CHD - Earnings call transcript Q1 2019 | Church & Dwight Co., Inc.

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Operator

Good morning ladies and gentlemen and welcome to the Church & Dwight First Quarter 2019 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 risks and uncertainties and other factors that are described in detail in the company's SEC filings. I would now like to introduce your host for today's conference, Mr. Matt Farrell, Chief Executive Officer of Church & Dwight. sir. ahead go Please

Matt Farrell

outlook Rick grew of Thanks quarter comments gross by X.X%. us growth organic to I'll on exceeded to organic saw and QX margin CFO. call everyone. the which volume open expansion. with with for our exceeded reported call turn I'll which company a X.X%, sales over questions. When and our grew sales Dierker, few the per our an Rick sales finished, for morning we'll today. up outstanding Organic $X.XX. joining Earnings was positive sales X.X% growth X%. U.S., $X.XX share begin the price. was strong is QX for X.X% growth In was Good quarter, the outlook we then as our

were categories healthy. are our during quarter. market And are beyond categories of growing XX share. of results with our growing growth, grew Our XX domestic XX power the solid shares category brands eight out and our share

XXXX. to online exceed global continues class sales online and of grow continue sales have the rapidly, consumer our in expect of to it success X% we to trade, We in

export, organic Our Church markets a group, another quarter international Germany, growth. particularly global our many we quarters. Canada, driver had and Dwight. terrific strong consumer of growth which International refer Unlike bright with business a & X.X% is for as to delivered and spot our formally peers,

continue to clear to our business made the off. we've good Our investments in with new start and is partnership that it is Jahwa a Shanghai off international pay that

Products, decline organic us QX sales. Specialty a was turning for X.X% challenging in with a Now, quarter to

our who demand hurt productivity products to dairy prices. milk are seeing be for animal We customers lower by low continue from

about optimistic in So, sales less recovery the short-term, we XXXX. are a in

still poultry, algorithm businesses of a swine. good species cattle, of serving like other our sales long-term organic as we X% our and However, about feel result acquisitions

a grew laundry for and was a moment bright business HAMMER the the consumption & U.S. gained of the ARM the in to back lights share category couple out X.X%. and X.X% X.X household, go points. let's Now, up laundry call In quarter.

As sold HAMMER category by continued in to a gain in number points, is with moderated to shampoo and consumption more promotion personal XX%. the environment we BATISTE in quarter. XXX ARM percentage while consecutive for dry XX% XXth laundry promotional anticipated reduce QX. a promotional & on maintaining dry the BATISTE one reduced quarters. basis the We the the growth bit care, plan coming growth the growth share Over category nearly in of doubling shampoo levels

an several expected. have of we pricing. range. than let's categories far The in impact has year, high so been in Late price better Now, raised the last single-digit volumes household our on on update

partners which have we dry the months, retail as complements our few condoms. women's hair we last additional closed business. the price leader removal products. Over conversations brand and is a electric currently acquisition the shampoo We're FLAWLESS hair are increases pricing. care with our market own And to excited had finally the regarding in shipping personal in new fast-growing yesterday. FLAWLESS products with such category specialty These care

on our and growth a and comment to both to will moment. XXXX Rick of long-term in to it expect domestically outlook more FLAWLESS We contribute internationally impact our the

the We're we helping. our really feeling business rest model So, about and in conclusion, quarter. year of good evergreen had the a terrific is

the outlook give Rick the is up QX and quarter and year. to full for Next first details on you the

Rick Dierker

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

to X.X% $X.XX was higher sales global by up up sales results. Organic primarily quarter organic product our quarter up XX%. was with of our of revenue QX consecutive is -- We're due consumer outlook, X%. This better outlook than growth Reported was global our in First third driven margin. beat of consumer $X.XX X.X%. was pleased the up EPS to in share The growth per approximately were XXXX, gross to X%. extremely of were X.X% X.X%. $X.XX $X.XX our compared exceeding The excess

the review let's segments. Now,

sold X.X% & global several promotion. First BATISTE benefit Consumer Domestic, HAMMER laundry markets largely countries. to our while CRITTERS STERIMAR detergent liquid detergent shampoo. cat decreasing clumping BATISTE WATERPIK volume TROJAN ARM we due liquid gummy dose flowing & was condoms, HAMMER as HAMMER ARM the detergent, dry product group. and laundry increases unit on XTRA detergent, cat was HAMMER grow liquid price price in L’IL organic led liquid, vitamins, Growth and higher Germany, positive growth and see up organic share sales by & increased by detergent X.X% mix, & & continues BATISTE and sales ARM the ARM litter laundry in laundry and and and International clumping of the through. driven FEMFRESH in Canada, in gain to litter, ARM amount HAMMER liquid by

our X.X%. Specialty Products our For organic declined sales Division,

Although demand continues the grow the to for industry demand poultry in industry, be to our products challenged. in dairy continues

