CHD - Earnings call transcript Q2 2022 | Church & Dwight Co., Inc.

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Operator

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

Before we begin, I have been asked to remind you that this call -- 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 Financial [ph] Officer of Church & Dwight. sir. ahead, go Please

Matt Farrell

with promoted to morning, about call us everyone. lot when turn we'll I'll got got results. done, the but then Rick's Dierker, And today. years questions. our anyway. for a I'll begin about. talk Good Thanks call to the review as I of seven QX over CEO the ago, We a Rick So open for And joining CFO.

was solid with So was Organic for X% quarter up QX revenue this line X.X%. grew Reported in outlook. a our And X.X%. was $X.XX. EPS sales us. to The was adjusted X%

Now We we levels which and rates in this in that marketing. grew but consumption of outlook, some cases, in June, XX% of we and compete on our get by higher to consumption the Fill was to in year. than top year. gains XX last our categories have lower was historical due the big to back to of expect end improved $X.XX XX

ARM Batiste performance, And zinc And Regarding categories. in HAMMER and of & growth power six double boosters, ARM gained baking consumption we litter, ZICAM on TheraBreath HAMMER brands. digit XX ARM HAMMER soda, experienced our share for clumping XX scent name our & dry them I'll of shampoo, we you. mouthwash. & supplements brand eight

good a story. that's So

sales, was healthy. QX, a In of online XX%. are shares total as Our sales, percentage

And And Since hit increased we the as -- announced to our a sales price XX% shelves. XX% of early continues we to round and just be But continue price that the Laundry for up and climb. already increases through of sales. cost combat the mid-XXXX, increases full percentage time inflation global have in to have announced increases did at same we Litter second covering online portfolio. Our be sales year-over-year, XXXX, of inflation. price a expect to we to XX% year online above

since $XX April, in incremental are we expecting spoke So we new now of inflation. million to you costs

inflation full back $XXX since cost the initial is million outlook gave way incremental our we So cumulative in February. year

with now offset Now, million lower We tax operating the incremental headwinds income expect outlook. our inflation, caused a to X% year rate. full currency much higher EPS growth of us by year-over-year $XX combined

Now, each I'm comment going on business. to

First up is business organic grew US consumer by sales which X.X%.

at market eight numbers, had of we gained I XX brands as before, power said as Looking shares, our share. good

Looking the marketing our will our ahead, end, we back positions in as market rates expect by spend in fill increases half. and improvement promotional and even year further share improve

at categories. Let's of few important look a the

Let's you start with Laundry. The begun. give has trade detergent numbers. down to value some I’ll

is grew QX, up yellow which For consumption category, value growth but in QX, and shampoo the box, detergent premium XX%, in category was up grew grew both XX% X%. value grew The double box, liquid our QX. consumption XX%. XX%, was during black In example, is which Litter, X%, while category Batiste the dry laundry laundry our while had laundry premium digit

in Over if have aerosol slowing actuators. growth the is been sequential of not higher category in for difficulty cans Vitamins, Gummy Our securing growth our and the would quarterly down.

three For been X%. last most and the recently, the rate XX%, category growth XX% quarters, has

with the our growth consumption are is ability And Simply turn we in fill category we grow. last Delta because which to QX. to variant the negative continue hampering year's rate expect We from QX lapping in spike struggle the to

mouthwash. four delivered ZICAM is ZICAM other and this strong brand total share growth. TheraBreath acquisitions we with grew XX% recent most are of in great which TheraBreath XXXX nonalcohol mouthwash to acquired TheraBreath two number solidly also Our quarter. in results recent the category. number is XX.X% a and points the consumption X.X performing of our had December wash is alcohol-free math the quarter well, acquisition.

was cold in You shortening to were the ZICAM a in in one brand masking share. segment remedy we with of social and the year ownership in XX% consumption number and our may XX% distancing. We due cold acquired December X recall, ZICAM up of hurt QX XXXX. is

the to Now is be the what the regular years recent ahead severe US the year, now. looking rest flu in right based is of hemisphere more to season on southern the than projected experiencing

international chain growth GMG in business. Next In significant which international. is growth April, Europe, quarter delivery is and than business issues. supply less level spoke by in lows to primarily proved a our Batiste we Those we we QX Vitamins you, Despite of in QX, growth and of in X.X% disruptive organic and as up continuation our to the actually anticipated. driven in expected across disruptions, experienced the the fill business QX, such and we in Batiste export flattish when issues delivered Canada be

our levels on weigh issues However, fill and Markets continue delivery Global the to near will in term. Group

up Next Specialty is Products.

