Edgewell Personal Care Company (EPC) Earnings Call Transcript & Summary

All right, folks. Thanks for bearing with us. We're -- we have 2 more left. We got Edgewell up next and followed after that is going to be Boston Beer. And then accordingly, after Boston Beer, we're all going to grab a beer. Please sign in. And I'd love it if you -- any of you all want to join us because we -- I feel like I've certainly earned it this time. But before we get to that, we've got a fun story, and I've done -- it's been some ups and downs along the way, but we've got Edgewell Personal Care up next, and we've got the 2 big -- the 2 leaders over there, CEO, Rod Little; and CFO, Dan Sullivan. It's been a lot of trials and tribulations for them since they've taken over the helm. They took over a business that was -- to say it was in a rough patch would be kind and probably an understatement. But they've done a lot of heavy lifting since then. They took a business that was what many declared to be structurally [ expected to ] decline and they've turned it around or posted now multiple years of organic sales growth. Not getting a tremendous amount of credit for it. And obviously, not all that's translating to the bottom line, given the cost environment right now. But I do think this is a story of improvement that's not yet fully reflected in the stock. And to tell us more about it, about what the changes are that they've enacted and why this business is on a more durable growth trajectory, without further ado, let me bring them on up. Rod, Dan, please, welcome you on stage. Grab a seat, get comfortable.

Just before we do, Jason, thanks for coming out, and it's good seeing you. Last time we were here in person, we had just announced the Harry's transaction. A lot's changed since then. And we laid out our new strategy about 2 years ago, and it was a strategy to return the business to growth and sustainably and reliably create value. Good news is we're doing everything we said we would do. And so without me saying more, I'm going to turn it over to Dan and let him take you through a few details, and then we'll get into the Q&A. Dan?