Turning we exceeded margin by you year XX.X%, volume the gross manufacturing will now a and partially programs, price point to costs. from and commodity are to was year productivity This ago that full our gross XX later margin, higher margin growth, outlook. raising basis expectations, increase offset increases, our first a due hear quarter gross and

and due down percentage points marketing sales basis Moving are now a to both $X.X as of Matt, marketing, year-over-year. decreased largely sales as you X.X%, heard share expense XX from timing. million But net to strong. Marketing to was performance net our

operating working decreased for the of was net all point was income XXXX. expense quarter XX.X% represents interest This SG&A increased for compared over QX, -- $XX.X XXXX, $XXX.X the million was expense. decrease take cash, by talk months primarily QX effective increase to prior Other year, cash XX.X%. capital, operating the were offset now for in an first higher as about And and than our year-over-year. more million, timing-related. million, XX.X% for margin acquisition XXX that's and the tax, activities And And the points $XX.X net XXXX, operating like quarter basis SG&A, points. rate largely in to driven a profit I'd to XX our For treatment. of increase basis basis in the accounting cash earnings by minute a XX FLAWLESS from three was an from

know, typically continue period which the you four their buy As inventory will during day we the will with agreement, business FLAWLESS approximately Based do on operate transition systems, when we the the deals, last X. to months. on

the we net in During this will release. company's the sales our detailed many impacting earnings period, in operating recorded of be line, metrics results as

months, For will consolidated results be specific within line items. remaining FLAWLESS four the P&L

increases So is XX From the XX net basis basis by expected to basis points; marketing decreases sales on SG&A increase points; impact FLAWLESS total points. the XXX gross and increases XX is, margin by points; basis company by by is increase will a capital in onetime million at X% accretion offset be approximately of in period earnings end and the cash by perspective, total. inventory build, a the one-time cash expected purchase which $XX working a the transition

result, the neutral. acquisition year a is XXXX cash operating flow on As the of full effect

numbers. discussed, adjusted the adjustments P&L. These from earn-out, be previously the will results, there be our quarterly FLAWLESS reported as will excluded to impact the will Additionally, will but which impact

sales outlook, we X.X%. second Now approximately turning of organic expect the QX to quarter growth

to for $X.XX, over share We organic the X% be last increase we now continue sales year, expect quarter. approximately approximately And second full expect quarter earnings year's per of X.X%. to

X% X%. which XX X% sales point of be the to division, the other This organic of X% terms discussed Half up growth business, the expect increase now SPD. and QX approximately a half half full increase of outlook points. by the the for impact, margin, basis basis We in will represents impact gross second year. the pricing for the we flat and additional as of guidance plus expect of XX reported from to of well is previous In international a our driven domestic FLAWLESS now gross from expect year coming now is by as We better previously XX. combination margin actions,

transportation above pricing prior impact saw the to manufacturing of surfactants year for commodities, quarter gross a for the forecast year. balance is anticipate cost While QX this we in of margins were increases we the pleased One gross of with to year, impact example where a see double-digit market prior margin. below first negatively and still we

SG&A result of a As a percentage be related acquisition, sales to as amortization of approximately is the expected to FLAWLESS the and transition expenses XX.X%.

discussed I would We growth neutral. with questions. our And on And The $X.XX adjusted continue a reduction to happy expansion share business take the of acquisition. to to ago a in by as to month is EPS larger would the stated is X%. range Matt buyback being a offset $X.XX expect XXXX adjusted to that FLAWLESS EPS or XXXX and we of with we margin do on share per activity as we any X% be impact gross EPS base

Operator

from Our first Instructions] Parikh Oppenheimer. [Operator comes question with Rupesh

is line now Your open.