X.X% higher growth, volume. by organic and Our both a Specialty with quarter delivered driven price business Products strong

population of spend more learn couple to only and fair to Similarly, minutes the flosses. consumers and to the demand household WATERPIK to It's discussing discretionary Also is want a US lower of I showerheads of down demand-driving say penetration we for outlook. not see water full on press Asia-Pacific flossers. flosser to and in is projects, has to continue a brands is a to as got less consumption day. lot We launch discretionary as yourself lower COVID every consumption health and due still an lower flossers WATERPIK result gum of year water and our the for purchase, a activities trade having away such US is decline are flosses there WATERPIK expected lockdowns. drive has invest as they revenue XX% Now since our of impact times. completed in this a gone those during

prospects high for sound. top growth line, is long-term WATERPIK XXXX. this has confident since averaged that that them business we in growth are Now the a single-digit we're And acquired

the that have is brand of manufacturing, other 'XX. experiencing first were consumption, our new The have absence until have launches largely that and for to due new lockdowns the but beauty product category. been end of fast-moving in lower this the half discretionary the impacted we products delayed We're is FLAWLESS. planned our China

Now, consumer, label to few households are the dollars rates interest on rising risen, tamp a want supply. the trends, squeezed and And to make choices to making their at getting inflation. spend of go private wages high, ability and our to consumers while innovation multi-decade and I health minutes the are is have a Innovation are further. down

four laundry up detergent QX XX, July and detergent is premium value X%, ended is liquid category value the I out up call, down called think segment. value deep April back is during strengthening we our the to latest In X%, X%. weeks

So trade down we think happening. is the

of numbers This category for the to And down also indicator toothbrushes. time toothbrushes, was The trend power had major rechargeable was WATERPIK them this X% X% and down flosser care. retailer a Here's contrast in trade down, category both to impacts in has are one and another QX. held illustrate in to SPINBRUSH, in the here point trend. QX. few and battery-operated up the which We toothbrush, an oral declines manual well strength early of in

portfolio It's important we're eye expect perform we and other in our to is a environment. difficult point to value, XX% an of keeping well So these and trends. economic that out on

box value Litter, our is vitamins, also detergent businesses, And and Our in valued. products. orange are largest

what coming. may So positioned we be well feel for

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

already the in highlight personal household care success at laundry early saw categories. to & Baby a have achieved you of of ARM category and As innovation the share release, I strong Laundry HAMMER the Walmart. want which a XX% lineup has we across Detergent, our baby of

condom I'd litter which is of out in the the mention recent of already is we highlight to at to SKUs I RAW, Ball. The other which also the number product market, a our lightweight call new is launch XXX Hard like that sold TROJAN want Amazon. now thinnest six

We expect, fair category. the share litter this to time, our lightweight enable will of over us get

the owners unique because we ultracompact For today, clumps. the hard It's named call the ball it a on experience. consumer cat quite of hard

below of we bottom Omicron may when rates supply, improved in you with to dip in fill to ability QX care be business the news saw levels track July although continues The QX regarding we is recall, rates XX%. end personal show XX%, the Now near of by resurgence is still side to historical the lagging. to our recovery the good fill hit We're the overall on improvement. fill high-margin our and year,

to We outlook revised our innovation have full rates, improving strength healthy several in down value, trade product new and reasons, in acquisitions. confidence recent year consumption fill for our

do well, hunt promotional closing, times, our the key TSR-accretive in have in lined two-thirds advertising and and second expect good we spend and events new continue our In year to support, brands of half, portfolio for of to second the acquisitions. we we up is in concentrated full half. bad both Regarding

QX. details up Next is on more to Rick give you

Rick Dierker

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

right Second to Good primarily the business. the adjusted continued were Matt X% due top-line line is about spend gross personal $X.XX, margin to better was revenue below our EPS I to strong fill $X.XX The X.X%, outlook. for show up company. The to hit quarter $X.XX market impact from sales rates will in up in was outlook was lower fill in overall due marketing year. rate so our currency. demand prior our consumer X.X%, segment, and to news the a go than and our $X.XX Reported Organic quarter. for improvement QX. for reflecting flat drag the continued with XX% was normal care reviewed

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

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

$XX Moving advertising second and be year-over-year. to improves. the million Marketing down case two-thirds was Marketing of expect net a expense concentrated percentage of was X.X%, as fill marketing. in we to half sales as

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

activities operating to of due six decreased from cash working capital cash XX% the inventory levels. For months million higher by higher lower first $XXX earnings driven to and XXXX,

line on back We cash expect inventory by to as of June And million. year in XX, hand $XXX was end. get

our FLAWLESS. for decelerating sales COVID QX, business surge see and Sequentially, adjusted sales to XX% per retailers we as Those from the inventory SG&A, due gross coupled we've and Adjusted a contraction. organic plus of a we reasons, and the growth X% heard issues share, products growth VMS margin EPS QX ahead to is X% approximately a are all expected comps QX comp decrease marketing be higher year last Looking with approximately versus support. year's X%, and normalized a and to in two year incentive we consumer such from growth. discretionary promotional as of QX compressed tightening of This to WATERPIK EPS. expect is levels is largely higher from to which reported ago, $X.XX X% our ago, to