Thank you, Rod. Good afternoon, everyone. I'm going to go through this pretty quickly, hit on a few topics that I think will play well then when we get to the Q&A, and Jason, you can certainly take it from there. Three key takeaways for today, Rod alluded to some of this. We unveiled a new strategy about 2 years ago that was based on durable growth out of the portfolio. We think there are clear proof points to that strategy, which I'll share today. We, like everyone else you're talking to, is navigating an incredibly challenging cost inflation environment. So I'll share a few thoughts on how we're doing that through both cost reduction and price increase revenue management. And then we'll talk a bit about what we said a week ago in our full year outlook. Our strategy, if you boiled it down to a single page, would be this one. And the idea here is bifurcating the portfolio between what you're seeing and what we call accelerate growth, the right-to-win side of our portfolio. We have market-leading positions with our brands. We have grown at a pace that exceeds the category. The categories are all growing and we're therefore gaining share. This is about 25% of the portfolio, growing at double digits. It will get to about 1/3 of our portfolio over the next 3 or 4 years. The other side of the page is what we call right-to-play. It's our Fem and our Shave business. Those categories have gone through a bit more challenge. We are now seeing them come back to a healthier position. Certainly, our portfolio is embedded now with growth, thanks to the Billie side of the equation, which we'll talk about. This is a piece of the category that we see growing in line with the categories that they compete in. So you've got 2 different ends to the portfolio. The news of Billie is something, and I'm sure we'll talk about in the Q&A, that we're super excited about. This is a really compelling strategic fit for our business. It is a disruptive share brand that has been DTC for its entire life prior to this February. It is now in the midst of a Walmart rollout which we obviously, post acquisition, are executing against. 20 share in the category, #1 SKU at Walmart, 3 of the top 5 SKUs in the category. So if you put it all together, and how do we think about durable 2% to 3% organic growth, it's based on this combination, right? It's outpacing category in the right-to-win end of our business. It is growing with category in the right-to-play. And if you add all of that up, it's about 2% to 3% organic. In addition to growth, there are 2 other elements to the business model we think are super interesting. One, you know us well for, hopefully, if you know our story, which is taking cost out of the business. We just concluded a 3-year program called Fuel that delivered about $280 million in cost reduction, and on the heels of that program announced another $125 million of cost reduction over the next 2 years. So in this environment that we're all faced with, super important lever for us around margin. The second element is strong cash flow. This business spins off healthy cash flow, and we've just started to act into a more balanced, more disciplined capital allocation strategy where we continue to invest and the brands continue to invest in growth, but we've balanced that now, initiating a dividend a year ago and accelerating our share buybacks this year. It all leads to the financial algorithm that you would have seen 2 years ago that looks like this, again, sustainable organic growth at the top, profit EPS growing at a faster rate than sales. So I mentioned earlier proof points of progress, and let me hit this pretty quickly, but I think it's pretty compelling. I know we'll certainly talk about it. We've been on a journey to strengthen the capabilities of this organization since the last time we were here 2 years ago. We've done that through continuing to be really good at cost reduction. We've augmented that with a much different, much broader, consumer-centric innovation program and talent, and we have completely re-platformed our DTC business now. We've brought in-house all of the things that we used to outsource from content development, from architecture on the site to execution and branding on the site. All of that is now inside the Edgewell machine. It has led to a slightly different view of what we look at commercial fundamentals. We are better at new product development and innovation, as you can see some of the examples that have come to market this fiscal year, and we have stayed in investment mode behind these brands, something that the old Edgewell would have pulled back on. So we love what we're doing on the brand side of the business. We think the programs are compelling. Therefore, we're investing in those programs. Not surprisingly, it's led to different results. We have seen a steady improvement in distribution on shelf. We -- coming out of the split with Energizer in 2015, we saw constant years of losing shelf space. We stabilized that in 2021, and now we have delivered incrementality on the shelf. And not surprising, when you do that, share follows. We just came off the quarter of our strongest share performance quarter in over 3 years. All main categories in the U.S. performed better in the quarter than [ L-52 ] trend, and all exited the quarter with better share performance than the full quarter. So we really like the momentum we're seeing on shelf here and it's showing up in our share performance. That then obviously triggers what we believe is the right to grow on top of growth. We've just taken our full year outlook for 2022 organic sales up to 4%, and that's growth on top of growth because that's roughly the organic sales we delivered last year, and it's widespread growth, right? You're seeing it across geographies, international and North America. You're seeing it across portfolios, and it's pretty evenly balanced between price and volume. In terms of this year, not surprisingly, we're all dealing with a really tough environment. We'll talk about that probably more in the Q&A. What we're doing about that is a healthy combination of cost reduction, which you see some of the initiatives there on the left side of the page, and price execution. We've just taken price in the U.S. in our women's and men's branded Shave business and in our grooming business, that's about 15% of the portfolio. We have more price to come in Sun and in Fem. So a pretty equal balance here of how we're managing inflation, about 200 basis points of cost takeout and about 200 basis points of pricing tailwinds. This would be the math then, and you can kind of see how we began the year and what we were thinking about encountering inflation and the role of cost reduction and price, and how the cost reduction piece has stayed consistent. 200 basis points is a really good proxy for how we think about cost reduction. You can see the price execution beginning to ramp up. We'll exit the year in the fourth quarter at close to an even balance of 200 basis points of cost offsets, 200 basis points of revenue. This is our updated outlook for the year. I won't spend any time. You probably have seen this already. But again, taking our organic growth up for the year now to 4%, which implies a 5% growth in half 2. Putting it all together, I think there's a lot of elements to the story that we're excited about. We, of course, have a lot more work to do. But the way that we're architecting the portfolio, the distribution outcomes we're seeing on shelf, the innovation that we're bringing into the brands is showing up now in top line performance, is showing up in share and obviously is showing up in our financial results. So with that, Jason, I will pause there and turn it over to you for the Q&A.

Gents, that's a great opening sell. That's a great way to get us started on this one, so thank you. Rod, I don't think all the change is reflected in that presentation. There was certainly a lot of change in terms of the momentum with retailers, the trust you've restored there, how the portfolio has evolved. I think there's a lot more that's happened inside the walls of your building that aren't as evident on the outside in terms of people, process, culture. Can you talk to us about the softer side of that stuff, and what's changed in terms of the organization, everything else that we don't see on a day-to-day basis?