Erica Eiler

morning. Good for Eiler actually question. Thanks Rupesh. is on taking This our for Erica

had elaborate right bit still front? seeing So abate promotional could a what you now if promotion wanted about expect little promotional to actually backdrop. this further the activity just to on curious you year? I touch was I And you're the more on do

Matt Farrell

thinking about we're the categories. In household about Okay. environment promotional talking generally

look you percentage year-over-year, what down about laundry was at on look category the it was at if points. So basis sold deal and the XXX

to quite down XX.X drop. it's like from went it So XX.X, so a

& category HAMMER is we laundry Where the for average ARM liquid the is XX%. XX.X. for right now So

So points year-over-year. we were XXX down basis

remarks -- I the year. my quarters. sustained I next opening rest reduce a it's So that more would quite said of to expect be in for And so also as down the year-over-year, I to the in expect we move three

The to litter. other is category to pay attention

sold Dwight as So and down category, Cats deal. all Clorox a & are brands you've of you've Tidy on and litter those the percentage year-over-year Church on

category points. It went XX.X. So XXX from XX.X the to is down basis

So down a quite bit.

-- last to increases that all promotions. commodity the XXXX quite all experienced on it increases transportation Recall as bit and have jump bad, still back from XXXX, that going has expected XXXX XXXX up. as not everybody a big So pulled manufacturers to seems but going year

behavior ability the suppliers of to the offset So is with this increases. consistent cost those

Erica Eiler

Thank you Great. much. Okay. so

Operator

Chappell comes with SunTrust. question next Our from Bill

now is line Your open.

Bill Chappell

the I hit good is a status getting inflation some kind about just Thanks mean talk kind seeing heard mean outlook of have to any some quo? you still of there? lagging though what pretty on I on bit you're front? better you is Or know little going commodity We've Could logistics. you. that's freight it the I improvement morning.

Rick Dierker

as example status Rick. is that Hey Bill. say I an This would transportation quo.

in last mid hedged increases we think time single still our many we we've year-over-year does in expectation. about think I I as we that us I largely QX, on And February times we commodities. example XX% float, our touched said was actually for to in piece hedged lot back down have ethylene for of alluded right? remarks That a talked digit QX. that's Like that in capability some and my an are

forecast Now and the April QX, has so it lot QX. in But up like QX going QX. looks far

we're that time think long I time were in a actually for the first So abating. optimistic commodities

Bill Chappell

Got throughout it to there's back certainly that mean expect it. still one terms the second understand liquid player promotional mean -- and And a Trying question. kind to year Do seeing are you laundry you Europe levels? I time environment, again. you of time I maybe comes of just abate the in expect in

lasts? just I'm long how understand to you So this think trying

Matt Farrell

to We've that's Yes. We to the Bill. what in Europe down in do, on referred continued the kind this that's XXXX isn't of even of company going the Look but deal. the is XXXX. half competition sold this second to first one started trend you quarter in predict into just quarter see can't was

it's obvious that, that just is going very So around quickly. turn not to

Bill Chappell

then one me. And last Okay. for

seems litter pricing, to surprised is kind advertising. and is promotion, actually starting for the that because of with battlefront be I'm all it Is abate? down introductions to on in everybody players that a Just a new major and promotion,

Matt Farrell

to to sold price to to that increases you're want these drop the When have going in on hold back, mind be not all and down you price people People going aren't it's consistent see it also keep it somewhat as deal. to have increases take profit. able dealing gross right? much that see So to you

Bill Chappell

any competitive Got litter? the real in But seeing on change not you're it. environment

Matt Farrell

No. No, not. we're

Bill Chappell

Okay. Thanks so much.

Matt Farrell

right. All

Okay, Bill.

Operator

Our Powers Steve next with question comes Bank. Deutsche from

Your now line open. is

Steve Powers

Yes. Hey, great.

opened through just share. with talk the again the So about brands categories I missed number gaining run just some that you on some aren't of categories are or statistics of or that that Matt briefly, those brands Maybe growing and of and see in there overall. But could results plan at brand of pockets disappointments the green? or are great you incremental so, you improvement? Obviously, where are surprises or And there tied level? category any more the they Or are if according actually that less? kind the to

Matt Farrell

Yes.

XX, day, get it's think the out question XX of not when to is I up. I'm that one they're going that

Steve Powers

Correct.