by X%. to incremental expect in growth reported growth be now X%. X% We And year the QX drag driven an prior now be the to now for investment. to sales year. to in higher year acceleration of expect onetime full We the We approximately growth organic absence outlook offset of of sales EPS expect to reflecting to organic QX the X% from approximately currency full X%, decline

pricing, and cost the time inflation expect we year, to continue read we now offsetting higher productivity. our in million which outlook. million for release, than of compaction, plan with an a inflation incremental incremental longer you April on is As the On $XX horizon, $XXX laundry

anticipate continue versus reported by and We gross productivity. be full offset margin is down XXXX year to pricing inflation partially as to

spend half is We lower year driven headwinds. increase of in in and XXXX EPS now to spend lower the improve by We to continue due year. year-over-year sequentially currency be full to expect gross to expect now to in XXXX first QX. and expected Marketing in be to incremental flat QX adjusted margin the the inflation

continue full tax to to the be expect rate year We XX%.

capacity. down in $XXX We CapEx perform to million, from is plan full cash we year operations be continue a manufacturing environment. as to In the $XXX $XXX approximately million we full approximately volatile our now million, from expect year closing, continue expand and for to

And brands Our share happy and questions. we second supply fill expect again performance I with our QX, gains Matt we improve. improved be take share further levels chain in that, in and half, in market would invest as to any and the

Operator

Jefferies. the And line first question [Operator Grundy from from comes of Kevin our Certainly. Instructions]

Your question, please.

Kevin Grundy

me, morning if Two Good for could, Matt. everyone. Thanks. Great. I

So probably bit little I maybe a morning. call consumer got practice for as think than some a your this well. calling the probably earlier you've peers. cautious more been off category down Everyone on of slow They're

you some out asking categories. to without of be So Matt, your discretionary called more redundant, you

You're it Thanks. the product for in the year? in your changing where to and -- out Maybe could your your outside and down what portfolio also you trade scope underlying expect out. calling growth rates just maybe within further category terms see a about talk exposure And guidance about the you talk you laundry follow-up. the of called of then underlying

Matt Farrell

pretty Kevin. It’s broad question, Yeah. a

As start the categories discretionary. let's far as go, with

due trade flossers FLAWLESS both the But essentials, of absence -- XX% related Trade everyday the that about new down. were our to products also struggling to if think but XX% portfolios WATERPIK both mention portfolio, of I for discretionary are our So only water you our products. FLAWLESS. just did for down and that's

So, call, it's spend do they because have lot of it the on whole we products year about the we an discretionary had not although time impact story. and full a talking have --

growth You call continue categories rapid FLAWLESS that half. bit. have, we are for a in and in, of WATERPIK little out besides down to Spin I in few I There second that had a example, and mentioned we're like the our do was we of XX expect brush that categories that XX

-- others was also depilatories else growth. that saw everywhere you you and gel, know you in one as those As soft but another quarter and the categories far oral saw

Kevin Grundy

for is My follow-up Yeah. is probably probably Rick.

offset, talk have environment Just in is front? The thought the your lean, of FX in challenging And of you the terms it's gotten clearly then of been historically, cost pass guys, headwinds? about headwind, other a productivity can on. run offset still costs for to not here the you. then terms the it well I've to levers pretty nevertheless And on constraints outlook. Thank but pull can but I as big worse some EPS headwind pricing

Rick Dierker

Kevin. Sure,

So, example and a litter as tailwind. laundry pricing perspective, be from of second announced an round for that'll EPS we've a

do half fill would the care, levels low tailwind. returning XXs to in is a be a we to half. personal starting quoted the fill support a to categories We That's will promotions, down like in tailwind. tailwind Our year how Promotional have the the will the from think back because about normal just a first levels general trade didn't in grow some normally of do in back that Matt laundry. numbers segment. we on and value there

for we're reasons we those that all think well EPS. So positioned for

about also down We of big, timer's and but QX up some in investments those lapping is also is is we’ve QX one that talked QX big mentioned, previously.

on true time quarter, do So I the talked get that's because and in last last do so qualification Productivity, phasing early to that's and even side. to break late productivity an we year, to think hard productivity this in efforts. about line it's go to any question asked type EPS On Lauren year

true. it our it's more time And quarter, so continue year. back to then we said and levels, we to at at for going It's the plants. as last to more have right productivity we'll build the fill devote capacity to and have And still

Kevin Grundy

luck. Good guys. you Thank good. very Okay

Matt Farrell

Kevin. Hey

Operator

Oppenheimer. comes Thank And you. line Parikh of our the Rupesh from next question from

please. question Your

Rupesh Parikh

for Good taking morning. Thanks my question.

category. So, want back go the just I gummy I guess to to vitamin

growth. So, slowing you about guys talked category

to that then is you'd do to When full So, expect rate be? secondarily, driving you like being lower it still rate back curious what's fill growth? your mentioned to I that get where And was your category you challenged.

