CHD - Earnings call transcript Q1 2022 | Church & Dwight Co., Inc.

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Operator

Good morning ladies and gentlemen and welcome to the Church & Dwight First Quarter 2022 Earnings Conference Call.

Before we begin, I have 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 call Mr. Matt Farrell, Chief Executive Officer of Church & Dwight. sir. ahead go Please

Matt Farrell

growth. CFO. for everyone. review the joining And of better for call Dierker and up held The rates XX quarter consumption. grew X% XX was April improving. QX turn that's back news was on morning is organic is adjusted EPS consumption XXs begin many to then compete was across today. to exceeded with big organic our sales good grew our X% done, as gains for call the the last our some Rick in a Reported $X.XX to outlook year. consumption us. than rates a is the and over when The we'll Thanks Good fill This questions. Rick $X.XX open of us for categories we of we QX top are I'll We revenue our which I'll and remarkable high And now X.X%, Okay. QX categories cases in mid outlook. solid in fill X.X%, results. and our low

our double-digit in of them ARM Water QX ZICAM & consumption In online categories BATISTE shampoo, total saw brand Litter, seven dry Boosters, name brands sales zinc & WATERPIK, percentage XX%. mouthwash. of for Flossers, and HAMMER growth I'll HAMMER sales was ARM Baking THERABREATH Soda, Regarding those you. supplements, Scent performance & a as ARM a HAMMER and Clumping

increased Our year-over-year. X.X% sales online

experienced versus we top mind, growth in e-commerce XX% XXXX. last that in keep is year on QX of Now, this in

be sales. the as for above XX% total percentage We continue a to expect sales full of year online to

increases effective another you covering have of through our announced as products Since inflation. million portfolio. and recently result early announced January, inflation. on increases had to our we global we Fabric year. in last to increases since And of new Now, we XX% Care a incremental we already round this announced $XX in price are of will we combat XXXX of cost XXXX, July expecting spoke Litter be early And price now which price

higher-than-expected In pursuing productivity approximately in addition now know by size we as to pack and laundry offset to we concentrated Also such our changes. you additional costs measures XX%. are may pricing have portfolio

Now, up is Consumer in business I'm of business growth Domestic first the this grew top XXXX. organic on going in and US. to about talk sales organic X.X% and each business X.X% Consumer is of QX the

seven gained QX, XX share. brands in shares our of market power at Looking

THERABREATH brand surpassed performing Our XXXX, TDPs acquired mouthwash the consumption XX% which them or quarter in THERABREATH, most the remains strong acquisitions points THERABREATH distribution mouthwash number for and also quarter. this ACT delivered as fourth growth. THERABREATH XX% ago. up XX% to mouthwash QX call results great brand as we quarter the of and alcohol-free the category grew are the ZICAM first a alcohol-free year versus Total two recent are full largest points brand. we was well. of which in had share of THERABREATH X.X with December a

XX% was segment we recall share ZICAM acquired our over of in to may expanded ownership and masking and a to our we December were cold We of little remedy share. one social year You hurt of ZICAM cold at due consumption the QX XX% shortening XXXX. distancing. in up

grew category flat case VITAFUSION quarter. shipments Gummy of Turning high fill as Vitamins. was XX% for relatively the CRITTERS and consumption Demand to gummies low. our but the remained were Total L'IL in

our to rates vitamins fill we are good So, the QX. in starting in left finally table The money is improve. on also news

the Global STERIMAR, International. Despite significant by hurt BATISTE, QX deliver Lockdowns VMS X.X%, transportation Group. some did business organic Next growth Markets primarily in in and driven disruptions, up is our International OXICLEAN, issues our results. and

We have them. fill to just we're struggling orders the

We difficulties the half second abate International. in to in expect our

Products. up Next Specialty is

strong Specialty consumer on I health a innovation a to business Our to Products private by few both X.X% pricing want the higher the supply. quarter delivered spend label of our with organic minutes driven trends and and ability volume. growth

further. Now, interest we we And is to inflation expect make are at start wages tamp will have consumers all risen down squeezed while that choices are make a dollars know to to and households their rising high multi-decade rates inflation. go getting

here have that few but indicators are Netflix We a seen lose we're subscribers, seeing.

of in improvement. our Over flat premium Cat quarters. home growth detergent in year-over-year may ARM Litter in business. and spending to which grew Personal than consumption Cat faster showerhead, after share HAMMER faster less value Over box our was point Cat the premium WATERPIK Care, an consumption detergent product, & is is ARM First, be Litter Litter, showerhead traditional QX. in losing priced consumers several lower price a for & which indicator may models QX HAMMER this orange And that be on slowing is in category of seeing flosser then is value in

remind these we're more second important to It's litter, a the prepared XX% And valued. and Now, is our half. businesses portfolio also out of orange in point are on vitamins in environment. are largest and economic larger expect we our in eye trends to And we promotional an keeping and is our box -- to valued perform everyone, that well detergent become products. value difficult if just categories

may feel be coming. we for well positioned So what

stable private where are regarding in Private brands. exposure categories, shares have Now the five we meaningful label store to label.

