ACCO - Earnings call transcript Q3 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Third Quarter 2020 ACCO Brands Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference maybe recorded. [Operator Instructions] I will now hand the conference over to your speaker today, Christine Hanneman.

begin. may You

Christine Hanneman

is Welcome This Call. Senior of Director Good ACCO Christine Brands Relations. to Conference Third Investor morning. Hanneman, Quarter XXXX

other Speaking this ACCO are Chief Schedules on results certain and directly Chief financial adjusted Fenwick, today in reconciliation slides Chairman, forward-looking Slides net President the guidance. of reconcile amounts, and we inherent that the tax a Officer. President accompany Executive measures Boris Vice Executive this have or Corporation; Brands of GAAP Elisman, of to Financial do and measures call adjusted Neal Officer cash call costs flow, and adjusted per the posted most and non-GAAP integration results, the we our to quantifying accompany speaking When our about share, transaction, tax measures adjusted and release the Due leverage been free an that ratio exclude to and rate refer earnings reflect Investor results. are adjusted difficulty these in to call. and rate. accobrands.com. and results comparable earnings Relations restructuring not forecasting section of Adjusted may

on of pandemic to statements Forward-looking of beliefs COVID-XX impacts call, are the time on at the us made. management assumptions based statements the are including concerning and based the on company, available made the during the information statements the

for the third-party our the as release in financial regarding it, refer behavior that statements results cause and and government and to earnings distribution the our operations, economies and forward-looking operations, well and of responses results actual scope our of filings of the pandemic we could and to materially. to from its explanation condition and and time over economy how these of risk the for to local and regional Please uncertainties, COVID-XX Our an and certain consumer geographies, in duration forward-looking as on are impact factors business, risks SEC uncertainties to pandemic, factors response the which our consequences subject statements could and will differ differ evolve assumptions. actions global are Among the our results materially channels operate, liquidity.

statements forward-looking no to we going forward. obligation them update today, of assume made and Our as are

Following Q&A we will hold remarks, our prepared session. a

Now will call Elisman. turn Boris the I to over

Boris Elisman

sheet morning, the quarter Good provide Thank results, you I follow impact additional color the will few fourth and of comments Neil will reviewing everyone. more COVID-XX third the for third the a quarter business our us. including me joining on implications with details on on minutes for quarter. Net and and spend very our million. expected, down and declined we'll improvement That's declined second substantial take cost third reductions, sales balance XX% your year XX%. cash sales quarter our with to results. rate lesser than I'm a the a quarter outlook. over prior at when Then $XXX we versus pleased questions.

was benefited cost Our at EPS as of actions better high the reduction end guidance we taken $X.XX and broad from worldwide. adjusted have relatively sales our we

products the of quarter, third economic improved with They education, business and still business our recession demand global quarter that worst portfolio. the with the our from strength, for low makes compared third the remote of and demonstrate home, balance our quarter more middle This in While unemployment and by in confidence. being many much working results breadth second impressive. product high the environment the of in impacted we're geographies our lifetimes

on focused and Derwent large strong Online and stations, on binding accessories, declines home or consumers, bulletin technology Sales laptop machines that area especially use and growth whiteboards, product saw in-office done success had were line technology mitigating shredders and lower or usage have any We TruSens are are Art boards, with channel, in-school demand. air customer good else. well. have in purifiers, did not a tools computer portfolio DIY good really dependent The binders or supplies parts soft. job that our laminators, somewhere growth on partially of docking of for We sales private are Kensington demand. one areas large channels and focused

traditional were by store lower brick-and-mortar weaker reduced demand. traffic back-to-school While demand, stores and resellers and business impacted

had We very also and quarter since Again a million by managing Australia North pleased America, Asia in job Overall did well. the and an with year. and them beginning New excellent expenses our quarter the did I'm in the million $XX of results. reducing $XX EMEA Zealand relatively strong

physical and businesses some provide returned to reopened, economic continue governments consumers During students support to companies. schools the more many quarter to third and

return people our we and X% many recovery for and the strong only managed with employees least our week. at European sales performance in comparable just had days their to throughout the to for increased. X, more in improved in sales countries its challenges, Europe, schools of down than other strongest is quarter. September offices, have the is a recovery Despite the that current better our reopened, went schools sales impact area, environment As Most person restarted the Europe reason pandemic economic In a But the it offices not on few the EMEA. geographies.