Matt Farrell

to is rates be, XXs fill it which the now. in mid back the expect the by Care the be of end of where Personal ahead high is should year, to Household right We Rupesh.

Personal course, stuff. Of is our Care higher-margin

the that's we're most now. right the So, one on focused

Rick Dierker

Yes.

for on Personal July. you had on portfolio. give to month fill XX% we Just the we Rupesh, QX, in rate the right, low example XXs the in an were Care In of within that,

into we can number. rapidly have So, we -- visibility that improving

Matt Farrell

keep gigantic in and off far in grown Yes. vitamins couple in of growth And last really years XXXX. you XXXX you've mind, if go, as with as the base the

comps the variant, spike growth just last the the because a because It's although of -- quarter So, year QX down. for of rate Delta year-over-year, was in the slowing huge is of QX last year. but

So, consequently, expect tough that's negative we it year-over-year. really a comp so and to consequentiality go

Rick Dierker

Yes.

As quarters and the an The QX, XX% QX example, year, QX. last XX%. of Rupesh, the rest category grew QX grew

-- a of just more than--. it's comp So, issue it's

Matt Farrell

Yes.

Rupesh Parikh

Okay, that's cost continue. side, pressures helpful. obviously, on then cost And just the

peaking right you to like you of these be just And cost if the year? Just could maybe just roll could the some based over? your on next your then for color now, any pressures look to sense balance risk see and outlook of -- cost more visibility the that pressures on forward year, maybe the

Rick Dierker

Yes, I'll leave you really. thoughts with two

cost we demand On year. think side, We will as comes next down will that think down. come inflation inflation only the there do be

a recession, in so we economy. And slow enter for we demand start into macro think that to if will the general

we're So, you hedging usually, would year I Hopefully, from be, that not context. perspective commodity XX% for at as a by some don't example. hedged we now. an We're know, gives all -- next

Rupesh Parikh

you. Okay, great. Thank

Operator

from Carey Thank Chris from Fargo. question line the you. our And Wells next of comes

please. question Your

Chris Carey

morning good everyone. Hi,

Matt Farrell

Chris. Hey

Chris Carey

phasing for that? in just follow-up. really understand expecting So and And just is that get the and expect have you trading relative the comment recovery QX benefit to headwinds confidence accruing to Just talk -- that, you QX. And versus the can a really on that versus driving to QX. specific down reoccur improve a bit promotional volume within whether that you specifically Do context about a perhaps maybe and now then specific you're will on we incremental trying that there snapback QX could the you're year, really I more in plans not expecting QX the you? which some I'm the trying in call what's are in QX. to consumer QX, to in on QX QX, have

Matt Farrell

Yes.

a are there Well, Okay. this. of influencing factors lot

fill example, for improvement, money the level the several leaving So categories. on we're in table

do do to that to QX. from personal that true we gets fixed, we've And back-end care that on think more that. we're It is particularly loaded So that than going side once QX the the down that's benefit place trade continue the got economy, think both We accelerate. the call or trade and QX. will deepens and a people what for that recession as in advertising QX and some recession

So that's an it of element well. as

out I second calling the you're So mean, levers the to half. respect right with

Rick Dierker

Yes.

Let me you to some numbers with give go that.

our So for number in guide plus X% which X, a QX. X is to QX organically implies

And down We Matt as is back. in trade there. are well care fill personal so said, fully QX. think as levels support's Promotional accelerating

those in was doing better. ago tax year well. catch-up And we all have SG&A helps we as EPS then course. ago. organically, of think expectations also QX, higher But in we're incentive one-time So for year as a have That a some lower had we as lot some inflation higher higher reasons QX we well, comp

an believe perspective, from So have we to both organically EPS and we from QX. an QX inflection going

Chris Carey

accelerate why what pulled price/mix bit mix into in is why now that down how maybe you Then thoughts half context trying were we're activity worse there to of you. you pretty drivers and Thank back is Were of be perhaps expecting? volume? promotional Despite quarter. specific that's provide Did the strong in a in really and be so data, your Thanks. the the had into year in a I'd heavier Okay. get QX, half than quarter, there. seeing just on flowing our to that's were price/mix a as the the really, below below your expectations and QX key expectations, some expecting just So expectations. would bit curious addition going that's can perhaps getting quick follow-up your impacts been sense I'm that's a was the consumption pricing happening? informing you than organic and back what

Rick Dierker

going a out straightforward, pricing Chris. change well. going to evaluate our of need of pretty early mix It's days. all I unit to X.X Yes. aspect from pricing cost a We That continue consumers laundry mean QX unit. volume well, by to threw and we happens. another We'll do QX, No price/mix negative entire what perspective higher-priced is price whether QX That's litter. inflation from WATERPIK. -- to trading we round from a That's from But really X.X. incremental to do to And deceleration down I it. that? decelerated lower-priced as in mean

the next entire increases. right It So and of the laundry because for and litter inflects price round again of QX company that's positively there. in the delta QX

Chris Carey

Thank Okay. you.

