CHD - Earnings call transcript Q3 2024 | Church & Dwight Co., Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Church & Dwight's Third Quarter 2024 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'd now like to introduce your host for today's call, Mr. Matt Farrell, Chairman, President and Chief Executive Officer of Church & Dwight. Please go ahead, sir.

Matthew Farrell

thanks us and everyone, morning, for today. joining Good of results. begin with QX review a I'll the turn mic I'll Head Then the of CFO Dierker, Business and our Operations. over to Rick up is open done, And Q&A. when the Rick call for we'll some

growth. Adjusted exceeded specialty for grew strong All Reported X% & for domestic, results our beat outlook from sales solid that X.X%, and and which Dwight. of X.X%, our Church X.X%, X.X% with right. products was was outlook another sales volume QX very $X.XX, our gross a was which spending at results and points, of was sales businesses. quarter Organic growth our than thanks our which gross QX international to accounting healthy categories. [ the the marketing market higher-than-expected growth gained we and our share $X.XX in nice quality higher expansion. increased XX The margin outlook, beat we ]. expanded $X.XX were majority was same a by EPS basis driven margin of time, Adjusted

Our sales as online of well with XX%. percentage approximately continues online trade global sales. class a perform to of

comment and to fifth quarter U.S. organic gaining on business U.S. business our of power growth. share growth of X.X% X of was businesses, and the going brands the market the be first with I'm Next, the sales growth in our Volume the this X is up X.X%, will each volume quarter. consecutive with X in

and the year. categories few our a in Now of year important at contributor Innovation, a every let's to course, look U.S. success this is big

launches. I'll new highlight comment the categories, success product As I the on the of

flat in with X%, HAMMER reaching category liquid The the which Unit X.X%. ARM ARM & off start outpaced detergent laundry & share Let's consumption laundry quarter declined Dose XX.X%. HAMMER detergent. grew category a with

of However, HAMMER a X.X% bps XX Dose to ARM growth and unit consumption dose. Unit grew XX.X%, we share saw &

Clean is over we our XX% we consumption the category, Deep detergent, laundry franchise. and Deep our detergent entered of Deep to where this ARM launched laundry. products mid-tier most new detergent products, & Clean the quarter, new ARM liquid POWER & highly HAMMER in year, of for little and premium incremental it's SHEETS. Regarding HAMMER's X into the a liquid Clean accounted growth

POWER brand new second & a new you to detergent. is this is remember form product of ARM was of SHEETS. in new offer This the The in And form August major first HAMMER unit U.S. may XXXX, the dose laundry

is consumer we this & [indiscernible]. form. bricks about now Amazon. Our for also brand brand sheet interest the Kroger. high the launching It's the We feel new into since fresh #X And the have product seen form. in sheet this at year, sheet in prospects future the this #X mortar linen scented is ARM on #X great and HAMMER

of QX. our litter. news over benefited category X.X%, this expected, to The going share about absence is to consumption, to which Now prior was situation, reflects flat on consumption share. switch half declined & market ARM prior as held I'm of That's and in competitor year category gains. out-of-stock a HAMMER The year we've our good the litter

#X Litter which lightweight the & because major QX. share our This accounts is in category new segment Clumping continues litter, expectations grow. our HAMMER with Hardball important ARM lightweight category. XX% is became outperforming as brand product for Our is new year, of the of clumping to this our lightweight the

and assets. from resulted The expected, declined the saw vitamin business. few is the the a business in to down even can the growth This which improvement care. We than to on long-term of personal down our our taking drag declines I'm over the profit the The greater. XX%. The is this we bad value call switch that release, a X.X%, category in company's organic of has in and is an in gummy continues vitamins you was category far growth. to The quarters. past flat of we as million well, Now business QX, about expectations going $XXX the gummy the news be reduced were book of consumption longer write-down improvement

investments We in with degree which move the is us that consumer forward to we actions, and new our packaging, higher some formulas the the experience for business to optimism have of XXXX. coming continue stabilization upgraded include improve gives innovation marketing which

shampoo. mouthwash which entered launched Getting growth X% #X is Touch about launch in with dry ] new point of note alcohol-free category Next the a $X category, XX%. in mouthwash, new THERABREATH to growing with ] continue [ Activated. very share. see strong products. continues consumption the Activated the while mouthwash for to Activated but global X users innovations our wash the is has up and mouth total and year, the into be X% few represents in and leader to in alcohol-based THERABREATH [ launch the subcategory billion share that of QX, dry share. the category, Deep segment these continues BATISTE, products accounted of Sweat THERABREATH market to [ of XX%. we XXX category, Rinse. for points continues the was The well. Clean XX% down mouth These BATISTE to was in Oral And important [ the shampoo. Over we XXX here's basis of growth, product to antiseptics up basis new category account shampoo is ] antiseptic with X% year-over-year QX, the It's with to BATISTE This new which year, in already brand bring an the stats, antiseptic important. share perform is in BATISTE up over X%, wash nonalcohol grew #X #X is XX This category Sweat ] XX our dry mouthwash extremely to and

grew a continues to to of while future the category for majority patch brand acne the the antiseptic X.X HERO of XX launch. HERO care #X and indicator market the the category. growth great a share patch The XX points by share is grew basis shares. drive in the So with XX%, in

quarters. launch HERO couple very that remarks and detergent, laundry the over few promotional seen have trend sold to same patches provide a levels last here's our solutions to in bullish stable So promotion the story. promotion percentage you the different about is Unit and stable, low with sold Dose, the In XXs I'm few Over line. litter, is of promotional the the levels And a brand. future low and averaging liquid continues pretty on the innovative of categories. In in much different last increased. also are story, we're over XXs going Litter household conditions the on in we've in quarters. on