across these our and improved product and we products in lineup shipping QX As to attracted you and care new are new Most believe is saw always in our consumer have strong of the release, personal categories. offerings. household innovation we a of

bottom with saw our our Regarding below supply, early fill Omicron XX%. ability we hit and to resurgence we rates the QX dip in

end I of on the toward by the mid-to-high the track rates trending to and fill April earlier, fill historical at year. mentioned As levels XXs be are we're

year have outlook So in reasons. our we confidence full several for

improving fill We have rates.

shelves the concentrated hitting innovation is of our product July Two-thirds spend X. the marketing new by in half. second have We

We of the concentration have consumption. incremental pricing impact have and positive the of we effect

well, our hunt we of is more brands good portfolio new expect and give closing, bad So times both continue Rick details and up, on QX. for next to to do And in TSR-accretive you to businesses. we in

Rick Dierker

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

First expected. quarter were our up as sales, adjusted margin EPS well strong was $X.XX, better X.X% outlook, higher-than-expected to due than prior $X.XX and revenue continued driving flat to organic The gross as up was was better than Reported $X.XX X.X%. primarily sales consumer demand, year.

Now let's the review segments.

sales to due increased X.X% Consumer price/mix lower offset Organic First, positive by by volume. Domestic.

growth. was to WATERPIK organic Shower a drag programs As anticipated, the discontinuation of Club

SPD Consumer experienced March laundry had due sales continued news in concentration of month increased We chain to through prices for bumpiness volume. due into some the X.X% price are higher due organic are Good forward. increased disruption QX also in level April to XXXX and have Milk sales moves out Canada. organic that in to mix throughout supply now. laundry transition. and our business, we And flat projected broad to as portfolio International decisions and is and the QX

basis margin decrease a a Our year XXX XX.X%, from was first ago. quarter gross point

positive higher well and you XX manufacturing walk distribution as impacted XXX points was to labor, inflation, costs, QX related as by through me a margin Let to bridge. Gross basis commodity the primarily points basis XXX basis point basis productivity. a basis points mix, point from and These XX a acquisitions impact currency. were positive from from XX drag costs offset positive from price/volume by

net marketing. $X Marketing expense, to of year-over-year. X.X%. was up a as million Marketing Moving was percentage sales

million effective a points. all tax, For $X.X the was ago, Other our year-over-year. quarter SG&A increase, to resulting outstanding. decreased a debt for income basis average rate a expense XX SG&A, $XX.X was in And QX compared adjusted XXX XX.X% million, basis XX.X%, from higher of points year decrease for

rate to now the year full be to XX%. And to expect We continue cash.

three in by $XXX cash due increased of first operating from months cash the offset XX% activities working For earnings. improvements capital, million to lower XXXX, to partially

operations expect be XX, to approximately $XXX was year. $XXX full for We million continue million. the And March of to from hand on as cash cash

vitamins. year to CapEx approximately focused full be as on to continue and expand continues manufacturing $XXX plan laundry, capacity, million, Our litter we

sequentially of X% after sales expect trend mid-to-high the of XXs. April into expect sales an to we and QX, levels is improvement we X% growth seeing case from as X% approximately reported This up higher in For growth to fill X%. approximately organic QX,

expect contract QX points, price as the round latest our share, Adjusted consistent gross continue with X% an decrease of ahead year XXX half inflation to the basis outlook is outlook. from will margin of higher was We And down now what last expected EPS. adjusted we X% EPS for $X.XX to increases. earnings per experience be approximately our in This QX be January. full year's means to first

approximately be be to X% full growth reported to continue We X% to sales growth expect the and year to to approximately organic X% X%. sales

inflation, announced We're you compaction cost the offset. to million original to compared and an laundry help planning outlook. pricing our in incremental $XX As read back on productivity we release, incremental of

continue in expect We point rate. effective to XX%-plus rate the basis increase XXX income to effective offset operating -- tax a growth

X% full of We continue range to in to X%. EPS the expect year

of now expect to at I range. Matt we the take However, And to questions. be the that and end would any low happy with be

Operator

of comes question from Kevin of line Your Instructions] Jefferies. [Operator Grundy the first

Your line is open.

Kevin Grundy

international. Great. just guys. Hey, Good morning, start on Matt, maybe

recover a chain half. you and You in pretty optimistic little with supply are the about bit sound you talked back will some that guys contending of issues that the

of business that. years. so detail. in seeing good just little the We haven't has more bit just number We – a haven't been through been Maybe to a now walk for the issues accustomed been

I think you mentioned lockdown.

a more of International for granularity about I We the quarter your part but in a the China smaller of on while, a balance haven't get confidence bit your Maybe and think little in the International year? the business. talked business just that's

Matt Farrell

Yes.

much QX. way So the growth organic a better we X.X% won't It be in by in QX. had

GMG And of is expect we part the XX% significantly said we're the that Group remarks Global of fastest lockdowns be loaded and problem back-end product Markets getting just six have this QX. been annually. to with prevalent The especially Markets growing in the And been International. it's the bigger in the dealing business five deliveries has starting we International And we yes, it and one-third grown deliveries. to now Global And is to years in actually going our has past So business, has that growing. over Group. in it's

entire when one affects down So that slows the it business.