Operator

you. of question. And Thank One from Olivia for question comes moment line from Raymond our James. the next next Tong our

please. question Your

Olivia Tong

Thanks. Great.

on called deceleration. the do to you the could And that if about just about about label, starts how terms of like price/ slowdown comment I but going price/mix? well? seeing categories the your First, want period, two you thinking down to could given then you that's from see expecting what you're that seeing on base for broadly, expectations trade and bit elasticities per mix sounds of just trade private trade benefit as potentially private How coming do a from consumer view you of your how highest your that here, risk you're down. macro unit out any that the in slowdown period, your overall as down, as impacting follow-up ask talk about just lower Thanks. you're you little It back, some demand, think label just end

Rick Dierker

I'll price/mix question. Yeah, the take

really slowdown price volume half, for said half on and Showerheads, consistent, as therefore, a stuff a WATERPIK happens, like and in what the by half, lower the negative, X%. -- but or is the example, trade price/mix down got of up discretionary the pretty the on result volume. the higher is X%. value before down a And in to really trade hand, other the Chris X% FLAWLESS then X% think down is and We how Price/mix, in around first on second first was So is we X%, half and WATERPIK that's down first I That's positive would whatnot. offset mix was that's the litter. on second is laundry X% And half. be

Matt Farrell

And opening my stable. we label private five private label, as label. question compete categories private have your remarks, shares one Yeah. in largely about Only I that's moved up a been little of XX.X%, It's X%. up that litter. label category some opposed bit competitors. is about haven't with as those interacting been where we but there's the with moved to our said in And private now It's

So is that's to a that private next why in confident don't Olivia? we the it's we feel that the months, Does help label six big us. near-term, at be for least expect that going you, issue

Olivia Tong

perfect. that's Yeah, Thanks.

Operator

next One moment our for line of from Bill question from Thank And Truist next Securities. our the comes Chappell you. question.

Your question please.

Bill Chappell

Thanks. morning. Good

I One environment I hedges, hedging kind on historically, of thought on diesel in the housekeeping-type did Just you cost things. guess, some specific, your costs.

And on a Thanks. just are FX know more in peso, So be the cetera, exposure you some what the locked have energy come then remind second could or just we what you in versus euro, relief should prices, around energy back the the looking et the us potential back if I is, didn't currency where your and exposure. kind potential and be with the of, Can for? one, prices, runoff of that half?

Rick Dierker

Yes.

first. the I'll commodity one So take

through of Most coming And go primarily while impact, that's earlier, material said out have say the we're entered and about cost year, I think it supply to is I for very inflation raw incremental that discussions this just we're XXXX. XX% through talking limited for hedged. a it takes We and hedges with manufacturers. third-party we chain. about the I'd

time say. commodities, versus would Our on minimal outlook time this is I last

some -- is and that degree. is that degree. diesel the course, some hedged up, and hedged ethylene is to Of to but And up is

side. currency. on that's commodity of comments couple the So On a currency, on

that's the exposures, not us, transactional hedge the currency. euro We our don't, of XX% line. that translational. top exposed X% drag of Canadian about course, on called on For the out just dollar. in the to line, we bottom the hedge whether Transactionally, X% drag or We we're

Bill Chappell

you. Thank Great.

Operator

JPMorgan. Andrea Thank And [Operator the you. next Teixeira of question comes Instruction] our from from line

Your please. question

Andrea Teixeira

Good gross morning mix and can hoping comment on if I you impacts on you. the thank was margin.

in down away And the QX. You with QX from you customers. possibly it some got may and going in your from this of some are of VMS trade I into a trade, I private assuming just also, you. just no confirm. And private to that's brands that laundry, do you of double a In label, headwind. remember, not some see was you label? private negative that want category seeing I you longer so as helped down mentioned, contracts for making this checking label in if you case, like helps are be if happens in categories may these I'm

clarify. trying Just to

Matt Farrell

is this Andrea, Matt.

to are private Just in with private vitamins label, label stable. shares respect

uptick. So, in, we're that not growth an The compete label. we categories it's only only litter seeing in private had -- only one of the five

Rick Dierker

private walked whether not decline gross years on into manufacturing On it ago, for impact We a that. away to mix vitamins of margin get couple from much perspective. right. revenue grows a it there's label vitamins, you're back And a of from or mix,

were XXX. was down a we're going In lot to it's not little a it gross talk and we XXX. QX, right? QX, QX to like about QX, be said same we improve it aggregate, bit Just down In to going in QX, from the margin from -- think did, And in QX, round QX lower inflect And last personal fill pricing. margin we gross thought reasons builds, productivity going it's to improvement quarters. year we're care that in about one the we time, then levels, we last to of talked our same was And had why previously. positive. but

on but I thought margin, that context. didn't gross the So Andrea, ask helpful I would in know detail you be