So at QX were The sold it's in hits even driven going to XX.X%. ] QX, litter but XX%. All major right. look be is little [indiscernible] if a over XX%. QX. increase was XX.X%, on you deal was In higher it primarily competitor promotions [ was in one QX, by

now Specialty to and international Turning Products.

every on Our Group. business as Global international driven as was subsidiaries delivered in algorithm growth right X.X% Markets strong of by This QX. well our of in our one our organic X%. of growth That's

sales this solid Finally, organic evergreen for hit Specialty of growth that's year increased growth this Products. target. that quarters Organic our sales will division We're this now confident business. X% growth X.X%, will and X organic achieve

for were commentary Specialty growth we progress in seeing we first In in This in consumer. our great noted X.X% So deceleration X QX the expected. as continued we closer our our feel of in August year, a June, the about consumption and Products. This X.X%. categories months the on categories. July in to After July,

in remind hurricane in we no the category results. ourselves categories that But the strengthened Now and in port And consumption X%. strike, all saw October, up influenced about was September, let's X%. our doubt consumption those to then

every turn doing to I'm provide that it So company each up QX the growth a U.S. It's I rates. I we outlook. on my Dwighters by a color divisions year to out all remain want all full strong want with over great wrap there great Rick is cautious X in such thank comments quarter & reiterating consumer category well Church for growth. now and performing regarding and job to the the going to delivering the team. And and more to day.

Richard Dierker

you, morning, basis, a All due EPS. business. to noncash a start impairment On had a vitamin of We'll and Thank we reported with everybody. asset share our primarily right. of Matt, a good loss $X.XX

primarily was expect organic to Organic volume X.X%. quarter driven profit. Reported driven were sales growth, growth sales $X.XX Third by and adjusted the of positive than up up beat organic operating we year. from is and the QX. again of price/mix prior EPS continue X% in X.X% was were better volume Volume driver The higher-than-expected of primary X.X% $X.XX, up high-quality outlook a X.X% was revenue and was $X.XX our and by

primarily margin gross to productivity, basis was higher adjusted point manufacturing a year increase quarter of mix, XX%, from ago XX due third impact net the Our of costs. volume, a

Let made basis me was from a impact acquisitions. XXX was impact to volume manufacturing and impact from XXX points Gross the margin the basis XXX basis a positive productivity costs. partially offset you mix, through following: up XX point related by This of points QX bridge. positive higher walk and basis from positive point

drive in net year-over-year. and points a Marketing QX share million XX Moving higher XX.X% of was to as marketing. was year or sales expense gains. percent $XX helped up Marketing basis last

year-over-year, tax basis. In primarily expense international XX.X%, an full $XX For adjusted expect due expense adjusted Other impairment. increased was investments. the by benefit million and was for QX, of related to points this R&D other the to million. vitamin decreased a XX basis IT $XX.X be to We approximately now there SG&A on QX, and year

our tax of impact, and is previous XXXX. of XX%. And QX now was XX.X% versus expected the compares that The in now adjusted the to for cash. approximately to that XX.X% effective Excluding effective outlook year XX.X% rate full rate

million, earnings. $X.X be operations from months was year for cash million, $X prior a X For first increase almost million We as from of XXXX, of $XX was ] regards [ to planned. by in driven an the cash We're first million great a from year ] approximately expect full projects the as [ having $XXX cash proceeded the months increase capacity year activities X cash. CapEx billion. to expansion $XXX almost higher flow now operating

and to those year initiated X% of We for of we XXXX, expect as XXXX in now we that complete to the investments continue of and expect approximately full were in levels to return XXXX historical of outlook. the sales CapEx beyond. And CapEx million majority $XX

saw slightly year. end we of cautious the for rates U.S. quarter, regarding As Matt remainder our the U.S. the growth we while third improved categories category of consumption consumer and the remain mentioned, in towards the

expect approximately growth sales to reported organic X% and be continue approximately to to be our We revenue outlook X.X%.

We continue year to be full EPS adjusted X%. expect approximately to

XXX we approximately and now percent end points extent of on does to Turning expansion happy as you behind previous expect SG&A that, range, enter as XX%. the at I than take marketing the to the to plan basis be and high above better We our to in to release, sales read the our we be gross margin. marketing XXXX business now incrementally expect and any with of And with momentum. And a outlook, help would investing Matt questions. of

Operator

Carey [Operator Chris Wells from Instructions] we And Securities. will take Fargo first question our with

Christopher Carey

sort quarter or I'm outlook trends going start I into as benefits there that if or these rates to view growth some are about the shipment [ to QX. so consumption be guess, a this seen and should conservatism I if late, decelerate improvement we through start reflecting, perhaps in to inventory lap just not primarily is outlook category ingrained atypical that the you've timing QX? any you of to should say, any dynamics, ] QX call are with versus, some and maybe expecting of for which understand that some inventory of want dynamic? going timing Or again, trying

Richard Dierker

to inventory, would part would enough talk There's retail not one, influence impact on maybe category Matt call examples, rates will not inventory, first but we the anything. about and but the hear things anything growth take I'll what small that out consumption Yes. it small calling. enough [ be ]. we on to We not of

Matthew Farrell

the kind Yes. at you categories for if Chris, and QX as look some grow, of QX, major far QX our categories. as And of

QX, QX, X%, So was if up X%, detergent, up the you laundry category look at the liquid flat. QX,

X%, pretty later, up X% are double up deceleration. And being acne if unaffected the category look You flat. HERO XX%, and to X%. by the that. But at X% you can a at trend, mouthwash, Patches going digits. up X%, X%, XX%, we're just you then so high look But obviously, see then somewhat patches, steady, up but is

about cautious the is be reasons hey, we're have to the would of we better one why always because that's taking are say, to But starting when economy. that's we're That's lever only the things tend share. still categories So down. you I the slow doing

it the feel we going our some but performance in kind good had X% yes, [ in like take, We So good of are and We ]. X% brands call our QX. about performance. We QX. put into some up where we share

