thanks guys. awesome.

Operator

you. Thank

Astrachan Our question comes next Stifel. from Mark of

is line Your open.

Mark Stiefel Astrachan

the became morning, appetite large if to with would trying related merge an sort you're something like broadly? available, those? new sort and for and, potentially Anything to consider of M&A assets that, share for you rationale assets repurchase everybody. the of size the Thanks, like, assets, say equal And I box, outside sort guess, to larger Wanted of authorization. RMT, just to regarding understand

Richard A. Dierker

line It's to really the every in mean other We've buyback. us RMT-type in $XXX our we're next buyback authorization. the just share history, allocation and doesn't repurchase gives go our with flexibility model; This on line is spend We've done much capital a million just on comment I'll take going and Matt year million I'll year. – stuff. very with let right. one the It got pretty Yeah. that authorization. $XXX

is going in debt; future, concert priority, also, would what do right is would yeah, and, with we So, the after acquisitions. paying number you that the levels historical expect in probably one down

Matthew T. Farrell

most to no through the go, our to question, combinations But banks from could the at strangers value. that's we'd the answer with it have we're I open always in your all proposing various with past be in transaction, which recent major company, bigger say. coming is about extent that create in, yeah, other structures, structures looked companies other to time my the And which shareholder going to And the visitors we is as second than Waterpik transactions to one. as far

Mark Stiefel Astrachan

and the the Great. wanted to would promo commentary the volumes How have you of that and of that? month on go be back October? can normalize sort And to competitors sort some despite, obviously, quickly you change decide category guess, more become I should traditional going how price puts you lastly, promotional, seem about just more the think the a forward. you view particularly to softening what the levels place, that of said volume in as way do in about to programs takes to

Matthew T. Farrell

Yeah.

move how you redeemable those on quickly. a things competitor act react immediately to coupons, price As typically as are can to far take IRCs, it's you pretty down,

As as be far six that's deals out. with the to usually retailers, months going trade

Richard A. Dierker

Care level of passed, from We're the the has Yeah. improvement down the year and products expect and period we improving. in to mix new trial not ago, our promotion. of starting negative of that some that And see Household because promotion dramatic we're to some saying saying around we're is spends from Personal going lap couponing the

it's early So, promotional our expectation also levels down while October's significantly. read, not a go good that

Mark Stiefel Astrachan

Got you. it. Thank

Operator

conference. to I'd call portion Mr. like closing the Matt Q&A And for turn over today's you. concludes the to back Thank for remarks. Farrell this

Matthew T. Farrell

see and everybody the Well, Okay. we'll for in XXXX joining February thanks outlook. with today us

Operator

for gentlemen, in thank and Ladies participation conference. you today's your

Have You day. a may wonderful disconnect.

Church & Dwight (CHD) 2 Nov 172017 Q3 Earnings call transcript