Matt Farrell

the of categories It up were the XX was XX in quarter. out first

the the last secular of there that be Some say side year-over-year, intrauterine category. are years, that devices, alternative argue are for for categories also couple cetera. But related rates. house say and on -- There the of like be the reasons you et down birth that including may sexual of that that's because well condoms see would contraceptives struggling to where are we as condoms, I'd also example. are those Plan for the Kids is weakness. health -- I'd could is some to B

time. where most of So I would spend my probably that's

Steve Powers

Okay.

Matt Farrell

far go… As as shares the

Steve Powers

Yes.

Matt Farrell

in …our the quarter. grew power brands XX eight out share of

basis. year Last it’s XX seven year of full a spectacular. we had So, out on

of about the feel we So the brands. great strength

Steve Powers

a that little at how lot You just Can talk were? you're the measurements metrics to -- that about ROI they bit ROI time you'd Power versus are against campaign. your just Okay. expectations that tracking campaign? of trending Day Cool. spent what is there? how More Investor then how that you're And a on And the you And assessing

Matt Farrell

of think now. Steve. We're right that just it turning Well, Yes. on campaign way, this

said, be something upon think when that really at down hit resonates consumers. Exchange we're multi-year with I to I program. going the Stock As is we've that a

boost start think because be as couple categories. seeing so for well, digital print that next to as & to going a different this hit but You're television us, both in of we and big across HAMMER on going it something is ARM the as is is many months in well

laundry. it's different It's brand, many phenomenal litter. underarm It's It's a So toothpaste, in trades it deodorant. so because categories.

all of So halo this categories. those to campaign is going

an right give you to off kicking only how So on but quarters it's that it's hope know in let to going, update future just now. you

Rick Dierker

spend encouraging it's in results spending the just terms And Steve, always had. that that we this just quarter I to when add that of would lowest Yes. is we're our Rick, marketing year the of have

So that's another good indication.

Steve Powers

Great. Okay. so much. Thanks

Operator

Steve Our comes from next question UBS. Strycula with

open. is line now Your

Steve Strycula

morning. Two questions. Good Hi.

of First the growth. first organic personal of the last drove again Is would the that the quarter quarter this I in be on WATERPIK sales about year? case believe XXX% care segment.

Rick Dierker

No. It's not.

Steve Strycula

Okay.

being they calling So some round since you. Would of escalating get be, quarter, out surfactant the increases And the did mind open sequentially negotiations this price piece better? second other Thank we business is would you're you about of should commenting? another think costs there? that for

Rick Dierker

Yes.

really shampoo in as did have strength BATISTE of care I So, release. a I the couple we dry example. personal an areas. some CRITTERS different in quoted quoted L’IL

offset. those of So slightly way a positive, the kind was from increases of the kind and I but price know WATERPIK are perspective. volumes growth leading PC

said, gave when price Your months said our to QX of going on laundry But down second how up QX, reductions actually increases I in category lead being another in was were three was like not it any category. laundry we – with price It's increasing. many we question QX, coupon you're consistent you're actually the Matt before. promotions in was alluding expected Well And year-over-year outlook. and seeing back round that to the surfactants was of to kind seeing ethylene times ago type quarter. of to what peeled we're in what surfactants is and be that

Operator

English Our with Jason Sachs. next from question Goldman comes

now is line Your open.

Cody Ross

your Cody of announcing our morning. English, was on This of household investment question. take do share? Ross wake year this liquid market What been increased actually this any is competitive This expecting are segment. acceleration Why morning. laundry? recent the do you And step-up you your the you gains segment's period think products for in your share market is Thank the revenue to progresses? you've categories. in taking Good competitors even for in with your some able given growth think in activity driving exceptional Jason you product Sticking as

Matt Farrell

HAMMER laundry liquid Yeah. this many ARM & about We've before about detergent. the talked times

we against that a and And mind in brands. detergent. of the unadvertised scale It's on keep they laundry but & is Purex to liquid brands it are detergent. HAMMER the a that others are end and have compete Sun You the high ARM value value is

the compete have we a in distinct advantage So we in way that.

lot Our those consumer. brand of equity and resonate a with brand has the

HAMMER again, for Now, promotional detergent is & laundry ARM – we've And we we the growing year-over-year. grew – reduced year-over-year been a same this quarter we liquid time that the did quite years. spend and this our bit at

which we that You So also To Power – is campaign the going help have to and it's coming, us. behind More

it So I largely promotions. brand with think to this do equity is than to more due has

Cody Ross

segment despite Personal condoms you. to your that in Thank guys growth have your Thank really caused significantly decelerated all that this care This what market in the And Or Is to seen called BATISTE you Great. you. WATERPIK. else you segment. the out and that just segment strength in this juxtapose the slowdown? quite has slowdown?