Christopher Carey

sense. which to there's delivering just objective you if the time That you from came quick really long visibility where in the top is how Okay. still by here? makes figure But do X% you're the to be follow-up It's for line how in one be think going. XXXX Then to you'd an categories you to the are about again? current the past business question over not against the point expectation but appropriate growth. out per one what have up do the think deliver guidance would environment? environment that relative level U.S. in top not, in an trying current to And to se, ability relative Clearly, need get line a growth there U.S. objective much

Matthew Farrell

sort guidance... was attempt That of at the Yes. a XXXX veiled

Christopher Carey

thanks. can You you how that will, take

Matthew Farrell

to correct one on you thing. want I

As from X%. top that far U.S. moved algorithm was from to goes, The to our X% as to of when we portion X% going line. X%

obviously, lion's the big So of that's dog. the our share business. It's

is with going [ to So X% ] that going the expectation we're grow forward.

Richard Dierker

we SPD. for X% get international, domestic comment X% That's for [ the ]. X% So our to business.X% how for

Christopher Carey

Yes.

come didn't really was [ in That if embedded across. I question. ] the Sorry,

Matthew Farrell

say, not look, And algorithm, we our you it's of have 'XX, when a kind it's look and Yes. 'XX to portfolio 'XX, long-term at just 'XX.

you our every the our have brands, So 'XX, of planned we if back, is is look innovation we 'XX. look about encouraged look algorithms at that hit we at strength a consequently, our history the And over 'XX, X-year we year. basis, we

the fact, hit X% our reasons that said, know we've one we In yourself XX years, we you of forward." make going over the "Hey, last why algorithm

Richard Dierker

do to over we're just kind Yes. the by go grow we we why take innovation overdeliver time? think I we And to innovation, in XXXX. great drive is have that, that's reinvesting reasons also households, and of of as putting trial, to to add Well, support where one we're share and

momentum. [ So head to that's XXXX why going we're ] we to think with

Matthew Farrell

Yes.

gain. to is have innovation you be the when way categories So contracting home always going share and

Operator

We'll take Parikh from Oppenheimer. our Rupesh with next question

Rupesh Parikh

the business. vitamin So just to going back

an see you think this quarter, are the And start the stabilization then with So that just maybe thinking business? we in about impairment to efforts 'XX, to in seeing and any how you shoots you're path stabilization growth? maybe there. Do green

Matthew Farrell

control things been such more be can as X.X would place. probably and this What graphics that we for -- and things than now Yes. we've years, messaging, those the are packaging in at

my meaningful business hit said gives this As us in about in remarks, earlier far innovation that some had I And any the that's haven't as what what, optimism innovation XXXX. for not stabilizing goes, We has few market. years now. a as really that's

Richard Dierker

green curve. seen time. of brand the these we different are I are the Matt long kind of right, lift of our reformulations happening. that we retailers and other where doing maybe being XX our it of and some to and say, consumer few all love picking we're sure our get core are But things of our they would for said, got some And things product But making consumers in the as delighted period that probably a that shoots, is green Yes, that a so again, have shoots. they ahead product know and some of we've

looking couple XX price in levers we was the did so We that's gap and and units -- been price up areas gaps, adjusted a X of of And at the encouraging. are dramatically.

of good innovation we Like really April shot, we're year, get have Matt coming there's progress. said, a is So March, so better in next to and optimistic.

Matthew Farrell

Yes.

but part the of for looking you're far. is L'IL one, this been a has green smaller really CRITTERS responsive business, If shoots, so the

L'IL past in In CRITTERS share some the gained quarter. fact,

need share adult, a So where is But and innovation. we thing. the good that's that's business of really, lion's the

Operator

question Goldman Herzog Bonnie next our take We'll with from Sachs.

Bonnie Herzog

a had your marketing question investments. I on

up called bit a out expected XX% you in as sales. and than your to raised more You QX, stepped spend year a percentage guidance this of

give X% to shifted expectations strategy, go-forward then years more investments internationally. types if curious you sales of in model. then out greater next a could with of just we should the terms you're growth your if as any will either of this to channel, behind color us assume et of percentage be So evergreen changes cetera? the a finally, be going dollars And you've in would may, spend, up your support to several on hear in I organic called medium, the And to basis, I spend continue as step sales more

Richard Dierker

start, Bonnie, couple But wants when mean I and marketing XX% somewhere of in good to a Matt I'm detailed spend, XX.X%, you XX% I'll sure our That's and that's question. meaningful. between to add million to look probably of going cases. $XX-plus raise at some thoughts.

that And they're internationally. different driving expansion, we're international brands, BATISTE some is doing and across expansion, well, too. HERO really But STERIMAR, because markets of THERABREATH

We of U.S., the of in lot have our is share Like and many innovation but our believe one cases, we're years again. that's of spend why best expectations. even where so doing a spending, find this But we're is that getting most ] timing our [ places well that's in we're over-delivering of we why innovation.

like on our things laundry, Touch spend Hardball and the and BATISTE like Sheets of a ]. [ laundry, Deep so things on Move things And new litter, goes behind marketing like lot Clean on

Matthew Farrell

that digital advertising to XX% add other is the of I now. And right would is Yes. thing our

take of year. at different ability have So and different vehicles the a advantage around of to great we move times

by is and brand any is Rick's and bit than So quarter But that brand. as even more part Specialty the in Products. where say domestic, a I is little spend right, of go international fourth wouldn't

Richard Dierker

future-looking far share a around XX%. It score as as depends on all algorithm cost. our as marketing our the is how And percentage, our

X. X shares you So fantastically. in release, are or Well, doing the our heard

I old we're think our for year-to-date, XX of all XX all of power brands. or brands, our

So it's level. we're And and like feel that's long often really right gaining not, think I as share the is than scorecard as adjust. what we'll we And then if that not, more matters.