the have in important orders. we is thing mind keep to The

to be just them second due expect the do behind But We continue those either in QX we us to are to struggling or transportation half. production problems issues. fill in but

Kevin Grundy

ahead I'm Got it go yes sorry. –

Rick Dierker

for course to One improve is improve from the as going business that's US US thing countries different to our the that. from the And in example. internationally. of fill rates add rates to exported That fill really supplies

Kevin Grundy

Thanks, it. Rick. Got it. Got

both for you. follow-up more one Just of

the in data your of I'll I on pass what from just Just you on. in and any what guys the lost in take around Maybe elasticities, broadly, far. remainder of comment the what's we're think then embedded guys. it's hearing a of and so consumer. your not And staple really worry of just seeing guidance just And year? the there on Matt further what moment in the broadly balance seeing for others on you're the state categories hesitancy the pricing for to it Thanks, sort we're

Rick Dierker

Matt health about quarter say remarks, gets to one to overall elasticities we as our take and the I see I expected about continued we've we second. Really than Matt talks on we've the everyone assumptions as consumer. and in last – of of what a Yes the And said his back normal. for out course the prepared we Kevin transition and better I'll to to would consumer take XX% seen as the have that pricing, levels and XX% year on laid impact We've this fill now first is the volume. can

spending trade Our to gets normal. back

loaded back marketing two-thirds, Our one-third in is half. the

hitting be and there the have in shelves back We now concentration half. will

for a of lot there's back But tailwinds talk half so as staple. Matt our And I'll the the of let consumer. more about things

Matt Farrell

Yes.

question right? pricing far goes As in the that your as Is do we pricing is Kevin, future. see further

Kevin Grundy

related Any the more to nine you're being bit start what pricing ago? were state any of are for you propose, inflationary the demand, a that general to twofold. And push guys to in of even hard you what announced your do categories. months that then in now – you sorry cause and some than to environment six seeing give sort reluctant to Matt Yes additional elasticity embedding? of it's and you consumer, It's

Matt Farrell

remarks there But is savings. right thought now. said in my know get necessarily We are balance suggest Well accumulated haven't monthly definitely gas. indicators pre-pandemic inflation caught of the to wage rates look, of consumer more strong with would are and because The sheets the savings as are back levels. to there's a It's be prepared inflation. tank up I household cautious $XX becoming increases significant that to

So think of our we if there because positioned is value we're a downturn, well products.

thing going well as laundry And all number price we Sun those To single-digits. detergent they've you up of course example, across other brands. large price on us seen for some XX%. Purex, Of even to Henkel have high high X% give price taken a for price mid-teens. value number and P&G And Tide to take increases Simply on the color we've in for Gain Tide take were have is two and and mid-XXXX is we we product. in others one – And we're single-digits did and

until of we we're most again recent step-up, tranche quantify July. the inflation, in we taking another So see that which given will

and litter. on So that's laundry story the

we we're to they've XX% two up Step Tidy recently digits. Fresh increases and right taken rounds price another a first of single-digit and taking Nestlé now. amounted bumped that's Our already by and with round up took round single high high Cat, Clorox about

So in vitamins. -- raised you to prices we vitamins, if over and we're low and went teens valued then

competitors because more we're gummy as value X% to well right have room now we up XX%. the going So historically but

happening it's broadly. So

are split we in now of done pricing. So the had doing But bad. comes. other litter. between in we've we value done Rick and for categories. made do with couple in XX-XX, whatever and shape rounds the We've to our been competitors we're something good all -- and have a what too respect vitamins the -- think we We've said elasticities we're think surgical in premium laundry have because And done the watch we as strikes

Kevin Grundy

Good guys. Got it color, thanks the luck. for

Operator

line comes Bill with of question the next Truist Your Chappell from Securities.

open. line Your is

Bill Chappel

like early are half. Thanks I guidance. is in on first that Kind on surprise – Hi, guess as second the us I of the guess guiding understand down maybe to your tempering yet? would down you process? quarter, just kind of just in Was Was full international? details, without you is were thought the that understand Was most you're good all the this trade recover year to conservative major not the drivers just the it the year. I'm hope -- recession? the that be it morning. what want second reporting guiding when the which of it in of see I will back help just knowing view because of guess where trying kind the EPS you everything always the for peers

Matt Farrell

Is that question a choice multiple Bill?

Bill Chappel

C. Take Yes.

Rick Dierker

it's Bill, straightforward, it's Well. Hi, revenue I'll all. take didn't a -- range outlook at We relatively right? Rick. our change

improve feel pricing, still as annual the that overall the And we have ability range. net is to health consumption like anywhere land So we our of strong. within we

get true. revenue perspective better a true Orders international from well. get fill that's international So and will that's will as better

inflation rates that between back we at what, -- put down I couple through year. the because in before nine to but And of hey be EPS the we're the of just And just online assuming resin know the a ethylene we've the you million last half quarter said, the X% that biggest $XX the in year the we March of in space in adjusted that line was We now forecast full one of probably a we outlook all said top inflation. reason month spot going XX%. seen in way I spike anywhere years. the our whereas end end for ago to think and saw primary it's would So sound of

but because macro come Yes we're things? that what now. demand comes down, assuming other could that's down of because Now

Bill Chappel

Okay.