Rich Dierker

it's Yeah, two really things.

I health bit we business slower think and to alluded then WATERPIK isn't increase our businesses has sexual grower. also a elasticity Matt it's happened. price And volume so took being – the a

And the little a grown so is the WATERPIK result has business net slower.

think as takes in that's of the what transitory happened kind but price QX. we So increase that's hold,

Cody Ross

you much. Thank very Great.

Operator

Bonnie Our next from with Fargo. question comes Wells Herzog

line Your now open. is

Bonnie Herzog

morning. had quarter the your they Good which positive is All question margins inflected right. great. Thank a in gross on you. I

the you guidance really hoping just here for now? up your upside the could rest could and end guys drivers of your through So more margin conservative. actually the key gross outlook any see wondering being and talk Do changed if have gross now for year for margins if you of

Rich Dierker

at that points. price on February. basis our from increases so said have plus the for have margin back Largely to year as XXX time was, for hope plus February XX of met the XX through we was we portfolio. we in minus counting in improvement right? these for in getting mix, We were we February we're on That's for Remember, we of going full said And Bonnie. XXX were how were going points then got basis from price/volume the to gross we back of to XX that when XX% minus and XXX We the back productivity. Well, tariff. outlook detail plus the inflation

XX change, Now from we comes plus XX then two base outlook. changes and bps basis bit really better XX small and The of price/mix points inflation. plus I'd so is a a business, plus say, little not XX, now in from would is the say our volume there XX lower comes XX

So get you that's plus then the is plus and really from how impact and XX to the other acquisition transition XX accounting. the

it. So about I think We to start. a great really good we're off feel

We half quarter. we the is first XX have We slightly plus be second the down think quarter, in first in will flat.

is probably up half XXX. Second

how that's get to XX. So we our

Bonnie Herzog

what a second And know products Okay. That's but question. helpful. my little on you're if down could you're the maybe drill don't guys, but headwinds. pressures that a much recovery, expect to it's then you're changes be and business. any in going with specialty And hoping comps then easier in lapping further seeing for business you you I you you making to small mentioned, the deal

So just continued recovery kind expect expect if of should we trying declines remainder sales the Thanks. for Or QX? year? understand the possibly of you to kind of inorganic some

Matt Farrell

Yes.

of Just market. a the dairy color bit little on

So the of influenced milk. industry dairy dairy the is price, price by

than was milk even less that's was $XX.XX weight, XXX it's It $XX.XX. it So per pounds. it was QX that at low. pretty XXXX, if hundred how class three look was you sold

dairy are So struggling. farmers definitely

dairy they XXXX of of decline in If U.S. in farms much declined XXXX at number X% a I the cows was The X%. look only to year, mean there drop licensed the you so number didn't last going

around distributed USDA. all single but was farms, So that the largest by other dairy got to drop those recorded those the cows

the industry. dairy So from obviously doing What the three is, now over tough for right for been going past we've been we've dairy away diversifying years.

that So XX% our for narrow our last animal of Specialty business said nondairy. Products about sales was sales year was productivity of we that what I'll XX%

absent So greater difficulty. would an that have even we

XXXX, years three XXX% business our back went of productivity dairy. you was animal If

it and But know in it But swine obviously. a are does we for continue we So eventually. businesses cattle long-term the this to that is is we come cyclical and back the poultry. worry think business, a directed expand so us towards meantime,

growth. full to a a think happen. year on basis, we organic year X% full out we -- For I going That is said saying not started

the I year full be it's for business. think going Products Specialty to flat for

Bonnie Herzog

right. you. Thank All

Matt Farrell

Yes.

Operator

with from question Our comes Barclays. next Lauren Lieberman

now Your line is open.

Lauren Lieberman

Thanks. Good Great. morning.