Operator

Bank. Powers next our Deutsche question with take We'll from Steve

Stephen Robert Powers

might up in for anything the from XQ? than answer, follow that I came was shifted in modeled made it? external little more to the sorry, that we Actually, spend there a -- Or of quarter in bit the on third the quarter. perspective fourth on missed in to marketing But just marketing but is your have obviously, your support it expectations, least how it lower from anomaly versus that outside up all XQ

Richard Dierker

up that last QX I models do. few which call XX spreading what more very [ higher we but Yes, probably it's points of were between is that we in year hundred QX think it going be and timing a to anomaly. just it the basis in because to going getting QX were increase. disconnect over support a QX to a an QX, I that was innovation. And we spend even a We had told little maybe in better were outside We're wouldn't to ], and significant is specific, everybody were down QX, we

Stephen Robert Powers

question. more guess Cool. of I overarching Okay. an

the the driven think half going of been [ given your perception position be is year, a more vitamins of and as the added us a much legacy whereas THERABREATH many respond is choppy core reasons threshold of conversely, focus HERO? ] some relatively of view late. core touched Dwight next being But has investors respect HERO, that [ second so you legacy on Or in & what and that, either investors Church ] by into of confidence to the just bit to But ] in probably late with how that with heading THERABREATH business? this You've resilience that in in navigating in answer. upon -- and to for [ holistic there do lead growth more kind I business among like to some litter of -- categories just believe

Matthew Farrell

Yes. of the But and Look, and and that outsized And it's yes, the manage a on. past flows of we I'll in over can have categories. THERABREATH swing performance kind ebbs take we're true lot that pile delivering year. and years. Rick over at different this a a HERO portfolio,

If different you years, look back train. businesses many it's different times over with pull the

that a sheets of products growth be big new those referring we patches not also the that term, this going part if we business, that the THERABREATH be in done. that litter, to, categories laundry think our the -- may like business are of said a I be categories you and outside be be to in as have So the billion When future of will and innovation And long you can and over other we will Hardball. well. But $X.X time. bought is this look the some

So has distribution as far for yes, doors. the that whereas achieved say, business number probably of we'd been as

on shelf a We done out spread with other haven't variants.

penetration. think brand we as I And goes, as make for more to has categories into But distracted We and want nailed adjacent forward. patches still significant to we that awareness created going want get household to around to there's spread THERABREATH. HERO HERO the and categories. moving by and sure the So other grew more don't far growth opportunity

should we litter, will think I in in the So as dry to future. have the the those laundry X cetera, because differentiated continue shampoo, and drive products future will have And that be brands that in investors confident well. innovation we et grow the of growth

Richard Dierker

of Yes. And those a few echo I comments. would just

is example, HERO now It's have THERABREATH THERABREATH household of penetration X%. think I household is mouthwash runway. just but around is the #X years like in and XX% mouthwash. penetration some TDPs and an cases,

example, ] some now messy crux what business. right XX% as your a back stock say period long lots really, was so base would I share we've look at if But about such is, of you business? out that of of question about they [ And the of X. are there's share on optimism because those had share your competitor look for But So those our a maintained Litter, lot in of comps before outage kind our runway and the time. base for for gains. of at you of the today, year-over-year

or of right And if numbers kind now. meaningless you at. so are week-over-week I don't the But look baseline, I month-over-month really look that's at what at look

experienced And over so same and strong growing the Innovation, shares. is laundry, Clean, that litter at sheets Matt that's all-time a like like is with we're step-up period Dose of We I doing Deep feel getting before. growth category share long for feel category well. is as Unit going stronger. highs, high incremental said, and all-time still It's a time, We're the mid-tier stair entering we that's we've have retailers. driving sheets XX%. we're hitting into

of So a optimism. lot

Operator

Mohsenian take We'll with Stanley. Morgan from our question Dara next

Dara Mohsenian

if QX, lot we just more know you So I category starting And because Matt, think perspective? category it Is data, category of pricing a in Is you green category you're environment lack the you if that short didn't see time on was a pickup. think sense as volume. growth growth it first, hurricane a we're you're enthusiastic a as in beyond much as particularly muted September, growth. just shoots you driven from necessarily enough or period you follow-up you look a growth. this see trying the in but didn't the more bit, a underlying excited pickup of October. to of just just by of sound about it around category on get to not And some a that touched much given parse

Matthew Farrell

my have I Yes. curbed must guess enthusiasm. I

strike we and so the ports different the October, first growth consumption that, say week in or in and well, like that's at if ] We would look I would double-digit it So categories. say in then. you you So that was the some [ no ] September of saw hurricane sustainable, results. influenced weeks couple of saw the since from that doubt any Dara, what not [

in some pantry went weeks, there's the consequently, if So loading first somewhere ] from in pulling QX. couple that [ that's on else forward just of

our in So not quarter broad we U.S. an I'm economy, category categories. our of is August on X.X% X% from commenting broad the -- June, up is more commentary is say, on October hey, September, that September. But are as look -- to category inflected remarks we're like And necessarily in going versus it's maybe a kind not we our would July, the where maybe at anomaly.

look the categories, on. at we what So our is -- that commenting we're

X% think healthy. I is me to pretty

Richard Dierker

Yes.

that's we If if we many or back X% taking to be are will be at the you as look would a X%. X% share, times X% company, history, growing categories growing and how got the

So as it's history. with kind of in line

Dara Mohsenian

Great. looking expansion to XXXX That's international you can and give is of in much And potential? you on terms each THERABREATH, update of on out business helpful. HERO how today of see then And for the an us those brands? incrementality how much