Yes. I think, Jason, we have a people-first culture. We say it. A lot of people say it and talk about it, but we've really tried to lead with that. We did a launch of a new purpose, values and behavior set a couple of years ago, just before the pandemic. As part of that, we interviewed 575 people in our organization. We did small group focus to get the words right and have it be a participative thing. It's now paying dividends because people come to work every day, it's been largely virtual like everybody else, but loving where they work. Our organization survey scores are up, the motivation levels up, but like anything, the old Bill Parcells quote, winning cures all ills. We're winning, right? And part of it is when we have categories in recovery mode, which we are, we have market share improvements. We've grown market share consecutively now 2 quarters for the first time since we separated from Energizer in 2015. And so people are starting to believe. And one of the things that's really cool is when you get the people right and you have the portfolio right, which we now have, and you focus on the fundamentals, a lot of the boring stuff that people don't want to hear about and you don't talk about every day, but things like S&OP excellence, things like being really laser-focused on consumer insights and the pain point that a consumer has and then bringing a solution to market, hitting the launch window and the ship window and delivering for retailers in a consistent way where you're now helping the retailers grow, that becomes a very different story than where we were a couple of years ago. And so we're not done yet. We've got a lot to still work on, but the team is better at every position of leadership. I've been here 3 years now. It's not a new team. We used to say it was a new team. I've been here 3 years. Dan's been here 3 years. And so we have a less new team that's more experienced that has a clear strategy, believes in where we're going and like the people they work with, and good things come out of that.

Yes. Yes, that makes sense. And Dan, lots of focus on inflation these days, broad-based, not just you, everyone. It's been a touch point now going on 2-plus years. What are the macro drivers of the cost headwinds to your business and how do you combat these inflationary pressures?

Yes. Look, it's a tough environment. When we built our outlook for the year, we contemplated about 7% to 8% COGS inflation, which would have meant about 400 basis points of margin headwind. That was our thinking at the time. Today, it's more like 11%, 12% COGS inflation and close to 650 basis points. And the drivers are kind of the big 3, right, commodities, wages, and most recently, freight distribution transport. Any one of those would be really tough to combat, and we, like everyone else, are dealing with all 3. I think the 2 levers that we're focused on are, like I said in the presentation, cost and revenue. On the cost side, this is a capability that Edgewell has demonstrated coming out of the Fuel program. And the beauty of that is it's in our DNA now. It's what we do. And there's a lot of runway left to go. Just look no further than last quarter, 200 basis points of cost reduction. And so we have a really good line of sight for that going forward. The revenue side of the equation and pricing is a bit more complicated, right? We have sort of led in price where you would expect we would when we're a market leader in a specific market and specific category, Wet Ones here in the U.S., Shave in Japan, we act like the market leader, we price like the market leader. In many other markets though, we're not the market leader. And so our strategy is much more about fast follow, and you would see that here in the U.S. with Shave, Fem Care, a really good example where we took a 8%, 9% price increase. And so in that model, we thought cost and pricing would be about a 2:1 offset in inflation, cost at 200 basis points, pricing at 100. As you saw from the slide, we've gone back in now and revisited pricing, and we'll be closer to 200 basis points in price offsets this fiscal year. And a lot of that is recent pricing that we took, again, following market leader, category leader. As I mentioned, in Shave in the U.S. we've just executed a mid-single-digit pricing on women's, high single digit on men's, and in Grooming, high single digits. That's almost 15% of the portfolio that, that pricing now is a tailwind as we head into Q3. We also plan to take another price increase in Fem towards the end of the summer or early fall, again, price following, and we will take a price increase in Sun Care as we think about end of this season into early next season. The 2 of those are about 25% of our portfolio. They will have a mid- to high single-digit price tailwind as they enter fiscal '23. So again, we're managing a very, very complex and challenging environment. There isn't 650 basis points of pricing in anyone's business. But we think our combination of costs and price, 400 basis points of offsets, a pretty good proxy going forward.