I volumes sustainability I industry margin just a you're in standpoint, about gone for facing? so cost specific. well. for gross I you Just opting terms pressures very, just price pricing and Retailers may through little bit basis. What talk industry. just have from kind that increases some absorb day-to-day? putting good And worry in perspective guys commented that's are of going? very having that wanted of curious on about given are pricing you're an in to not Clearly, But terms But of seeing was of about a Church on retailers how sustainability flow-through again. many justified just your to like curious it's you, nicely the guess I mean was that held the you the what very are

could Thanks. So anything helpful? offer would you be really there

Rick Dierker

work the takes two have with to And with we brands better Look can respect we think than Yes. reason and different position are for number focus profitability. to bring know that brands help asks number actually others. are to on to is -- and oftentimes place that turn retailers something have the that some that one their we we so those challenged suppliers in party. retailers a to having And to conversation a I deal all when

three, need more be you up we that's conversations two you you're number we those the far number hey, so can When the brand need number retailers. When an a retailer to moved the say need one eye and level. say And difficult. to have x I if with should we and are then might brand, four endcap, five

the dealing to and the you number we've something risk one what be Lauren I number that the than So two. are that been think at brands brands is far with more several described are years. last for But are going those

become okay if now, well. you You would that it's to retailer profit to -- go penny also more expect price. as the some might is acute But for going say, the up going you raise

that in our of all is not profit pockets. So up winding

Lauren Lieberman

was Okay. There a the FDA article potentially claims Great. then competitive from this just of just seen on. category. terms as that scrutiny of All there and different the vitamins you've right. smaller changes some category? was in on the a recent increased may or thing more the so so in that scrutiny And level on space players far over from one journal, effect in activity Anything about regulation might retail be shelf in increased facing of of be terms the

Matt Farrell

Hey it love seeing about that. had bought that. see we a and don't to remember when journal specifically handful Yes. of I But the talk I it's competitors article business got the can't we'd XX. today

regarding we gummy content the that we going more disclosure be and of with. scrutiny benefit to there's to the So to that vitamins extent compete stand

Lauren Lieberman

much. so Great. you Thank

Matt Farrell

Okay.

Operator

from next Our Bank comes Tong with question Olivia of America.

Your line now is open.

Olivia Tong

where of also terms just Can there organic promo growth particularly you. any price/mix And makeup talk thank Hey, volume your then the change sales Domestic? about view on in your in then Consumer up? target in terms versus much of of bit price didn't effectively you in price/mix were decline? was actual promo Or lower of potentially you. Thank versus little And a any categories list is that increases? how

Rick Dierker

A here lot of there. questions Rick. Olivia,

price/mix. question volume a was split between and just First really

half for XX-XX. about we For was it the said QX company

the so domestic that expect maybe -- XX%. division was it would throughout volume the for For X% X.X% year. continue price/mix, trend to I XX%

a think I that's good ballpark.

Was question being was it? maybe weren't Second promoted some much. categories as other that that

Olivia Tong

Yes.

Rick Dierker

just What I say... would

Olivia Tong

Sorry.

it where categories was were didn't there if Just up? down or promo any actually go

Matt Farrell

are more big the ones. far the we house Personal went litter laundry by driven driven side the is it by marketing. care less those at of liquid are detergent we No promotion a -- ones earlier big the look through did Yes. and is

generally that's care. a conversation in topic So for personal not

Olivia Tong

there on I as international in given then little was know I not price/mix was comp it's But Got moves it. an year-over-year. of terms it see to And I I a the in like down it's know guess FX that surprised QX, big. elevated but

So trial call driving Is Is to else that it a building? can mix of out? businesses? what's that? there talk you Anything about just

Rick Dierker

on no it's the anything Well, a than hit comp More you it head. issue.

If you it price/mix look positive XXXX. was business in X.X% -- was at QX that in

For the it was year X%.

stack QX bar if in X.X. stack you minus X.X X.X up you had the So if the at just, is almost

right So that to is usually for is X% where that's X% at business price/mix.

So it's a comp favorable some did of from have in some exiting charges more we our back reverse We were XXXX. to as venture. China issue had and price/mix

just comp really issue. it's a So

Olivia Tong

lastly changing, maintaining of Got you'll better it. net-net in And expected but then obviously terms expectations. company just total Domestic worse year Consumer your obviously specialty be you a had lot than full not you're

basis? us So expectations can you full year just update in terms your of by segment the from

Rick Dierker

real remarks. Previously domestic, X.X% said organic. quick X% in did said year X.X% X% we we do for prepared that's it February and I to the it But had SPD again. for just my Yes, back international full in

get international domestic, and X% Now we're to X% saying to SPD flat the X.X%. for

Olivia Tong

Thank so you much. it. Got

Rick Dierker

Yes.