calling supported wouldn't. and did our competitors and great teams stayed when Our customers a of We them, job throughout our open pandemic. many or couldn't servicing the

gained in and products, seeing signage are quarter. we due third share categories all market DIY pandemic. result, to lamination took shredders, the a manual more and increased demand in good that As saw tools, the We business growth

I'm with a especially quarter, had new also partitions in America but the results pleased social such North for EMEA. environment. robust, still We considering the demand good less products introduced to when as our office. meet at distancing very

in the products K-XX the school number in And this U.S. the demand was The sales Third third remote starts quarter. in-person estimates XX% U.S. participating by in quarter. the Canada impacted were That negatively back-to-school in reduced learning quarter in of approximately were not in industry that situation students for XX%.

demand will extend in products As quarter, believe back beyond more students in-person the summer traditional school fall and this the winter. to well into education go we season for the the even fourth

or have share had and of note-taking five XXX% outstanding growing down, maintained large a America, While over strength led strong believe products. deal home demand work year-on-year back-to-school an Kensington the we North our taken overall brand. the from quarter by Star a in from sales we in were for category

still Our significantly was in in are down schools remotely America, third quarter Latin because and Mexico. in operating Brazil closed

and Latin difficulties through continue expect fourth in next early We in the America year. the of part quarter to

the our continue now. to customer our home of demand. warehouse All quarter do open to in and meet extent have office third remained necessary and of so quarter Most worked from production during the facilities to the employees

virus be have we business economic when contained normal schools a still for to more around While and place. improve, enough will offices our and reopen seen take there's uncertainty lot fully activities when the will of

and current We quite continue to environment, the expect as in time. challenges to some take the adapt both we economic strategy to opportunities to respond our recovery

We and specialty flu, as are result. are target TruSens, portfolio changing support a We're behavior air smoke. investments we product allergies, odors brand of assuming a shift post-recovery in filters our increasing channel consumer launching by and to pet products and wellness

upon this our see other next to wellness strong and later launching products year build will You year TruSens momentum.

a pipeline items work and Kensington customer home Our has orders. is of also line from solid adding new

consumer direct direct work We home from to for ecommerce investing will of personal satisfy our growing to line needs be shredders in and capabilities demand extending our to increasing fulfillment. we're appeal

weak. other such format the products of we investments products demand side, wide as our remain On are office some the and large to such in for whiteboards, reducing commercial as expect laminators we

will the we confident are We withstand challenges. current

to accelerate We also believe more the need we current brand transition environment our to a take and company. advantage consumer-centric of to opportunities creates, the

We base this are to work continue progress our we'll pleased and thus with accelerate transformation. to the of far

a consistent a sheet, strong strong with and cash company, are large free deliver global balance diversified We flow. will

as proactive manage Given able financial have we we strength to good costs, expect be our through current reduce and maintain liquidity the taken to the steps we environment. to

Our expect management and and over made we years strides overcome to I industry create profitable has before, great economic company. more that difficult have to a more the resilient continue. team and conditions

him for call segments, the Now, I a commentary, and the review Neal? join Neil outlook answering questions. other to of I'll over in will financial and then turn our your

Neal Fenwick

response COVID-XX. actions morning to COVID-XX customers credit discuss hybrid business the ACCO from operational, Brands, and products, manage Those Brands, my learning, in including school government disruption, its Boris, remote throughout from on comments. effects users our of orders, manufacturing circumstances. distribution, customers, work And end supply impacts and the you, and and chain ACCO pandemic, to the of taken everyone. taken under have financial inventory of risk good going the I'm impacts closures, and other and home, to have we its the include end Thank users resulting actions its

due to XX%, reported Our the sales of demand third decreased COVID-XX. impact quarter net lower from

Kensington that growth air focus remain noted, in sluggish strong accessories school home we saw America as sales weak. Boris on and lines work North commercial our and and purifiers, computer from were back-to-school but sales As its TruSens sales product such