color. the Now that helps for

that you've more line like the is one added increases. that on price with on top Just

there your So presumably some top Are you brings that back is to line -- maintain, that elasticity would expecting it's it outlook. scientific? kind of not raise more that or

Rick Dierker

necessarily that's Well One, a the to be going pricing think of down happening two especially is had how range doesn't everything just continue points. range a up with improvement then conservative that's have come on before. easy now really. we've XX% by of points in with that for And we macro. mean things. because and a to go-forward it volume forecast to seen yes we're by to basis we big right it couple And a would of why we stay we the revenue But way in went XX% couple

Bill Chappel

Got it. be distributed to mean it Last expect you in resets up one the happen? past three resets widely XQ pretty again to still the over for would assume, to me. go. as I THERABREATH TDPs there's but some go I seems months further

Matt Farrell

bit They be We that for better brand of actually time. than over already. do were the in is we with little expected. behind grower this think distribution got a us additional to XXXX a a lot Bill XXXX them going us we XXXX But big

Bill Chappel

Thanks so much

Operator

Stanley. question comes of the Mohsenian from Dara Your next line Morgan with

Your line is open.

Dara Mohsenian

Hi, guys.

on So bit just The and a consensus bit we I quarter than a Kevin was to Bill's and in follow think up question. the expected also. weaker volume

get availability the the So in bit a still so any you on Are sort perspective April? through because your about consumer just in of just sounded retail perspective any thoughts as supply elasticity and or on of you're to enthusiastic that in I you you particularly pretty X% that and on there elasticity, more the issues March the of love seeing takeaway. relative chain-related? far chain maybe Is and Domestic that front? decline to wanted seeing move quarter more the supply sort demand Consumer US

Rick Dierker

Rick. it's Dara, Hi,

We when what right? I volume some was about that think bumpiness XXX-plus and we SKUs one laundry to of there be all in in transition, And means X%. the have tight X% to it minus compacted had down to was to down inventory And our came laundry all And we that QX, easy about one It expected mean? our is March. another size size. replace you business XX%. does due

fill period and March And so than we on April. for optimal now. that And of we've had recovered the less the levels news is good

-- that's So you're slightly why the but volume. of is terms in what we're expectation worse on seeing that's

Matt Farrell

out Dara the may people And in years. Omicron with remember had in the rock one you we QX my with And Yeah. than COVID we remarks prepared had resurge. calling two fill we more rates prior hit bottom month in for

Dara Mohsenian

just helpful. That's in And then Okay. retailer the on relationships US.

space. shelf done time guys great a have You expanding over job

now You're putting increases round summer. through categories of a second this of a in couple

chain You've supply had issues.

terms impacts shelf you and sort any So your space relationships, Obviously unique a how in forward? a pricing, environment and going a are retailer of of that pricing of curious there. categories taking lot just point the at it's for Thanks. but just any of that? just be issues today competitors if guys perspective lot and think you And the about for the there on beyond how the could rest summer of announced thoughts portfolio some

Matt Farrell

Yes.

from the with go As by transparent of beginning far category. of our respect been pandemic, in the retailers the difficulties palms category the as retailers up very with and all we've to

team the laundry good to litter relationships our impaired good or retailers. I the our through price say we're in go relationship. that now. I not with is tarnished relationship increases as have being say our said is would commercial well. sold and the right But So that recent our most would now right And retailers would far as shape Like with I one expect say we

Rick Dierker

to this really pricing be Matt in your then so. question that tranche effective next with or to July that's after And alluded right going just

us, the probably sizes adapt increases versus more we'll see to from pure You'll to and we'll see the environment. price pack but

Dara Mohsenian

we shelf then how of space that? where and any year Okay, you in in great. on thoughts think the the And should about stand US, the balance

Matt Farrell

I coming just in the talked got is our Yeah. and to this of morning distribution baby incremental. notably a launched XXXX we've No, we Sales mean product with laundry detergent in, new in Head of lot I that

So to we're going spreading on that shelf.

the it's one why we reasons feel we confident yeah, -- So, of the year. about

Dara Mohsenian

guys. Thanks Okay.

Operator

the line Rupesh Parikh of Your Oppenheimer. next question with from comes

is open. line Your

Rupesh Parikh

the for Thanks taking morning. Good question.

you for specificity So decline gross more I year gross with can margins? And the still of you're year? the expecting then do full Rick, guess on any expect line to the gross magnitude in just positive the margin margin exit provide you the

Rick Dierker

Yeah. Rupesh. No great question

what -- So we contract reemphasize and just and today said are that's kind we our in original contract. we of outlook

because yes, magnitude. entire but going QX of chains an exit an not right QX. very go we improvement going levels to we going I'm that, expect we're year fewer trucks. fill the supply to So supply We're back the still then and are and improvement. give as then in back pricing as year in order just would you the build we as largely inefficient have positive QX through be expect we productivity -- similar year I stock to chains and well. of in to And concentration, stock expect in QX, we throughout say look

we're So to in year. that's as good going a why exit we spot we the think be

Rupesh Parikh

Okay, I great. then guess second my And question.

your So expect guys the for do to Why press what brands? most I still release supply in all entering year in Like expect this of the you your for it later in of guess think chain headwinds XXXX? XXXX of be be half I wouldn't have back to your you issues brands.