Operator

Joe Our James. comes next from Raymond with question Altobello

now Your line open. is

Joe Altobello

morning. Good guys. Hey, Thanks.

Rick Dierker

Hey, Joe.

Joe Altobello

question guide. in that's on shampoo believe I dry pricing your guys prior you condoms. took and to a have that I the incremental

justified? EPS impact any there is innovation-driven? it from And that? So it Or was cost was more

Rick Dierker

It's Yes, to in justified price every has was, this I'll environment. be take talk question cost that the we single EPS -- Joe. it about increase

it was answer So to question. cost first the justified

would for half the and of of FLAWLESS, let's we gross gross is the at easier points down basis that We to basis we XX all back do XX okay, would've basis think made flow XX out we that XX like in of the to I up op say, because And our we XX margin back XX remember, expansion. just would've of noise buyback it it SG&A and that basis points Well, terms take you categories. partly in points at margin from it's of strip margin points new right? stayed that's of million million exclude So would of for got we EPS? stayed have just February, did. care for do for and program did personal said, just been leverage where of and points our what points In you these sometimes deal, if larger raised marketing FLAWLESS we that pricing would've the through if a $XXX improvement basis basis year $XXX

So margin operating higher. but is EPS is neutral,

Joe Altobello

Okay.

So it's the effectively. lower just share count,

going the you e-comm of Amazon industry curiosity, of on changer do terms have an out game sales? really think one-day just you delivery think Does members. Prime has same Or to that the happen? for Secondly, that impact is to day in

Matt Farrell

think, a changer. game yes, it's I

I think, at the have to in maybe some everybody just going and one-day towards move to future. point same-day

think Amazon the retailers. and keeps mortar on up just the I that bricks heat turning all

for catch up. So that will such be them as time a competitive advantage until others

Now not something matter to matter But option that the Joe. to people. point get watching same next or having it option may at we're it you But consumers may some watch, it's day whether something too, definitely some day. to -- the closely

Joe Altobello

But does example? faster, get XX% it help you for to

Matt Farrell

of sales? XX% online

Joe Altobello

yes. sales, total Of

Matt Farrell

big quarter, know year-over-year as our us or It's online to going Whether up buying far as change there. the in online. behavior were that's -- first two-day to it's that's We I don't got one-day, a XX% jump. get going sales. consumer We

X% pass So to we're for the easily the year. going

that we're we're the skills direction happy the and going to compete all online. digitally So we're with and developing

Joe Altobello

you. Thank great. Okay,

Matt Farrell

Okay.

Operator

Our next question JPMorgan. with comes from Andrea Teixeira

is Your open. now line

Andrea Teixeira

you. Thank Good morning. Hi.

had and just this recognition heard question, accelerated what But operating more can, to e-commerce shelf How at from on we Rick And of FLAWLESS, mechanics on I the the it I that old benign I seize modeling So quarter. in revenue it seems still clubs. the it. think the I ask and non-tracked one organic spoke is more some a comment the to for operator last can if is, laundry is positioning channels? competitors. for be of of quarter context at that because and the again the X.X%? gap quarter X.X% on -- you the rate space of And believe second gaining into one the you just Day. called the to for second you about narrowed your the more quarter club? tone just performance Analyst competitors the of growth been as printed know has that trying in mean, just for just -- because the than also of growth trying just pricing I conservative

want how growth. was the and I organic growth. think account go, divisions just it how not would to to obviously, in going wondering in for -- you. So don't different I Thank accounted to it's be

Rick Dierker

Okay.