Third of EPS our $XX quarter at reduction sales efforts. was relative million $X.XX. and per Adjusted was income net $XX was adjusted was on end or based income net high better and $X.XX cost share. million Adjusted EPS our the outlook

XX% unfavorable percent compared primarily expenses sales in lower largely was cost almost $XX with offset last result absorption, SG&A compared sales product in XX% America from of last the SG&A primarily flat and was million margin gross and mix of XX% a was by declines Our year, cost decrease international lower because demand. million were with And with the of as North fixed XXXX. deleveraging. $XX efforts, reduction of year. because

second protect quarter Mexico changes which government we business quarter. employees implementing qualified million restructuring in have to February achieved additional near-term. the second announced to America taken in as The that total for we quarter produce including an to more employees both programs COVID-XX is health furloughs. in second took reduce headcount aggressively a so protect many benefits quarter second the of we when we take quarter, response $XX third charge and initiated from business annualized restructuring $X we structural the to and of quarter In permanent we expected restructuring in the In reduction one temporary early to savings our safety productivity $XX million or third rate of In to actions. including in in cost we participated we As and quarter, earnings the our million. than cost cost charge actions rather North our layoffs and in the and indicated reductions to reductions and normal our run took releases, and keep to first and March, in assistance actions the

XX%. versus compared income additional cost expenses. fixed bad adjusted lower was on, operating sales, lower margin to was million to operating X% debt absorption, due $XX million for year $XX Moving and last provisions Adjusted

Our was rate adjusted tax level versus quarter reflects location year's the of last this higher adjusted in XX%. quarter third geographic tax differences earnings. The the rate and

Now, back-to-school or results. decreased let's America a North turn Sell-out in was fully status. hurt segment Net by to products of some details XX%. remote learning sales of in our hybrid

and to quarter accessories computer As weaker continue more North sales sales offset of e-tailers accessories noted in earlier, computer The Kensington quarter double a we the large of timing the than in shipment some purchases of of because prior the of Sales third third retained expect sales. continuing. later fourth the to back-to-school as back-to-school the contract their were year America and order. of helped quarter back-to-school in strong purchases retailers the shifted throughout anticipation have student to

offices had with income was of cost was expected, commercial result operating versus sales, absorption. North a sales compared North or factors partially XX%. were year adjusted million $XX cost was decline operating America lower America last unfavorable reductions. million As margin XX% many as adjusted opening. unfavorable offset $XX by weak were and The remained mix, These limited and in closed

sales of turn throughout level largely light and Now, quarter to commercial X% air in reopened result million reduced purifiers, EMEA COVID-XX impacts sales offset increased businesses quarter strong which DIY as a due to the $XXX growth in demand impacts restrictions to many were were and a much EMEA, as exchange. experienced favorable consumers TruSens computer tools, of schools had down third accessories. shredders; significantly compared fewer of were by second approximately with under Europe. the the foreign a Net stronger Comparable offices quarter. let's personal Kensington These and X% and COVID-XX.

operating last savings. of improvement million seen recovery commercial versus was our months an We year have a in cost margin adjusted EMEA XX% several with $XX of as now million Adjusted sales XX% products. year. of operating good versus result posted profit last of $XX

COVID-XX now The has rest of extent reserves as closed. because offset of countries of were bad sales quarter higher the product and mix, cost Net that And Profits by and sales. by significantly to also cost year lower result due be partially improved impact in of Leisure by lower demand adverse into fourth declined first of was this were many to see will rescinded both compared lower the lockdown segment. than due a the of we schools XXXX increases. to absorption, Mexico down million International customer offices is $X half similar the the Brazil Moving a lockdown the XX. the last impacted quarter. expect to remain significantly lesser debt reductions hurt in throughout sales and second million demand The sales current second and operating and as the from quarter. COVID-XX. of adjusted continue International income COVID continue to Victoria the been and Australia state expectation with $XX decreased to price XXXX. and in fixed the to

now and flow. move to million. and million Let's cash dividends the had free $X third paid in $X CapEx operating We In generated our of approximately quarter, million from million and $XX $XX balance cash activities cash net flow. we of was sheet