Matthew Farrell

countries can numbers in registered we're that we've running to and hard sales, you is of HERO by quoting really for get THERABREATH and have countries. to been without XXXX, other And there. our registered I tell end goal What the XX Yes. is HERO in

impediment the we're feel highest-priced go And bodies mouthwash. eyebrow, But THERABREATH can you brands [ a outwash country. do it we today be well. with regulatory of market a that. successful you the been. the in there's is how markets, to international ], I'm yet, very firm and surprised serious course, when But good has to and travel country both that Even about THERABREATH, is So pleasantly U.S. Naturally, raised expensive

many a expectations in maybe mind international, versus have in better frame countries keep we'll are. to that how or you end will our guys we what U.S. bit talk HERO little we and when -- and an it's January of THERABREATH So and for out Analyst were percentage registered Day,

Operator

take we'll next with question Grom from UBS. our Peter

Peter Grom

and on help I or question for rather you assuming trends just And to Dara's stronger maybe quarter you August. the kind I the Matt, to follow of the for than us you just wanted September be understand clear, XQ. assuming in the growth July are category weaker there. can you're October up what just said think just

is this category So And but I the I stronger this, are what's quarter, help organic us case, just if understand you sequential the guess, can that if to assuming wanted miss if slightly you sales? driving then and apologies growth that. clarify maybe the did XQ slowdown in I

Matthew Farrell

is first months we'll with go X August. be first December number. that's June, Well, be we'd big And of lot a was than It in let's October October X.X% categories. no look, X% September an we for to on like then July a really next question We'd and X November, to QX X.X%. were X.X%. say, was the And months will say, hey, the year. say respect The your and And average July. thought different would anomaly what that and was

we total but a good that's we beat consequently, quarter, to had So our said about is good a why we number X% for yes, second organically. second still for And we feel call fine half, we're as for in saying X% X% third QX. half. But really the

Operator

our Anna take We'll Bank next of question America. Lizzul with from

Anna Lizzul

full touch guidance for which this I seems the The on a bit wanted conservative. quarter. year margin, gross to outperformed

could So manufacturing. on talk about outlook I was just wondering your if and you commodity costs

Is impact that noted also that bit you think to expected were QX? QX higher. manufacturing in a costs I

Richard Dierker

Yes. Anna, Rick. it's

perspective, of XX.X. margin XXX. it. watermark bit slightly. say full ago I gross remind was a if QX QX part means from our that just at year conservative That's you at more everyone it's is little high up a the year you're think would a I right, It is

of the for half, the the up ethylene linerboard. were X% same commodities or or half back in in Some first like flat

we that our have the about We at network and talked Analyst throughout our investments kind Day in and that of built warehouse year.

be conservative? that a yes, could little Maybe. So

seeing that productivity, that's have focused on. is what with products are inflation gross like I And that in like on is to our And other job these trade investments -- ] seeing. forward, look thing still also impacts what think we we the also [ couponing we're or to we margin. we gross offset support we're new margin make as as

those and an are that's So eclectic -- the view, wide-ranging of details. kind but that's

Anna Lizzul

on retail or Are right. seeing here. any customer as follow-up on here? category you channels All a And discussion purchasing habits That's difference just helpful. between in the quantities

Richard Dierker

in for purchasing categories X see of volume a growing been are volume-driven quarters are our we've the row, most remember, in categories we same. growth -- say would and I the patterns continue No. and to

Operator

our We'll take with Barclays. from Lieberman Lauren next question

Lauren Lieberman

the to promotional quarter, and talked want about bit last some were talk fourth of about particular. Just laundry in promotional pulling in sales unprofitable little you environment down. scanner activity year's a In

think base So laundry? you'd quarter, the or like fourth at was the about kind last just the else want to environment adjustment on right in it XQ. of And year easy now is and like period? you anything comp promo were it into as Is get add an

Matthew Farrell

they ] about you're some of Lauren. I'd we what We and with with year and we [ or household and uneconomical a such right detergent, in will this in Yes. following What's be be the so and thought Hardball did litter, laundry places trade particularly [ promotion. profitable is products eliminate new have we'll say Deep investing great Clean weren't different sheets QX ] year of that, investments. and

margin. gross his in out called Rick to that things the response of One

Lauren Lieberman

category Clean. see Can doing successful as versus thus been the being emphasis of you that helps noticed I Procter me sheet significant a that far course, this and to category putting Clean [ like Q&A really know, sheets you it of has been ], interesting one you're also you've go, talking but probably maybe The for been me was talk the on be? direction Because amplify of laundry travel bit the think trial picky, when they some really you innovation, Deep to more awareness you and do this development, has form. about how too a it's like maybe seems about Deep in can

just even then profitability traditional versus the Clean? that Deep relevance the liquid higher And new point sheets the form. your thoughts of of business, the price So a on as curious

Matthew Farrell

Yes.

right. It go Clean back You're idea to a the is was it's around whole very question, a strategy. excited better, and Clean, we're good let so me about to Deep But best good, have Deep sheets. true,

is it's better orange laundry detergent. is based it's HAMMER. The is OXICLEAN. with our So the & ARM And Deep ARM good HAMMER priced is And bottle on Deep highest Clean Clean. & mid-tier, the best the

trend, mid-tier Just HAMMER box, bottle, premium percent the XX-plus it's a discount XX% & with sense, at the got -- still at to ARM But it's to a give the premium been like it's box you to but you not that's yellow yellow premium. look a if to the growing. OXICLEAN. some got we're yellow XX% And

that, about timing important It's good feel we our So launch. the of that sticks.

sheet. in it's particular, that's good, long existing back There's and I going businesses going in you this form. to question first that's term. say, Powers' like Yes, Steve in is we're and business? we And reasons the it's we So brand in And to feel good you branded It's best yes, plastic. forward could litter, growth if form, why that. laundry, first. forward better, it's to can would the be about of it but cannibalize go us -- have launch a true, efficacious. its think your big major Clean about Deep your some -- no good It's that source then for Sheet future. And laundry of like be