Let's start the channels. tracked with untracked and

XX look if points. untracked That other other well. would growth in Matt offset, of couponing points. had X.X% have -- points alluded add basis our Unmeasured get e-commerce, you though, Nielsen, X%. at strong basis and about you our consumption about been or would We -- would if around basis look at to, channels around XXX growth by around really as as So and all XX

the talking that that you to organic we're about. X.X% take So will

as talked we a the You deceleration about many also we year. alluded to just remember, pulling times through on of half Well, promotions through organic growth really in back for go we've maybe year. and as QX the the back are

But does feel that on such like we spot in volume. an we're can good a So do that. that have impact we

We're kind to try And company. now related on basis is, we and portion yesterday. go guide the right This months And a FLAWLESS we was goes the -- points four closed when the you on the P&L to not four just best third question for to of FLAWLESS. was it net on of lot the for of divisional yet. We're so I to -- every months. and plus can helping line for XXX the we then through transition or the -- is sales that that of breakout. dealing ready detail -- Your into do give

Andrea Teixeira

kind is run of growth business? rate XX%, that the of, for And that implying

Rick Dierker

We trailing. that is. business It million was $XXX said

the If you months, That's since we operating XXXs. that X, points. times low around and around net that, that's by by four we XX XX% funny on remember, profit get closed you could that the $XXX May by eight XXX-and-some times months. is it sales only recognize the for accounting But first basis million. months Divide

around half -- And of less than it's so really it's that.

you go -- you like it's maybe But detail what more than that's through can in it less we So think. if why offline. it's

Andrea Teixeira

Thank Okay, perfect. That’s you. helpful.

Operator

with Mark Stifel. question next Our from comes Astrachan

is now line open. Your

Mark Astrachan

to I to the morning Thanks specialty go back everybody. segment. and good wanted

curious of enough it, volatility But perhaps it animals, I it other make some some just about I'm to some you, you've Or that? moving incremental itself? the of kind accelerating that it's now. but So does volatility. to from get that change segment I don't there within to dramatic of categories like And know behind is reconsider cattle in stem the doesn't seem What the say potentially parts And February away that talked about the change visibility other does about it. the of expectations the in business? from

Matt Farrell

is, high the way should think that No, margins. about business XXs mid got you of it's gross to

recovering. acquisitions essentially come milk we that up milk predict things informed the actually happen are is right do are you're prices other flat, quite back of to last for XXXX the over few to milk what When about in say, of less as the And some it's half made X% you a going moved into going futures what what since looking went into now. There the XXXX. so that now have us were; that you -- and that they prices year be out, are hey A, bit optimistic looking the would categories. some that they for industry We're estimates predict years

hurting thing the other the The tariff that's business war. is

China States. from example, one number of is protein importer the for So, whey United the

as those farmers. the milk that hasn't prices. helping all And haven't so wound the depressing that's obviously, NAFTA-X dairy changes been up still ratified, -- So,

about the to So looking feel in because diversifying we the good it's at we like more away effectively be that move we But long-term April, year. going still saying, from making flattish the for now are dairy. feel we're business

Mark Astrachan

pricing wanted dynamics price helpful. Got where costs and with. but the accelerating in are businesses more go increases And how bit question dealing in as us fared benign. back help prior Thanks. on the underlying input pressures it. retailer historical or are or trended the dynamics the the to Perhaps the reminding periods have and That's also a they have that of lessening takes how inputs are to puts becoming actually the

more historical that So some back on there views that form increased helpful. the bit in that promotions price the back So there of of or push is any would anything chance given going a is certainly on forward? based be retailers

Rick Dierker

XXXX I'll as are In Rick. little up what for it. Hey, bit XXXX. thing. that's a correct now, Commodities was. not But just right our it's significantly to right? abating ethylene still We are general example said an Commodities one commodities outlook are favorable QX to from up year-over-year. was

So back barrel. and that's is environment in oil this you -- around $XX, as -- guys up to a know $XX

commodity because what out that's So existing not is inflation right narrative are of the that's increases now. Price happening there.

Matt Farrell

like abating doesn't mean But move over things going look glaciers these backwards. Yeah, time.

if about happens what it it go talking to what cycle a you're way ability historically long we're some Well, and then the creates from at So down and that. suppliers point in price is now But is umbrella gives a a commodities promote. what happens? away

Mark Astrachan

Thank you.

Matt Farrell

All right.

of at talk it I the you all sales had to up, great think second margin folks. end that's gross a we'll the were quarter, quarter. Hey, and expanded we

Operator

for your the participation Ladies in This and conclude gentlemen, you does today's conference. program. thank

disconnect. now have may a Everyone great You day.

Church & Dwight (CHD) 2 May 192019 Q1 Earnings call transcript