Rick Dierker

year. release, that's end at the the we the kind type I of levels of be -- to in wording No, we expect just a really by pre-COVID mean

Rupesh Parikh

then question. And maybe last great. kind the of Okay,

growth. by segment? Do organic have growth on you Just expectations organic updated

Rick Dierker

is Since and our company pieces. in no there's the the outlook change. our outlook same change to three No January

Rupesh Parikh

Thank Okay, you. great.

Operator

Sachs. question line next of comes from Your the with English Goldman Jason

Your open. line is

Rick Dierker

Jason. Hey

Jason English

me letting Hey, in. for good folks. morning Thanks

it's narrative bottom improved and through your you're progressed kind the constraints mentioned quarters should of the actually the the quarter, seen the later way? supply suggests in what's the volume that we supply the that unpack it Like recent sounds of a other little almost it that Like look you terms of be the you bit? So going probably most lot sequentially as and a time. weakest trends terms we're eroded It trends long worked Can seeing Nielsen very volume why through quarter. earlier you're difference data chain that off data, inverse. like is But the a when the the in when in constraints. you at of point erode we've in of

Rick Dierker

it's don't sure. really with volume really Rick. I laundry, in or but came not to know quarter was it for I for has We the Hi, Jason, if down right? down answered Dara Our Yeah, would And through XXX have would we said We volume But new all XX% we for for as against laundry of have the beat our I X%. orders guide. bottles this transition it go X%. do and SKUs. guide had compacted it. these

every goes has complexity. up you other execution and out slotting that and because flawless, typically then in that's lot As a the retailer SKUs, day. a not wanted. SKUs XXX XXX But you're problem that product was that to think new the we come inventory you're a there's talking we couldn't no about When and the of of two or when build with three

And so we had hard cutoff dates.

even were in And would and in business, in April. some in laundry than our of March so we want out we stock more

why our recovering. that's biggest or of we went we're one I laundry levels that why as kind recovered for of you laundry example weeks. as week. XX% have of this on four of that for we're you out is so stocks fully three at businesses through know And period that, a But And supply don't fill see that's bumpiness nuance at

Jason English

isolation, the in go And magnitude rest of the a time? comparable at category did the compacted is you same or

Rick Dierker

of a know lot I that don't moved And XX%. competitors we between had months previously No ago Yeah. anywhere already, X%. the maybe six mentioned

XX% we've moved this step do that and is and but lagged we the more move, so for we in And future. may big us

Jason English

advantage concern So your advantage fading. the you And in over you that a same it's you've bottle now number them for a been go shrink perception relative had like there's is perception. price isolation of always a value months, like a last price and price if

and the now market that value you of are the Given as to a assessing sequence perceive you're that out you lose risk be share consumers or less result? now you a volume how going attractive

Matt Farrell

to we've an it, our way maybe was turned of there but I think a about think the historical is to as gaps concentration. advantage, result

called So mind high-single mid-teens. we going be up that to taken don't have the issue. to gone think Henkel digits like out an I of in Keep that's competitors increases price some the has that

So in there's a right the lot of now. category movement

consumers' change don't I relationships it's value. the going So think perception the of to or

Jason English

Understood. Thanks guys. a Got it. lot pass I'll on. it

Matt Farrell

Okay.

Operator

question from line the Chris comes Carey Fargo. of next Wells Your with

line is open. Your

Chris Carey

Hi guys. are How you?

Matt Farrell

Hey.

Chris Carey

versus in guess the full that seems volume just I new about more one the coming pricing you're And X% least it announced I just if out to pricing specific, range. pricing fair? being QX is a you've bit for So just year, is suggest similarly through maybe in and elasticity embedding so price around, the in volume and already question that think pricing would just the from that then, it X% going range shake at that

of the this characterization? so just embedding chain And just catching still is competing So much the dynamics. elasticity I'm as I recovery trying is as up? again volume frame fair then, those a laundry pure secondly, is elasticity or And how otherwise. guess And -- supply that in to is

Rick Dierker

but Litter. we just X.X previously plus into and the pricing piece what three I'll refresh now was volume I problem, X.X won't of talk some said how We the we Chris. it's course year. stores hardware had No elasticities price. is And your closer I'll Yeah. This down his it's alluded had that's thought XX%. said to And full I of Care also is quarter, Fabric to the and price said Matt are by get those previously. in volume comments, about -- and And it I was our foot XX% traffic then, about on one minus memory -- on of Rick. on or the we would minus revenue new midpoint got organically. of the range probably to shopper volume the DIY for so and the or seven plus say,

business So will WATERPIK that Shower we be and down well. Heads the as think

So to actions we minus because favorable we've those of the price and pricing three. on taken that's get the also up the course mix. how is of of volume And then

brands the the personal portfolio in Our well. care care doing a of are personal lot for the THERABREATH portfolio

Chris Carey

helpful. line expected of the clearly gross Then follow-up maybe margins, margin rebound one That's basis gross to in XXX, year very around and tracking just full is the inflation questioning prior points for worse on, just QX. XXX

environment I year? think a Thanks to amount this into that there sense. does given that year? tight supply the accelerate savings And all makes the accomplish are just that to thing of this lot. perhaps just be to a opportunities equation the factor going you're chain getting productivity difficult more or How is

Rick Dierker

run say And during it just reason on we would our case to it members some time the throughput all productivity and to capacity key year. as rise line really the to get we'll these I capacity because COVID our And plants builds more Yeah. builds of why is unable those our do those the of that's is improved And productivity qualifications. times, year. the and trials projects. some builds tight times, have throughout throughout because, front, increases were it just the remember

Chris Carey

much. so Thanks Okay.