Andrea Teixeira

it on. pass Thank helpful. I’ll you. Super

Operator

the Thank Suisse. of you. Credit And line from our next Kaumil question comes from Gajrawala

please. question Your

Kaumil Gajrawala

Hi Quick make correctly. sure inventory, just heard it it, I on guys. heard to we question

through little are -- inventories a inventories guess bit. need So I to work you

of going should at about to your lag we of maybe discretionary the little you like what look So consumption for to items can some series a particularly be inventories results assume for high. talk at what terms -- in are of retail, other WATERPIK we retail categories discretionary also a as -- see then that and seem quite And items for while?

Rick Dierker

Yeah.

I think we to get because you by Chinese saw we get trying the that ahead because lockdown was said back in WATERPIK the And really were really, year-end. wasn't in line more we had release, to per of consumption happened. se. It of

So up we built supply.

We it as FLAWLESS. end of we And on couple spot answer as think comes then think by good, little household bit. in in-stock so I quarters for a year a think through of especially going well. good And a Similar we'll good one. to work But that on takes levels a at that, in we're there the be our yes, business. consumption in are retail, be especially to spot

our back are lower where think going like. we that we're think as quick pretty is personal fill our than to I we're recover But half. we the still in struggling care levels

Matt Farrell

Yes. or is And the you the at inventory on-shelf WATERPIK, asked everybody about about the Thing that at WATERPIK online. as of remind retailers. to on kind well business is half flosser

of class of really by there And trade. online lot isn't the so inventory that's a carried

in softness there's with of see an in because sales don't WATERPIK or the we channel. respect there to issue So inventories high inventories

Kaumil Gajrawala

you about been part times little you has consumer? a And maybe up many, mentioned to it. terms with down. up. consumer from from then it isolating can But I seeing private perspective, Got Olivia's Okay. share consumer, that consumption talk trading flat. just are on and a if and not down that value bit. But benefit know many question anything we to just just you I know your following label or of just the look portfolio consumption trading of trading that in

Matt Farrell

Are you specifically talking vitamins? about

Kaumil Gajrawala

I'm talking but know consuming maybe I'm what the their portfolio consumer. would not sorry. down, that considered terms seeing just less, pantries. clearing trading I'm no. curious about seeing value. of no, be buying you're XX% you're your in that of less, No, they're I

Just curious seeing. what you're

Matt Farrell

Well, if up period and I you XX%, last that is is value just about quoted minus is of a the detergent now, numbers and the think value some ended is X. detergent XX laundry deep X%, like July up in four-week premium that value

laundry would detergent. label say It's way, by laundry and the generally so isn't So of liquid private mid-tier. we -- a -- in there lot category, that's the

higher So than our it's priced brands.

like label. In when as So is just And double in quarter. up [indiscernible] haven't some of I that our digit earlier, that's our grew interacted faster. But grew said but to X% XX%, it label much litter our XX.X%, the the black to as category well. value peers. it's is not premium yellow ticked an private box, it litter, brand, There as which We the wasn't the grew but category. we even private XX% box, our with as comes issue

analgesics, few where The just to other mention again, big soda also shares the baking pretty is be and ones have now. And it's other right a you label which would are just category stable is stable. oral vitamins, private And Orajel.

Kaumil Gajrawala

you. Thank

Operator

our next line question [Operator Bank. comes the from Instructions] Stephen Deutsche And of from Powers

please question, Your

Stephen Powers

to Good going just morning. start guys. vitamins. want I back Hi, to

through about think goes, quarter your beyond I as call that on capacity is improving? kind pressure category And Number actually that business of is vitamins, is but your the Or and third the pretty category to more the you think in declines? back goes of comes you be fill do a it clear, your think the to where you then rate XQ? one. alleviates improving function

Rick Dierker

Yes. Rick. it's Hey, Steve,

think in and it back pressure QX. of as will Delta of really little I category for under the all half QX spike the last was be a and elevated the year bit

view. our that's So

step has category or the if over you than take three years. years doubled big a back, last two more the remember, Now

with again, category. the So we're happy really vitamin

We vitamins, should we terms it's have on alternates. we so, And XX the get fill. on be driving really ingredient-related, the back next two through levels now. vitamin right issues SKUs, day. In worked days In and or two fill that's single for finally they every really and of better issue

Matt Farrell

and of and we're just capsules new but Steve, to the sustain to tailwind gummies. mind that the other new ingredients assist And offering keep transition said, other Rick yes, what happy add is growth to Yes. the the from growth gummy super category going And the other year, to future. in That's few catalysts. the over the product of the pills last thing the the course, with of in category

Stephen Powers

value you Yes. And priced the guys are in too. category,

Matt Farrell

Yes.