As acquisitions. year. quarter our to repurchase to not Longer we release, noted repurchase the shares we in cash fund of make plan use reduce flow and the for we free to our our dividend, remainder term, do debt, shares first plan

year-to-date. is have $XX less and we $XX spent Our million million CapEx outlook XXXX for than

million million quarter, $XXX $XXX At had we seasonal in to $XX the in repaid million cash-on-hand. borrowings credit had $XXX facility, quarter of revolving used we debt. our primarily million end, During and

debt which is Our times, net under covenant. well leverage our ratio X.XX was

to Now outlook. COVID-XX because let's as new environment It there related be as well our the the of much turn continues flare-ups. uncertainty is economy in difficult to forecast this implications to to

be it we making in improvement segment. is to a Europe impacted the products anticipate expected don't Our the and will America. The least to Brazil's segment weak. to especially expect our in fourth the ship help economic currently quarter fourth be which lifted, anticipate international likely quarter sales, America. lockdown Latin later we COVID-XX North demand the office North now is last it smaller to to be year, into seasonality we toward increases commercial still Likewise, is continues be season is Victoria down see We anticipate American that in adversely with offset to hardest catalyst which January. some quarter Nevertheless, our still commercial softness America fourth forecast. additional quarter. but commercial that year-over-year for normal December cases and continue to improve business compared in sales to most Latin has has segment. of in the we and area slipping products, fourth the in typically North EMEA recent Australia back-to-school been to in struggle strong America skewed challenged remain will seasonally

EMEA COVID-XX cannot could situation guarantee it of our are rapidly of developing We and impact negatively in not cognizant that also results. the

quarter decline adjusted in X% XX%. Fourth Our exchange an to is sales expected quarter on be are range EPS. adjusted in and of range outlook of $X.XX $X.XX. the a EPS foreign of fourth $X.XX impact to the sales The outlook adverse on includes to XX%

fourth free our with year. million, flow. to the our cost normal expense of $XXX at operating achieving least we reduction deliver $XXX we flow with flow And expected in compared productivity We generate confident approximately CapEx below for actions With combined above cash full expect expect quarter outlook, will to million $XX million feel year. respect can our $XX last we additional cash with cash generate to programs in million savings be that

markets We of our experience quarter payments million almost continue in $X year-to-date. have to late the reserves certain customers an export increased from million level $X and increased third in bad international and debt and

insolvency wholesaler main with along customers Mexican and American South EMEA Our are the the in concerns.

managing for mitigate million provision basis, year's inventory, sales million our as higher XXXX than continue we'll took third almost to to actively is $X a and moving we necessary. $X slow restrict third quarter, receivables are is levels. our similar On In quarter. We which own to last a year-to-date our the risk it

on Q&A, will take move I let's and happy Operator? your Boris where to to Now be questions.

Operator

[Operator from of Instructions] first McGinnis Chris comes question Our & Sidoti Company.

line Your open. is

Chris McGinnis

Good Thank the you in about you the just nice morning. you you gain of start quarter. market gains. that and have your Thanks. share landscape mentioned competitive marketplace? off, share that continue environment this for my out and questions and some position Can Can taking and to to we the go talk in strength ability Boris

Boris Elisman

saw market mentioned. throughout as in several areas. share gains Chris. we pretty gained share Sure, we market In We Europe, much

Again declined shredders, such quarter. done share and Our specific And on double-digits Five there substantial that. taking information the have for not about business in industry Star information has preliminary have share where look in market But accessories globally Kensington, a amount. we than large grown gained the market we gained worse information, If information, based we which on products high we some note in and has market at the business X% America. as also our yet. certainly countries organically, industry on the our don't our during And share our certainly, in final preliminary by computer XXX% North we America. grew based like gained over categories we've North

pretty it's broad. So been

Chris McGinnis

environment highlighted I And North when Anything here as follow-up. worried think you're think that seeing, payables. you're some Great. you about difficult you kind quick America you just in Neil of -- mentioned some just where one the about well? of

Neal Fenwick

Asia exception has to returned EMEA the North payables in of with wholesaler America one EMEA the levels. normal insolvency generally Australia No

Chris McGinnis

queue. my question. Thanks jump taking Great. back in for I will

Neal Fenwick

Chris. Thanks

Operator

of Capital. comes Gomes Noble Our from Joe next question

open. Your line is

Joe Gomes

taking Good morning and question. thanks for the

Neal Fenwick

Good morning Joe.