Operator

Your next question comes Olivia James. from the with Tong Raymond line of

open. Your line is

Olivia Tong

a of things. want thank I Great, on just you. couple follow-up to

cost pricing as inflation already that take is first the not or that we laundry pricing? you'll year the how And the you us some evaluating on? does covered an the of to forecast since in were inflation be and productivity On litter. that go of should you see it, First gets pricing the for be incremental in that supply same updated that planning this -- as the year, last of maneuvers talked is you then constraints about chain those terms levels, pricing current much you're last that and you mentioned, with annualized categories of basis by right initiatives that sort playbook different thinking now lap, combined at to

Rick Dierker

Yes.

So of those. try answer let to both me

So pricing laundry XX% how and we would really was first of really our the is, versus plus step first we've question tranche. And just litter back started. of next I does we years that your all, the say, inflation recover price the at news next this a And this good looked two did COVID since inflation. took big and increase

largely. have year we exit the recovered productivity cost we inflation pricing all As and will the through

your What So that's was Olivia? good question news. second

Olivia Tong

increases assume because the progressed? progresses last with to -- Should price as of more you'll the litter the year that more laundry as year that categories then to potentially continue of we were categories year. rest cadence pricing first and the around the just the evaluate the to went Yes, go respect

Rick Dierker

macro the forms I to all another well. at That are think price increases the But look drops just increases and we're earlier and other unless there's these on inflation shoe what Yes. list price going pack and sizes that both move environment also we was, on consumer said as And again. then depends different underway. two

Olivia Tong

just in then X% in it. far helpful. that's unprecedented of this Got pretty model terms X% in pricing as And quarter as consumer total obviously goes. That's my back

Those are realize still the unprecedented that capacity inflation. kind about relatively price of or to plans are optimistic big. influence pretty that longer just course were do more elasticities more And things future part? a all consumer healthy curious this experiencing macros a you how of of I'm tight that, term, of talk Does make to playing these achieve levels your up able environment that it you of your we're kind numbers that So, on also given you pricing. might

Rick Dierker

Yes.

new You're talking ago COGS but also about talking our X% and X% that's price of a year year average, as this well. on you're inflation outlook increases for about

has category able and of that kind ocean of I give the great been of brands us of this in future. to there's think and we because numbers all global it's more confidence entire but are relatively price that competitors we've It's price. big inflation two, any are big, or risen unprecedented price straightforward, because our when every it So taking and levels macro inflation. and everywhere number don't been one would do the

Olivia Tong

that some lost their issues international sort to just happening what's the you they of to of like in terms Thank terms that business just sale? or are depleted chain what's supply pulling in Got of then it. curious to of And you. or inventory it more other kind the -- Is consumption? consumers just players less lastly lost? going of happening Just

Matt Farrell

particularly definitely with strong in dependent in No shelf Yes. Remember we retailers. cases, countries. it's sales have and -- there's you Group space. we're distributors Markets and distributors our can upon to in many Global some But the some lost lose very interface

two are supply get we quarters long once to in term. So, back hurt we us going think not these

Olivia Tong

much. so you Thank it. Got

Matt Farrell

Okay.

Operator

Your Andrea comes line of next question JPMorgan. from the Teixeira with

Your open. line is

Andrea Teixeira

morning. Thank you. Good

you quarter. heading it were million obviously, believe additional XX% hedged up on following XX%. makes inflation I the into like you the inflation, I your So And $XX saying thought – us hits

you the hedges term. roll As how we be should thinking longer

have a go laundry on point then 'XX? for also that, the into you clarification just on the remainder So you as pricing that the And in and as additional side. fine was pricing in litter means XX% take to hedged that

said in Thank then digits I we you to it's or then time, last that, litter single of So, and side update just compaction similar also you most And you. now a laundry said the you the you're or you think June, in mid concentration of on high the year help at using early expect both? magnitude -- please? would can

Matt Farrell

complete. that exercise we're to so the take question first. not only is We're -- increase I'll your second price the only now Yes. communicating that retailers Andrea, – right

everybody So we won't in increase until magnitude litter talk be we updating for you the to price and of laundry the July. on

Rick Dierker

then that And diesel diesel materials hedged comment the of example. on were lot this we through oil-based inputs right A and within -- raw yes we and hedge, XX% that as your the is flow you're other have year. costs an Yes. on

we lot in XXXX. -- have specific those a We hedged So not diesel. times of do have just diesel at hedged

very go diesel of all that that -- the products supply quickly of lot a and through the chain. then derivative oil So

the basis that. of really that's So

Andrea Teixeira

understand as that that And level levels and had And I to XXX down to And a trickle is has all just SKUs. manufacturing the end pass-through? also follow-up a as service these the So can and exit service top the and increase probably you be that expected? range? line you that's why you the keep quarter how confident obviously us update feeling on that reason feeling line improved? can levels the you as that service third-party the top that obviously, you And then is obviously you shift -- the a should you