Stephen Powers

Okay.

impact. fact I of you I sense but if good good a thought a exposure. now, And are a XXXX. how it's wondering now there wanted in XX% since least false and resiliency only appreciate portfolio ago, we the an XXXX obviously the the your categories. terms value a I bit of at still also has your having X.X I added I'm it's lot then XX% deal to a portfolio in was job was today And fact reassured. how did versus months given just I evolved of similarities underscoring guess discretionary that of security of So that you've talked about pivot of

your I'm skewed wondering what this for evolves incremental FLAWLESS curious, at with at to positioning late. one. your of the it on of all. number WATERPIK all discretionary changes if just those categories it number And forward? of this if So number XXXX, outlook two, M&A going like that I'm deal And way you may experience the these categories how And be approach a is economy seems good just in wondering if you're that one, and what has kind because M&A drag changes

Matt Farrell

start we'll M&A. Well, Yes. with

Our ZICAM us shortening years then into were cold in a in which recent acquisitions couple mouthwash. two which into TheraBreath, got of and XXXX, got a us most category, ago

everyday very to continue seek We're WATERPIK we So with happy out the acquisition. essentials.

terrific discretionary. since business it this long-term, it's Of purchase a XXXX. growth prospects. digits course, longer But it single high bought in cycle. grew has And It's we

fill and a fill the is be year, for go, to base will We've table once our driven of respect rates. far economy right under currency. in growing we'll bridge. going from that And as If better We'll smaller money the of shape. brand think but six line. and be water cost rates that the on it's settles by EPS because WATERPIK. of not down again, this as outside our end We us we're And can't with be back the year a discretionary. buying And that that the from those acquisitions, oriented is left in lot you long-term yes, the criteria don't own. -- certainly, it everyday the essential have of be criteria. But in that it's of do we've can investor, future. growth got we'd good the towards for the in the have expect brands, in But in WATERPIK, a that, do by rekindle but acquisitions we the all of the our change we WATERPIK months sideways US. met to okay, far got So think first We a that opportunity mind to now, keep are

Stephen Powers

Okay. very Thank much. you

Matt Farrell

Okay.

Operator

Thank next One you. question. moment for our

next Our Lauren Barclays. line of from question comes the Lieberman from

question please. Your

Lauren Lieberman

Great. Thanks.

to wanted a little Just bit ask about pricing.

discussed even I come conferences form and likely that mentioned beyond you should the you in the would quarter, size think July, last spoke they of you you incremental adjustments. thought, recent when need increases pricing package more you at

bit -- A, small, also require And So I that guidance time was but that's that, investment the And a this those approach would it's little to you'd is little case? if still and think then lower some the CapEx tooling. B, year. with curious, deal mentioned CapEx a that lead I -- for some

need into was you'd CapEx curious those? on side just as the pricing Thanks. I fits implement kind look you So, ahead that and anything to dynamics how of

Matt Farrell

that We versus we're price Lauren, next pure pricing primarily Okay. perspective, quarter right. last increases. you're on size really year, a Hey from pack said focused

a and if well, CapEx immaterial do new price to say outlook Now for any as incremental have will new both. line, for new of a a change course, it'd with right? like we it's for parts probably a be react accordingly. on news, for we I'd inflation On And to mold, So, see bottle. carton we'll or CapEx, changes

or a of dollars handful impactful. that so, it's not So, it's million

Lauren Lieberman

Okay.

implement about previously being cost. more a rather than CapEx, the it relative So about it to the was comments the time to needed

Rick Dierker

a months to to time. change to a Those things more for order It's about order carton. do a right. the take a different design mold, mold, are parts that the do change of XX Exactly a cut to -- line size in X parts, types

Lauren Lieberman

say Okay, lot, great. a should I Thanks that.

Operator

question. the Thank next our Stanley. you. next from comes line Morgan Dara One of Mohsenian from for And question moment our

Your question please.

Dara Mohsenian

guys. Hey

that. on just a So follow-up

the any productivity million take that On always $XX changes? in if the part. I plans cost incremental pressure there I plans of concrete it more there incremental guess, incremental there's size pricing take why just But to is guess, not? understand pricing? pack incremental or timing lag. to not, And are is want Obviously, some I to

Rick Dierker

Yes.

and is severe consumer. for we're just then think adjustments to evaluate as price think continue increase. downhill, doing the a with to changes I focused effectively chase ball And we right We Lauren, a said on size now, inflation like really we which if and way, we'll pricing. pack that go not continues just incremental