Now in terms of the pricing, I thought most of that aside from this next round of Fem and the pending Sun Care was pretty much contemplated in your initial outlook. You were already beginning to move on the men and women's Shave business in the U.S. So the only incremental pieces are Fem Care this year and Sun Care. Yet your overall cost baskets moved up from 7% to 8% to 11% to 12%, which is a substantial uptick. What's preventing you from passing even more on? Is it just waiting for the price leader to do it or just not do it? And those are the real governing factors?

Yes. I mean just to be clear, what we just took in Shave and Grooming was not contemplated in the beginning of the year. We took some pricing in Shave, but it was on a very tactical level. We did not take broad brush across the category pricing in men's and women's, which we just executed last quarter. So that is new. That's incidental. We did not contemplate end-to-end pricing in Grooming, which we now have executed. So all of that is new and incremental to our original outlook. And that's why if you look at pricing for us, we contemplated about 100 basis points of offsets for the year when we built our outlook. We'll end the year, we'll exit the year at 180. There is quite a bit...

I don't think that was clear. At least it wasn't clear to me on the last earnings call.

You're not alone.

Okay. sometimes I am alone on those things. Some comfort that I wasn't alone on that one. All right. So I think -- I don't want to beat a dead horse. So let's move on from that because I think we've covered enough on cost and pricing, at least for the time being. Moving -- I want to jump to capital allocation, then I want to come back into some of your innovation initiatives. Capital allocation, the portfolio looks like it does today because you've pursued acquisitions. But more importantly, recently, we see you lean in to not only an acquisition of Billie, but also share repurchase. And collectively, those have now driven your leverage ratio up to 3.5 turns. So what's next? Like we're at 3.5 turns, do we hit the pause button and wait so we get the leverage back under control? Is M&A and/or buybacks still in the mix of consideration here?

Yes. Look, I think in this environment, you have to be thoughtful on leverage, right? It's certainly something that's on our mind. Having said that, with the cash flow profile of this business, I'm personally not uncomfortable running this business at north of 3x levered, even though our guide is usually to be in the 2x to 3x range. In terms of where we're focusing, we have been, as you mentioned, Jason, quite active in M&A. And quite honestly, we stay active. There's a lot of assets out there to look at. We look at them all, we're highly engaged, and that is a super important part of the strategy you saw on the slides. Transforming this portfolio, getting into growth categories, increasing our penetration in high-growth opportunities is core to our strategy. And you've seen that in Billie and you've seen that in Cremo. That's $150 million of revenue we've added to the portfolio, both deals at under 4x, and both have double-digit growth profiles to them. So that's going to remain important. But the bar has gone up significantly, given the environment that we're in, given what we're navigating and given where we are in terms of this turnaround. So I think for now, the priority shifts a bit. Share buybacks, we've accelerated. We bought back $25 million in Q1. We doubled that in Q2, and we're going to stay active and on our front foot here because the value is simply too hard for us to ignore, at least in the short term until the stock price responds a bit to what we think proper value is.

Yes. I agree. And under 4 turns or roughly 4 turns of revenue for a double-digit grower a couple of years ago would have been compelling. It doesn't seem as compelling today because multiples have come in quite a bit. It looks like the IPO exit is closed for now. As the [ de-SPAC ], is closed for now. Are you seeing valuation expectations on prospective sellers to be reset as a result?

Not yet. I think not yet. The narrative is softening a bit. I think there's a little bit more balance in the conversation. But in the assets we're looking at, I think expectations are still a bit unfairly high.

Yes. Yes.