So like we us forward. Unit the of Dose XX%, think category. that today will is be XX% a going bigger for emphasis

not big which We of around Dose bouncing X% have between had in X% very big historically, and Unit been have a that share subcategory.

sheets for then Unit way home to the Dose. is our in grow So existing ports, to addition us

fits we detergent. together. So forward think this the we're we And that's in going position because I -- the a question all appreciate good in why

Operator

our take Grundy question with Paribas. BNP We'll from next Kevin

Kevin Grundy

Matt, seeing the stepped you're and Question of Clorox is promotion of ARM & on up as with levels. at has litter you intend Step Most and to Fresh to HAMMER. environment the potentially share expense regained high mentioned, how the promotional remarkably levels you respond. that there coming

here intend It been like anything in trying dollars trade seems you if magnitude Rick, ] It Clorox. a It the quick feels interpreting year. category. share the seems okay it share respond? to relinquishing surprised Have the like questions. of But do of you're sort the I'm price consumption. like kind over over decade gains by has potential of [ impact taken of like of generally ago. to doesn't you to it spend of you're saw we It's laundry, support do couple get then one war swing. And on earmarkings past like a how a your tone correctly, out the So in from back

appreciated. would So be And an have then I unrelated there your thoughts follow-up.

Richard Dierker

I'm you Yes. and happy litter. with comments, we're couple Matt chime it at where stock are in, sure. a Like is This of we I'll in give really what back my year-over-year was then comments, is. will as Clorox

volumes are than Our higher were. they baseline

Our they shares are than were. higher

look a share hold started. We're promote. not is. chase up in where on race bottom going this a drive We opportunity you that's because think if with go be litter or our the go share we when going so XX% share to fair are to really promote, behind to happy If back to we go gain lightweight to innovation it's the

I'm for optimistic to is. we're difficult time, out that, used retain switch what that's because that's over So one litters. just It share going have they've they After doing. get and to while it's for they we're product a been what to. cats

also hard harder. because of that's switch high aren't to maybe be as as some to or promotions competitor it's and why So litters used the the of effectiveness they

to So anyway, anything Matt, that's like some add? context. you'd

Matthew Farrell

that, that, behind back to going And product. to of win you to But the hit a chase is event, back chase we're the consumers. obviously, in try cyber it's extent going Kevin. as when on To is course, Hardball, going No, the be numbers promote, to see number. a deal, sidelines expectation with to new like we're which lot yes, as far yes, that our a not XX% of going to you're obviously, we when sold to on was spend category money XX% be spend to a yes, like

Kevin Grundy

then on. Okay. follow-up, it and I'll A quick pass

portfolio on pruning. Just

for time. very going part So occurring been had think CEO year, long of transition, I and March. not you've has the is We naturally this expressed to Rick, generally be which strategy opened in which a the company's

bring How to parameters, You if just could -- company if you newer stool, of be what potential a on an it like need give of seems a of update leg us the sort will, to timing board. potentially strategy? you CFO on will scope, the

Richard Dierker

is as we sound. well. stuff in The strategy mean I to got keep The We're we're growth. you company do, lot to of leaders extremely that a is performing a backdrop, Yes. remember, e-com doing. going

say about been are of any not early to maybe do -- we remember, conversations at. I'm of internally, strategic acquire, around more As what It's we that's great But We acquisitions. don't, that our integrate businesses have our more we year, mid do things when the hold to and brands that brands. go brands, acquisitions. we every of do an example, we have. I'd root few value to we we we causes M&A address that. are front next a like it internal it's And know run company. we'll that. brand do and or a going when to uniquely for can creating and take then we've value we long have And mirror the or up doing in talk Every that time. grow year, value. things kind is we or what a back, and destroying in that -- really best-in-class. we We teams got turn usually identify, go to But extent portfolio to just all

We're our in We of share businesses. have most gaining a high-performing company.

strength. So of we're a position from coming

Matthew Farrell

of to X remind new from got job January want I of if back think to of I outside. a marketing, I I Kevin, R&D, when 'XX. everybody, in head those chain, had of supply X Within years, couple the sales, too, the came a

of ] we've a here no we get that talent down got numbers the year can So lot way [ lot the have up talent core rock we such There's year, We There's a been of a just and get before. company. just line. after of solid we the here.

new about, couple of I all searches, So company, new ideas, some we're think excited get people a yes, energy. the in new there's

good a really in we're think I So place.

Operator

with We'll JPMorgan. take Andrea question our next Teixeira from

Andrea Teixeira

follow-up side, your margin the the And commodities be M&A. should we thinking XXXX. on gross how timing in a fiscal of about and influence the of contracts the view, our on especially certain So politics ahead

as a I I just very haven't thinking your what you're you're think that's only follow-up ] in of you're how about the know but targets asked an are, how and like terms [ the update purposeful yet growth. cautious and on we question about landscape. inorganic seeing

Richard Dierker

I say, do inflation. question. take commented I'll I would on, already Yes, the we kind margin of gross see

inflation. As see we look forward, we

productivity. is Our that job to offset through

was will come outsized step hedging And but though, and time. like not usually big you that indications not we growth. do, believing those down we of there as economy demand As back, some taken stable the commodities a different U.S. a macroeconomic position a take of as have over much China really

-- expectations So probably I that's we as of for you our a indication good would tell forward. look

Matthew Farrell

Andrea, clarify could your you M&A? about other question

Andrea Teixeira

that. in Matt. was algorithm part necessarily, long not been term, just you it's more evergreen your I I like algorithm. Yes. model indirectly does companies, long-term course, create because But -- create of [ you growth these give the is of what as you know does include ] future it's brands of you how not as thinking you No, part and your and -- -- buy

accumulating you're it's you've thinking a cash So more you -- I since acquisitions. been like and since was while done

very were year Of course, accretive. the last very good,

should approaching focusing of how be So this more point? be just Or that? thinking we should you're thinking at inorganic we