Joe Gomes

I wanted jump guidance to to quick. real just the

range So but you which The for that down talking had the think been same about XX% also guidance, the is for into pushed you revenues here. fourth in to you're you good. back-to-school quarter quarter quarter third fourth has XX% year-over-year the the mentioned

Are wondering else if the quarter has we're fourth why improvement concerned? being just you to conservative, So there going don't in some seeing is just no normally something see the guidance. that which in we -- there sales or back-to-school you

Boris Elisman

Thanks for the question Joe.

in part sell-out and for bigger back-to-school commercial think expect I We being it's guidance. plays North The be a working quarter. the we of do down fairly small but balanced business stronger in our much that relatively we're in remotely. fourth sales are be to still quarter, expect a because people example the to weight America and

large and with the In anticipate to we quarter will addition sales the a that fourth in Kensington added quarter. deal we in which third repeat a the quarter lot had in the don't

things, think of as the we XX% of all well balanced So as minus doing is XX% some back-to-school and our well net-net fairly guidance fairly those minus in weaknesses to revenue as anticipation EMEA international.

Joe Gomes

one that. quick Okay. follow-up. Thanks And for

quarter I continue third that that mentioned the monthly think about had you seen the that in sequential or was region-specific Thanks. you in in improvement? improvement third regions, -- sequential Did line. into quarter the monthly the in had top more second last the all quarter

Boris Elisman

Neil?

Neal Fenwick

Yes.

a it hood in just you the more different But stronger although a of than a generalism, countries a some month-to-month. different back-to-school it every occurred was months quarter, mix month single the to but as row. So But in little again just a the improved others EMEA improvement. little similar shipments second America. steady when look under because North international is yes in And if in did were

in third international. improvement the see was particularly the we So Australia for an the the of more because core of re-imposition mid-quarter. did generally in choppy, two lockdown markets in It

Joe Gomes

back I queue. so Okay, you. get thank in

Neal Fenwick

Thanks Joe.

Operator

Thomas comes from of KeyBanc Markets. next Our question Capital Brad

open. is line Your

Brad Thomas

out and and question. talking share morning like of customers just it's good and back in to in to see are Thanks is terms the and at hoping place you about what people Hi some offices to they you out for Neal. talk when have insights How I work we my employees and what about as orders restock to taking really to seeing as was you work. Boris they back go inventory. Are could you are the gone office? there? starting offices What reorders playing field it hear your restocking

Boris Elisman

Labor America, pretty that. home. of early Thanks Brad. much of North movement haven't working the status we expectations still out. Day, for And there example, being are majority still were in out from seen in and pushed not It's employees white-collar quo. America seemingly there. Things in We're people see much coming pushed but seeing after employees back North We September

a the trends the countries similar assume So stays U.S. environment U.S., similar to people few depends week and it in back people the Europe lot also Canada in a working our we the is. Certainly a at in internationally. seeing days more are going has from offices the other really than Australia on as here in guidance is least home. that it of we're very It's to circumstances.

assumptions are things are our how are again they today. So

Brad Thomas

different through Got really the guidance, channel to each and just the of sort mix have slowdown different a a that you. the the out fourth influence quarter how segments, channels quarter, you is are the And When plays you or question going expecting how can in mix obviously geography that's enterprise come mix quarter? to think performs. on Boris for the you're a the the year just slowdown fourth back aggregate to function occur any segments where in there or of about of

Boris Elisman

mix. the It's a of Yeah. function really

really prepared mix of And mentioned influence takes number XX% XX% that's quarter. us quarter the saw channel in come XX%. the larger part most his our Neil down see the we in quarter As and to the troubled the in generally to that we that sales commercial America. both third the being from channel the of that down for because the first remarks, in fourth office numbers is how together just North And a