Rick Dierker

costs Yes, especially raw that that you're manufacturing would would components costs they for third-party also to Those the right. have have. are include materials

fill our his eight levels was then in quarter bottom the year guess our last that Matt that's impact the for remarks And said for So that. quarters. QX seven of full or in best

bumpy transition also for in said had hit So And Matt issues we but in month many it as we we year. more had quarters was one below XX%. laundry, out was last that a of -- than labor

And key So think the month some hitting the mid we're net hitting of we again XXs in brands already. for though positive in of the is to are to it a on is end high April. XXs I

back we're chain we the end So at of a tunnel recovered perspective. light the being and that's optimism. lot why have the supply a half see We can of calling of from the

Andrea Teixeira

on. Thank you. I it pass will

Operator

of Your the next Barclays. from line question with comes Lieberman Lauren

Your open. line is

Lauren Lieberman

current morning. Great. was a your question says at it was commentary in like question release around But less pretty combination quarter. the chain also that least clarifying explicitly Thanks. and supply effects One feel Good elasticity of lot a a the volume I elasticity. in because there's the then in performance

point? get in don't some we're that's course. levels hoping just companies expectation clarification just both? are then of that product frequency of that given I'm promotional hearing on the half like about normalize why that any I year. to of thinking And was I the the curious So just back depth feel Because terms from something in household inflationary other environment, secondly, you

perspective on you. Thank So your on point. curious I that was

Matt Farrell

environment first. not heavily Right products are really be promoted. household Okay. products because talking now I'll about should personal generally take promotional Lauren, care the we

So it right XX%, laundry where sold-on normally it's in now detergent if detergent. say at if at laundry And XX%. the The you mid-XXs. we is liquid around deal is and look look

-- sort So Simply. bunched. brands the on basis if & the tightly are Hammer, on the brand sold XX%, a Arm Tide it's XX%, off of look They're And value all historical Purex, levels. XX% at you kind deal. of

big promotions So price - while you primarily out introduction And increases. were lower It's supply shortages. Tide. XX% And actually. XX promoters now is a due over for the it's point as there the of frankly to

And So levels you're may want But add to anything it does to Rick prepared it. if historical right question? for on you this year. return it we're first take not that to

Rick Dierker

the you But on And, add think that think of in some walked through We there and lags one. rise elasticities attributes we days to of laundry on think else pricing we always competition, contributors But pricing these I chain on all implications on volume price when with question demand, going supply, had the are happens I course the different measure and two a as and harder with things. all was bumpiness to it Lauren, to combination. volume the to just supply nothing No, those quarter. the it's well. think there's

some side. is the then is news good that hope the year elasticity stuff go through of on the we we're So the price the left just chain supply as with volume improving and we really purely

Matt Farrell

And on Lauren, the color about litter. talking give little too a more I can you household just

& it's around now in the And QX So well Dwight out if teens. sold Church intermittent Clorox, so stocks. high typically supply of right at Nestle, everybody you -- on in deal problems look XX% it's had as litter and as far

promotion. low again So

to year roll the does if I it So slow back for of a be said prepared. come it remainder we'll be as yes but for that probably the will before

Lauren Lieberman

Okay. Great.

QX quarter in to itself the but not clarify seen So look, businesses forward have in what elasticity? you already just the again in

Rick Dierker

raised expect our Everywhere better decline second. seen If laundry, expected. make been we In than price say that we context X%. were we for elasticities by elasticities XX% volume we XX% of by historical. X% impacts negative said we to have we raise up -- been have price on going a negative our comment to we've to that has it elasticity those volume. We I'm

we've X%. than XX% been XX% In that was we by mean said, that have elasticities would up if price our context that to expected. So better of

would down that volume seen would X.X% of but have elasticity, been by So if we've negative say our we we expected. I X%, price raised case, just every by volume they've be in would mean was that, than better okay? So price, it, up

Lauren Lieberman

Thank Okay. for the you All clarification. right.

Rick Dierker

right. All Yes.

Operator

from comes of the question Steve Bank. next Your with line Powers Deutsche

open. Your line is

Steve Powers

Hey, guys, good morning.

And But issues. place transportation you early on the just world severe. more and the some bigger just it been feels in from least Obviously, the out the factors going guys to impact of were calling of back in extent, production a everybody parts materiality I little had they've of supply think at perspective picture business about perspective. is Just supply and bit terms round different a year. a my multiple like in the issues

leaving about been for the multiple on You've quarters now. talking table money

suppliers path just go So of balance optimism your forward, supply are is force kind versus to the exists? third you the question to caused and you balance change your parties, chain all in-house it or diversification holding the or just it acknowledging of year on of any I structure has guess at as you of the just, rethink over the as contemplate