Matthew Farrell

generate on much cash. We we're so always look, hunt. the Well,

strict. pretty Of course, our criteria is

grow we'll -- fussy are to businesses X% about faster, It you do could is or on going couple fast growing then a depending of that the that buy. categories but can buy that for be things which of true have we to couple a pretty So they forward. X% years,

I'll had not would we focusing didn't buy time, go back where droughts everybody, say, solely where we've existing But the remind portfolio. had no, saying on that you I periods business. we're we've before, a So we're if in

if between we at one that period, next probably we XXXX. look bought When and had in But Orajel, the was through 'XX you a years. the think X-year longest I BATISTE 'XX. and great so one was X 'XX,

not we're ] -- -- going for dependent it's [ algorithm isn't acquisition. upon our So an

Richard Dierker

most we acquire, and identify more Yes. as look are than reason acquisitions the -- to successful And we're and we because grow the fussy. reason integrate really back, you

of part to make continue do model, We deal when to want that's and we to right the deal. do going be. sure we're so And the the that's we what

Operator

Falorni take question next We'll Filippo from with our Citi.

Filippo Falorni

your give year maybe I from you about innovation, further ask this and business? a you quick potential and And plans can And follow-up. for contribution wanted and any the the us laundry innovation. XXXX in of to of then rest areas like innovation just of some context

potential any So that was China some for there on and we from about from the [ portion reported potential were on elections margin, you tariffs? time, last remind some tariffs, on us business think exposure gross the can as China. implication WATERPIK Maybe ]

Matthew Farrell

incremental Yes, thanks net excited about innovation. for sales the X% It's XXXX. we're close actually question. On us to innovation, around super for in

don't So product remember, that's contribution, gross high we gross bar. a sales. incremental We have call new call don't net We sales.

fantastic. So about kind That's is half be used which innovation, X%, from coming of of our X.X%. growth accelerated. to been is It

that And so muscle. built we've

have the Carlos, lot We that doing commercial innovation. I on are team continue. well a in in across we to expect all of different NPP, inputs. really our our leader leader Leslie, R&D;

even great we on XXXX We're pipelines now. or the as have even about forward, look 'XX. right think talking we years. early over XXXX conversations and next talking really about X not We're I X

implications and I investment behind alive is our like a things. keep did So say of and we're China, driving it. On One import it there. to we and everybody, that well, aware we're codes, well muscle's X right, just would of SIC investing behind codes. going reclass lot

a you impacted. helped has and as what may draw that be around circle not so And or may

outside production of thing is moved The some second we have China.

actions for mitigate material business, taken impact. And but so that to and it's the are there place we've that plans WATERPIK in most

Operator

our Bill question from Truist Chappell take Securities. with next We'll

William Chappell

back Going vitamins. to

behind are with understand Help It you seems down a So sure time category are being the X business XX% green tough mean, [ in I flat, the basically spend I guess thinking now I'm to money getting at ]. is things being it 'XX? more you and standpoint, understand I from need because shoots. Or having just things. I'm One, it you me not work worse. down a like

ease and back you so it for it of step put you lot and money or and manage of more behind cash. up can more kind And can either a

XX a also standpoint? we are understand point that business. maybe impairment of acquiring decision related. kind years I in fully at So charge the don't And the then second, after

me was if anything. what says, the and understand that So that you help can why there maybe and timing

Richard Dierker

is would model the Yes. -- take growth book. forward is -- come on since expectations, as rate that impairment the assumption guess, down at when we of Sure, and the Bill. rates growing an what is looking is, I what our just and originally -- expectations are well one margin charge, say, let all do our what assets I that those second me growth we put and they've our on first, has is our as all category the

say, And after that and right? The our current growth oh, profits amortization of numbers, -- a strong reconciling they kind we what expectations versus used we and that, have it's have number a and gap and to as intangible or value of have original we aren't the future as to so we is be.

a you And so XX take after. that's charge years how

putting you're levers will and on some that Your first behind not right, promotions of pulled money that to advertising. trade question going And and more year. We're few we was on That working as -- we do this the of is we why hoped. not had think chase spending -- it? was we go be incremental a

is focused core our they We why And make delaying can working, so we're are and thing products Some the green the do single things on the think full a the -- are free, hitting shoots We're we piece. we marks on [ on consumer. vitamins. key the innovation strength of sugar important that company that do sure biggest, the market have that's the they have of most -- that this few up first our on taste is our we've back. so the advantage ] vitamins time years reformulating in put plusing that in

and So putting spending better or on in to they're think, or do spend. trade than getting position us another all those a way are, important more more things packaging I compete, displays

Matthew Farrell

thing to we add excess goodwill. when going be you buy is And purchased the that [ I'd largely the Yes. is that assets only pre-overtangible a business, to ]

green dependent was a So not commentary. in far And DCF as model. any the our that's all as shoots, that of write-off, upon always going part though, and big to be it's

we've would up asking about that green say we shoots, control. we think we're I things somebody offered done can that the

the post [ have benefit And the and We growth retailers. And share and on a in in as realized business not improving It's in ] through our new really seen lion's the been some on we by and of some products. and this which COVID, meantime, the work business. supply now the struggled have just is working chain, -- CRITTERS. L'IL place doing in we've good we

messaging end, things in So we an was the have through to all that's Rick to of it's ahead innovation is and -- and going the ahead XXXX not. graphics we're But thought be talked of us. And we dependent of point, packaging the about, was some going inflection meaning in innovation and things and it went positioning upon the be as advertising. That was us XXXX. build changing the

have So conversation this you. time next we different year, we hope a with

William Chappell

conversation. leads a on just to we year, be having Got it. me Which next won't

few more you for the a have on we'll the on know I Matt, -- the on retirement congratulations months, Rick So promotion. and