Neal Fenwick

back to Brazil, the Brazil, back-to-school, until their election decision after Hemisphere basically in school will we our own will which calendar year-end. particular, push occurs see back-to-school out QX. Brad, the in QX definitely delay And and there's also push in Southern across significantly starts And means later that it with our into

Brad Thomas

more Yes. I And could one here. in squeeze if

we again think line to to for back as some all about you start flow-through you'll to and of each of point hopefully XXXX, And stay which to starts you've comparisons. hopefully, the As you degree contribution to the think normal. generate get some that out should you How able can to world And out? next just out grow kind you easy taken from may to the can bottom the sales get again what obviously, pretty be have a the costs margin we of sales growth year?

Boris Elisman

contribution me the I'll answer on part flow let through. and Let comment first margin Neil of that the

that's next correct a last expect to have if, improvement you a a if start things regardless year be If year then or -- COVID. we and QX improving have still the certainly comp impact. this COVID to we year tough we big correct in And if of expect that XXXX given you're are did

year. then improve comment So if But I or -- think in growth rest margin I'll growth growth will flow-through QX certainly let be on the sales. do contribution margin of sales some we the things Neil on the And growth challenged. expect

Neal Fenwick

more are line our Obviously, Brad, the and within Yes. top there top more cost will have. various I the improves we're we that things the mean, leverage line base on going clearly, dependent. business. we the

as temporarily reduced reduced. are We where have of a costs to though permanently opposed also our had year some

They're a debt, would and we as there we good obviously, a $XX this lot anticipate management by million as inventory I But example. of year-to-date year, I year. of we will this a and didn't out take. takes. year incentive having are earn puts so nine less anticipate to next after reserves contrast, hopefully, lot And which months bad would earn come a

profits. many QX So, additional as would ups but particularly and if obviously sales Boris our QX, to and QX, improve anticipate in downs, leveraging we continue generally said, through

Brad Thomas

you Very helpful. so guys Thank much.

Boris Elisman

Brad. Thanks

Operator

Our next question Steinke Kevin Barrington of Research. comes from

line open. Your is

Kevin Steinke

Hey, good morning.

relative cost already to you actions reduce how base to about Just thinking XXXX wondering the incremental you've to you're what look as done?

Boris Elisman

geographies reductions pleased our I be we our XXXX. Thanks business. structure side expect still we of further of realign Latin with Neil costs Kevin. mentioned we difficulties anticipate done the But our Yes. Very opportunities expected have far. will in some to the in the cost to the so have America. in reducing we

So how America well in us. streamline I think And we particular. that's things as an also we in could opportunity for manage continue to North

opportunities So do to cost in XXXX. expect there's that I reduce further

Kevin Steinke

all for now. Okay. Thanks. That's I had

Boris Elisman

Kevin. Thanks,

Operator

comes Our Reuter of next question of from William Bank America.

Your line is open.

William Reuter

Hi.

the margin talked In had mean Was that the favorable mix. I terms we fourth guess, the basis Kensington? of you be outlook than will just the quarter? on about year-over-year this deal that with in more gross you that does large And, pressure what saw a

Neal Fenwick

There are a combination of things.

purchases, they imagine really. of average margin. lower to margin Kensington more that drag reasons various yes, would you And which are on Kensington's contract So, within be commercial a lot Two mix. than the additionally, was of One, sold as part highest kind of going products less. sold

our the inventory our of one and those impacted other in structure just was high the aligned things in that low that also of gross charges cost kind areas. and need appropriately volumes margin plants, So we were to obviously get as drivers, but absorption

more the in I And gross which the think and anticipate third what the in what factors important there quarter than the is than We were the sales just so do quarter. in quarter mix. gross in fourth margins will we higher do that we to was margins saw see be understand. fourth higher typically

William Reuter

supply? since sales the sounds has when XX% believe back-to-school of that for me. guess, makes you That learning North regard it improved in of number they follow-up think I with then, might this then. excess the it sense. talk how one products, able And delayed that on to virtually just With sell-through like you Yes. sell-through And they're dealt of kids you at America? that have all your to retail do guess, back-to-school customers, I have XXXX they Do impacts think season? to