Dara Mohsenian

be the volumes peers. of then on more reacting And appear supply. some front, the more elasticity But Okay. tied to to obviously, that than pricing demand some your CPG to of may

any an can through just give demand the So you if versus us coming you've in in guys you're seen as you your terms what far retail of at sequential on more front? and parse update sort seeing where shipments, so of expected change elasticity, you than on consumer that you're what recently

Rick Dierker

In a few just quarter. increases XX% better price on new comments from expected hit into XX% on wouldn't to the saw than went volume. effect think it change you general, We last Yeah, Dara. and The head, I litter laundry our ago. for a weeks elasticities

comment. because early if So it's there's But usually of of sensitivities. kind price it's of because not volume fill noise, any too to levels,

Dara Mohsenian

last, that categories are then narrow in in And lot terms with either gaps where relative the can of competitive a the think realized? competitors. you front pricing whack you have of environment you're you substantial guys and Okay. out more where where characterize price if with to I'm of any where have just you gotten premium price just obviously, then have or gaps, there the pricing wondering expanded on value July, they may pricing

Matt Farrell

have we increases the July. will we are Well, June, would price in of there both for elasticities. be say laundry with Remember, were Yeah. through for That litter. is new and shelf happy I end hitting what that pretty just

over So going to the quarter. the that's promotional one now we're pullback the as a goes, was environment next far as in watch there And QX.

year-over-year. brand basis that laundry, sold-on And some was And down XX liquid at for pullbacks example, points by there was XX or the were big brand. around look you XX%. deal If

was Purex the points were down year-over-year. basis XXX. So down We XXX

also going concentration, also a category And price. a to were down pulled be we and through again that litter's back pulling So back promotions as others we litter, may because year-over-year. are way in modulate

laundry, to Sold-on then And back deal. mid-XXs. in in about high XX%. around deals the liquid the teens. normally XX% It's That's sold-on normally

with to promotional the our So they peers. and see third environment kind of has react pretty for tepid going most recent year-to-date. as far we're so watch our And the increases, how price been quarter

Rick Dierker

Dara, I And, step when back, And category, gaps. you a will reacted. our general, if we've say in take of the category a then also has we're led that, even price in all with happy

few a to the within months, so back normal. price gaps are And all

Dara Mohsenian

Great. Thanks guys.

Operator

Thank from today you. One moment. from Sachs. And of our final comes line Goldman question for Jason the English

please. Your question

Jason English

the guys. me Thanks Thanks I'm guess, I closing Awesome. in. act. letting for

head you benefit the at the heard this be most know. think, time. down I all in it It's do expect from -- accelerating to the in Which in fourth But the anticipation expect quarter. an point remarks don't prepared you may you I you I press my that trade categories that? of jumbled release, in have in

Matt Farrell

quarters I'd weeks, we that held share one, to faster Remember, in premium. swinger. XX% have where started value that's trade we've it. changed significantly share several premium is already that the in the four the previous versus up And latest versus than premium. big We detergent down. big to And seen QX, this. that say the premium. like in is was see I expect losing growing QX, we what that laundry starts Well, QX, value and X%. said value That been is, said, down detergent the

going that, think to that's do we accelerate. So

contemplating. and increases do we in have in place others to the the recent with the But many we consequently, amount And think yeah, I happens that of price been support, behind have Now a that see price where half. our to and timing what of be price fair advertising quarter, our be with trade increases. increases. a going have muted detergent most both could second their bit by is And everything our competitors fourth

accelerate. why that's going the reason, are So for context to we the things think

Jason English

capacity price, because about its hit talked P&G paper reference activity, to promotional but did bath, on earnings that's laundry And call get more ceiling marginally resolved. they but been now And they earlier. a not

suggested so leaning the that expectations many much your in how to More or going advertising, for fourth that of they how retail back now. they're your merchandising. transpires, that If more outlook start and quarter? And jeopardize

Matt Farrell

Yeah.

HAMMER. got to Tide the You price & remember, ARM premium is of twice

don't think I a big that, as factor. So that's

true recession. Tide still trade. pricing was what But yes, increase, their Simply. a XXXX place back that with Now happens significant not it's And recent have we'll we last price gap see the in Tide in in had with the Simply until is half, the around. second is That up in and pricing price our to

Jason English

Fair I’ll Thanks Yeah. point. on. a lot guys. pass it

Matt Farrell

Okay.

Operator

further I'd Matthew hand Thank the back you. any program session Farrell This does program. conclude of to to today's like for the question-and-answer remarks.

Matt Farrell

Yeah.

half, full for we it's look, simple X% is a other we'll all are X% the Trade story, the call And X%, to the X% support Because reported down you rest, now of from got X%. currency, the is again EPS second rates X% is and is down at Why? Our flat. improving. and right? happening. end big organic in healthy. cost. did to the Well, X% place for year we've with are the talk And Shares Fill to October. Okay.

Operator

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

day. Good disconnect. now may You

Church & Dwight (CHD) 29 Jul 222022 Q2 Earnings call transcript