Matthew Farrell

Okay. Bill, I New hope to you it York January. in make

William Chappell

it. wouldn't I miss

Operator

our Tong Olivia take question We'll from Raymond James. next with

Olivia Tong Cheang

more and in particularly well. and retirement recent ] promotion that primarily the question and litter [ on you is Congrats segment with as guys benefited some My premium price around Deep innovation to of from, well. laundry, POWER Clean the you as SHEET

in towards are that you, would since more to your challenging we So little a or bit are get a imagine as backdrop, trade-up to your become when a more your more value obviously challenging more -- consumers they relative to opportunity does a relative average. pressured challenging more we skew peers go macros more bit into potentially consumer therefore, I

ability mix business given there. you bit pricing able to been in the to implications, the just the have benefit So about of eke continue wondering out And obviously a domestic despite lapping. then obviously mix your that all

Matthew Farrell

a lot Okay. We in got there.

quarter. willing as [ Hardball is to them say, -- if going you're to year, that's at because quite but We'll It's a ] share of the time I our seizes you X.X% I nothing grow. bit. in we Hardball ], disadvantage And we box. been year, And last category it one continue product, share a for down [ for January lightweight it's late, And offerings think be laundry think up, as the of to slower performance growth I contributing as think that wondering and [ that's over update our was But us. a one sustainable share premium was a to far in because gain our the SHEETS like want take just of it. POWER a consumer us. roll I as There's category. if maybe has boil as category, on -- of in a And products. grown been would it what quarter of this the -- would entire time, the ], the about which to pay it's hard to our after everybody seems given winner close goes rock. the to for like

we products, now core think we been that litter, focused portfolio products in So our historically because that and have our laundry has category our don't simply historically, where value. value our on because

over ] are and has them, So laundry to to bottle other over the offer products consumers brands us. we had in for the consumer and time those detergent, box our premium yellow yellow trade in products. up and [ value litter and we've other But traded

going in the in be I any companies, always So end, the product consumer think story again, Innovation for economy. to in any environment, most is

positive very particular. X feel we about So those innovations in

Richard Dierker

example, the still that's mid-tier tier. like value it's Clean, a And an Yes. in the for laundry category, Deep premium to just

and down folks are So can that. growing to because folks treat trading down areas. value up though, trading categories, It's other still in

[ a positive still environment. it's ] we in think economic net-net, So mostly

Matthew Farrell

margin And what was Olivia? question, your gross

Olivia Tong Cheang

top around line and within answered more question. progresses, impact I as you It but was the mix just that importantly mix time the of think

Operator

We'll Escalante next Javier with from take our question Evercore.

Javier Escalante Manzo

you geographies of in whether QX, on in that is wonder or the And just I reinvestment that business measurable follow-up. contribution there have also if too can early? business a it in acquired the the most are traction whether context you and in any brands expand I can the of international you then Or increase you seeing is flag Japan?

Matthew Farrell

out with many to our as goes international, considering doing including ] we're say to general brands [ this, subsidiaries. our the like so would in I well countries and so brands, we managers Yes. have call many region respect

would we in QX. on where spend that one brand category year next consequently, over to for or ourselves we where in particular we're so indexing going there's international, I drive is position just think And or any growth wouldn't be It's one can go. opportunistic we well spend. particular to But say

Javier Escalante Manzo

Understood.

Richard Dierker

brands [ the of a but to too we're a probably Another ] doing a also that, is -- about global into We team our [indiscernible] that excited great job few handful add was Japan. a is other they do with I a great can small It's a Japan to OXICLEAN. talk brands. opportunity great think we're was business, at relatively job early mean it about of It to optimistic. Javier.

Javier Escalante Manzo

you The Belgium into kind follow-up of Do is go is the iteration -- doing And the on mid-tier. the second business, this try Deep call well. that way. legacy, let's you like that Clean it

the OXICLEAN and need You didn't pan out detergent, believe, [ I ].

driving that Germany, mid-tier, this Do our helpful. didn't competition can it's you Clean, that consumer to be So can well you that contrast friends more anything the what the pan extension as from that ] Belgium with this to Deep around? retailers relative OXICLEAN that out [ into would is as is time feel in a you the success susceptible are something very

Richard Dierker

a it's Yes, fair question.

was ] go make simple to it's OXICLEAN a an the there -- connection. is we just into don't additive it laundry, brand. confusion [indiscernible] brand, was consumer -- And I it's a think as I but consumer try [ answer. not

early is tiers and is known the finding going just I much well why easier think HAMMER we're & laundry ARM for proposition. up That's down success and Here, a

Operator

Sandler. Korinne Wolfmeyer Piper We'll take from next question with our

Korinne Wolfmeyer

then a As think headwind. called to about around year spend. your as a there into particularly SG&A we and spend and considering? be bit of Anything next Is about VMS risk the business, extra SG&A out of anything head innovations consider due some head year R&D else these some this thinking I we we QX investments? for any should And we spend think year? of was should IT else be to you that as next next into the some how we to innovation

Richard Dierker

X% that's pretty mean, a I number good a and Yes. long We don't us. for of -- SG&A over been we spent period of and around R&D, time,

Next system anything Analyst implementing time in year, an our -- we're qualify But ERP did really or was that wouldn't just We'll redoing upgrade. which SAP January this an we is project, call that updating our I -- time. time in Day. the do last our for at point at XXXX,

Operator

any closing And or additional that I will was question. to call last over Matt the remarks. for back turn our

Matthew Farrell

January it seeing York end that in then, City wraps Day forward go at until No, at the to our at on We're I think up of [ ]. of looking New kind everybody for Analyst and Exchange today.

Operator

This does today's conclude Thank program. your for you participation.

at may a and disconnect any wonderful have You time, day.

Church & Dwight (CHD) 1 Nov 242024 Q3 Earnings call transcript