Boris Elisman

the a back-to-school and as to taken of they have put that and It's depends continue it the will able in year line, and -- good products. for stores the most cases, The carry fulfill In will Obviously, with that assortments affect back-to-school affect back-to-school do some particular somewhat on And answer will be full question, reseller. brick-and-mortar in And the Bill. even fall so to particular their we is, have storage them throughout sell for demand assortment etailers and products. put mix. that those the winters. continue demand others demand expect goes will it's to next again it the next year. reset It

William Reuter

to others. All Thanks. Great. pass I'll right.

Boris Elisman

Thanks.

Operator

next Our question from Barclays. comes Hale Holden of

is Your line open.

Hale Holden

my X taking had guess for you. Boris, I call. I for Thanks

your The you about period. And go-to-market you little the out the could talking a mentioned to potentially thinking get when do structure what pandemic if company? wondering you in first what that bit the of margin of I was could you're more script changes talk in change further and one is for about

Boris Elisman

to consumers. obviously mean both preferred by a are we're I sure. Yes, resellers, continuing And means really that in Amazon, invest online with that also working the closer channels lot but resellers internal fulfill capabilities throughout the our means resellers of for consumers. and DXC, to own And local world. to developing we directly be the have also it direct-to-consumer regional online able

areas. primary the are those So

a do much and big because are will to those do corporate work an channels and going dealers. commercial cautious it challenged that the be to small local in sales how But continue we have with important We to be the in few they're channel believe and next They the continue in still down still for expect us are invest resellers businesses some means selling many be That's of channel to we to quarters. regardless who we their particular well. to countries. we independent

Hale Holden

gaining filled is high question Five-Star Got away competition low, capacity it. now industry sales or increased volumes mentioned see And capacity you volume you from expect fairly then with would players, share you label with to you -- when Kensington. more players were second private and that with that? and just the potentially I But guys private lower by preclude mean or label does from my pretty

Boris Elisman

our reasons the we find well Leitz it depends one well We that think reseller it's of in done hard a to matter. know really will both known I and we've times of done there brands know resellers on they that and brands comfortable brands and needs. well and we've tomorrow answer support question prefer the the sell that they're with, that their some they in state Five-Star, channel. in true And other of with will with distress strong to and that be this of both uncertainty, think consumers environment and really is tried the

big given us for our strong plus So brands. a portfolio of that's

debt. retailers they in manage just trying some will the and for service those On cash growing to hand, more managing have market. just aspirations for that label in have be think that have their private putting the longer-term to their the of stores. participate And flow I we objectives just any to don't other no for sales are short-term because They're margin retailers do

continue as our on brands the general depends So case we think how talking brands it share and our very taking to think of the we're will really partner we're the that about. that strength with forward. given pleased are go we be that We Overall, we performed.

Hale Holden

Great. Thank much. you so

Boris Elisman

you. Thank

Operator

Our next Bill of Truist from question Securities. Chappell comes

is line open. Your

Bill Chappell

Thanks. Good morning.

Boris Elisman

Bill. morning, Good

Bill Chappell

you year quarter, -- only back I going be Boris, virtual told the expected third sales would have just of to kind XX% that the XX%? a ago in schools be U.S. for down a to going would Hey, were you if the -- of

Boris Elisman

No.

Bill Chappell

preparation, of well like just as Is that? you it just or for is prepared that feel well? than fairly it indicative better you the category it the were Is

Boris Elisman

it. think I were we for well prepared

on category one one not thing we it's season geography. and important any I the We're sell. but a us, very Certainly think product any only we is have diverse depending that or back-to-school an line. broad not for

and the back-to-school performance and offset our very North in strong Kensington, in of performance was particularly some globally EMEA. weakness in America, by strong And

with working I sell because right. the some other large expected diverse portfolio diverse have with of and products offset such geography much from of mean, that numbers home, students categories absolutely to you're So, bigger of countries. the other demand. But one we and able on and to, those weaknesses the effect channels of would a the we're

Bill Chappell

your business in like you change? there? extent, to few at time, go re-looking next question. structurally that virtual Got U.S. some alluded it. space in next the and few shrinking you I I as terms Europe as looking I dramatically separate kind people it methods. think And seem to kind of a -- will in mean, at prior on different of of change talked know forever quarters, over how work of some or the would go-to-market side to at it the then, of But, business you the office sort Are business, look of years part for about you the the of but that --

Boris Elisman

Bill. absolutely, No,

I excellent are. And we think an that's question.