Matt Farrell

there's telling chain. another We've No, whether major what resilient hear yes, supply that And or in across be we're going do to qualified dozens of is the chain. and because new our and folks Steve. have other dozens not if -- -- so we've there's more made no some supply pandemic right someday or a we good chain, And in our black to co-packers suppliers, that system, event. swan supply there's to a changes question, you you'll that's shorter trying now have talk

to prepared that. going And going over feel it's more ton said past be our even than in. of created of years. resilient -- teams we to a out were of work got But couple the we just we we're we like when for for So, this, we're come

XX now some So which it our in the did weaknesses cured in structure, last we've definitely of the months. expose

Rick Dierker

months just And third-party of one Most improve. is fully those we these we to material decisions made to lot been have finished raw haven't or we've ago example. the integrated vertically add raw good because XX had and isn't manufacturers. most But because two of outsource all and this adjust -- were of we is good choices that, key news or for supplier to a that issues our

online. and more of we're so coming month more these every And seeing now

our it are that's why rates why continue. fill April in again, we expect improving so So and to that's rapidly

Steve Powers

Okay. That's great. Yes.

So the built been overall as now here the in real that chain strengthening the the the of you correct kind redundancy has changes and supply -- kind of time of issues.

should system you business -- when are online that whole the redundancy stronger back have things so into and be should also And XXXX. the back online

Is fair? takeaway. I that think that's my

Matt Farrell

goal started we're and we Steve. the going land, was where That Yes. to that's when

Steve Powers

Okay. Thank both. you. Perfect. you Thank

Operator

question next Grom with comes the Peter of UBS. from line Your

line open. is Your

Matt Farrell

Hi, Peter.

Peter Grom

guess quarter So Hey, the specifically I ask XQ well? been And earlier comment exited Hope missed are through around morning you the has throughout the organic performance the guidance. year, did stable is good doing wanted But to more Matt, as acceleration an about I maybe discuss led morning. comments but trends et quarter? and could just the the to portfolio's you release cat the volume in outlook? that just in saw I during as or Hey, wondering good you heads, And maybe it this, discussed if everyone. versus recession, that whether that cetera, in detergent, concern of in the some some I know April you of to giving shower a mix I revenue you then price trends largely of litter, these recent you versus a value you bit guess.

Matt Farrell

been than faster detergent which say, had we with value then kind our saw of orange quarters losing reversal premium trends about the in in our recent. value QX box, to of we're is would remind for trends is we flattish. No. It's so prior remarks to I premium our are and moving you, which box seeing And -- the ground litter, with QX, now trends. and a is that's is now black still -- what just this many

the transparent And we'll thinking tell our is very these that you be ahead. with went on mean seeing. we're we're commentary may influence what does recent So, to calls, yes, generally what and I respect

it, money what be and alert few more months -- is that could we Yes, want on to Now are to we're to it but part going have now people did of we're it everybody more products. traveling just versus where be seeing. could a spending experiences

Rick Dierker

in The in think, I going look going in QX, the lot to then going I X% full down is again volume that all in QX, mix then volume price be of of midpoint is would April some of perspective retailers we some X.X%. And actually on concentration, of XX% a price effect. still QX, terms to pricing way And we I saw say, right? say, early bumpiness like not a because were a to the tranche is from around because last it's be quarter around saw laundry, would in that full shelf. organic growth

above QX. be it or at So will

Peter Grom

you, Thank Okay. so much.

Matt Farrell

Thank. Okay.

Operator

with Citi. Wendy Nicholson from comes question last Our

Your open. line is

Wendy Nicholson

just long I about small VMS really Hi. call I business. the had I question a has time. the a gone appreciate know on

on a surprised because have earlier of I maybe wasn't mid-teens pricing taking I business. think cost And margin double-digit gross you ingredients would that the that large. business that thought you or on me, as were said higher that's

increase price in high? I -- a one number like still interested know secondarily, small business, And that So was it. just it's then that is but the why and

don't be much of more Given that it I elasticity you to I the demand more it's Do in I need so kind expect VMS vitamins of discretionary much. as as of product, may need a need laundry detergent. space? see much as as don't Thanks

Matt Farrell

up holding well. VMS actually is

is demand high. So still

price we've low-teens have -- As the far as to raised price historically, value as are been said, still will increases. and competitors with our going XX%. gummy well up what these -- I And that X% and prices be the goes, the

vitamin transportation to and the business. up. all impacting ingredients had And are inputs we've So move obviously yeah, and room more costs

of points. And is far And different strong. a trend. up The has logic of it's sticking. category the label down on was other quarter have now gummies category upon that outside it guess no wellness where US, share declined. consumption XX% hygiene product it's comment penetration a category to but I was business we hygiene And a time. It's pretty is private picking sleepy for always the QX. Despite still And for nasal as up. gummy up, this of you the categories as STERIMAR, have the and be was up much But XX% first business the price. been our has so our in So Last category have bigger than is was a appears is the once year like healthy. other basis XXX the also right household XX%. Demand tailwinds raising it's we nasal

category think is strong. yeah, So I the

frankly issues now. supply are issues Our right

Wendy Nicholson

That’s very helpful Thanks it. so color. much. Got

Matt Farrell

Okay.

Operator

participating. you. concludes Thank today's This Thank for conference you call.

disconnect. now may You

Church & Dwight (CHD) 28 Apr 222022 Q1 Earnings call transcript