We be addressing discussed, and and that buy both that. certain end at that's with consumer-centric, We think buy. our at changes at are by I continuing categories investing part we're are to And to an we're about We business investing about in to mix. that that for be products our channels more strategy acquisitions. look certain others. And And years We've they will part looking end believe we as less future, and looking important in permanent the users strategic products be structural also reshape also talked of more which already certain now. organically investors in this how acquisitions of there that driven. our several think user

Bill Chappell

Got me. for the one it. last And

I back-to-school. in the percentage the it's later You might we're at mean, end back-to-school what's last about in know that say, of, you the they back-to-school. least seems largely it I And this, start kind all but at of year was? talked getting have September, I a were of Because, think Europe would

the So, U.S. how obviously, much worse, is does compare I how versus is expectations? that mean, -- that running but

Boris Elisman

back-to-school September school. X. went to Europe went -- all was Everybody they

Right primary, certainly Maybe re-looking rephrase as In back-to-school XXX%. if mode. I K certainly high But in countries are of mean, Europe. most went some now, XX% at in remotely. of no school U.S., -- it to for mode. were impact the if COVID, there more that. work are for high universities a X, it's at, delays in And I at the hybrid they it's But concerned Europe, middle in look the schools, kind hybrid and a given and was certain schools through certainly increased us was So was spike and look in college any XXX%. you far QX as

Bill Chappell

much. so you Thank Great.

Boris Elisman

Thanks, Bill.

Operator

comes question Hamed of Khorsand next BWS from Our Financial.

open. Your line is

Hamed Khorsand

in the make have could product Good you since cost products, for scope the you ever morning. be? in think more if you COVID. you what to would Boris, Hi. year the past implications have you talking quickly? Do products? of been were this the back the office place go that And about consumer-oriented to change switch centric right structure And cost

Boris Elisman

consumer, margins I the think certainly as place shifts do easier spend gross and cost to up go well. right that our position lot we as constantly will structure I for go have spend up do But be in mix than and more that to our gross either in increase of expect to kind. margins marketing a position a will our to rise costs. to reduce that's be our

space. have or your incrementally I'm we second So work part? all Hamed, we're glad did have add this Did the doing I that spend generation consumer answer demand as get towards a an now to question, opportunity you to into

Hamed Khorsand

equipment? able The to, commercial revert you second how back far the to quickly can being as part as

Boris Elisman

could. We

changes very We that are we're believe permanent. any anything, making are very, I don't --

believe the difficult that that believe to at while. going and a predict the is believe do these back products It's come of what's many in in we changing going not least to hybrid long be demand the types environment. is shorter a that or behavior for we do from for remote people sorts to Although, terms very there a time of a residual COVID working on But of more effect medium-term, happen now. will to from we

in for will net-net demand down. some be overall office these products So of

Hamed Khorsand

That’s Okay. helpful. Thank you.

Boris Elisman

Hamed. Thanks,

Operator

for back remarks. any like further call over turn the no are There questions. closing to I'd to Boris Elisman

Boris Elisman

your in our are business, approach are withstand to the proactive COVID-XX from in seeing this disruptive we're To our ramifications ACCO Brands. taking. everybody to of you confident a for crisis as Thank ability we're summarize, but result interest we

growth also returns for longer-term, company time. confident Bye-bye. our to position next our our talk Looking remain we to to you ability Thank continue for you. and the about shareholders. improving We'll future and

Operator

the conclude Ladies this gentlemen, and conference. does

now disconnect. Everyone have may a day. You great

ACCO Brands (ACCO) 28 Oct 202020 Q3 Earnings call transcript