Jason, too, just coming back to the whole capital allocation topic of what's changed versus the past. We felt it was really important coming out of the failed Harry's transaction that was blocked by the FTC that we reestablished discipline and consistency across the capital allocation approach, which led to the initiation of a dividend at $0.15 a quarter. The buyback that we announced is very predictable, but really with a focus on funding the core portfolio, which we now feel like we have in a better place. And with that, the bar goes up on M&A. And so I think the other thing that me as a former CFO, Dan as the CFO is very talented, it's something that has been very important to us on the capital allocation front to really work that part of the model to create value. And we're just getting started, but we're actually happy with where we are and the flexibility we have with the cash flow we generate to think about that differently based on how opportunities present themselves. And with the stock at $37, we think it's a buying opportunity, and we're buying.

Yes. Yes. Hopefully, others agree. Hopefully, others buy in as well. The -- so the Harry's -- the failed Harry's transaction also caused you to pivot a bit, and it's pushing down the Men's Grooming side as well. which I think generally most people are probably more comfortable with because it's lessened your exposure to Shave. The Shave doesn't appear to be in the same type of situation that it was 5 years ago. I think we're on much better footing, even though people haven't maybe come fully to terms with it yet. So why don't we spend a little bit of time on Shave, because you got a lot going on there. You highlighted some of your market share performance in your initiatives. Let's start with Men's Shave in the U.S. because I'd like to force you guys to [ bray ] at this point because I still don't think everyone has internalized it. How big is U.S. Men's Branded Shave as a percentage of your portfolio now?

U.S. Men's Branded Shave, roughly 2% of the portfolio. You throw Canada in, it's less than 3%. So we don't have a big exposure to Men's Branded Shave. When I start with the company, the only question we got was about Men's Branded Shave, partly because the category was in decline, with use incident rates going down, pricing going down. Both of those have changed now. Use has stabilized, price is actually going up. It's a very different category. Even though we have a small exposure to Men's Branded, it's actually now a positive category from a value creation story.

Right. I don't think everyone's internalized that yet or believes it's durable. Only time will convince them of that.

The other thing that most people don't know about our portfolio is the majority of approximately 60% of our Shave business is outside the United States. And so we have a very diversified portfolio across Asia, Germany, Europe more broadly and then even into Latin America. The other thing about our portfolio that's very different than any of our competitors is we have roughly equal amounts of Men's Systems globally, Women's Systems, disposables and then our Private Brands group. So we're diversified geographically and we're also diversified within the category.

And walk us through each of those 4 verticals, then. So I got Men's System, I got Women's System, I got Disposables, I've got Private Brand group, each about 1/4 of your Shave portfolio?

Of our Shave portfolio, correct.

How is performance from a category perspective and from a company perspective doing in each of those 4 areas?

So from an overall category perspective, we start U.S. The category has returned to growth. And that's a combination of both volume growing as well as pricing now being positive in the category really across all of the segments. And so that's not just in men's, that's across all of the segments. Outside the U.S., the shaving category is still flat to declining. We've not seen the recovery that we've seen in the U.S. in other markets, primarily because shaving is a bit of a recovery play coming out of COVID, and we're ahead here in the U.S. in terms of the recovery and the reopening in behaviors. And so we do expect the international markets to continue to improve sequentially in terms of the overall category. Similar to the U.S. where, where Dan referenced, if you go to the last 5 weeks, it's a short position, it's a month on share we actually grew in Men's Systems. We've grown in women's. We've grown in Disposables. We're growing in Private Brands Group. Private Brands Group is a combination of opening price point, so low entry price point value as well as we supply people that like Billie, Solimo is the Amazon brand, a lot of DTC-oriented brands that are branded that we supply. It's a high-margin business for us. Structurally, razors and blades is still one of the most profitable categories in all of consumer products. And it's a tight manufacturing set still today where that 25% of private label business that we have is actually a high-margin business. At the contribution margin level, it's portfolio neutral, and partly because there's 2 of us that do that. We're the only manufacturer that does branded and private brands business. And we think that's a strategic advantage for us.

And you have the patent protection and the manufacturing, the capital intensity that creates a unique moat you don't see around a lot of other private label businesses?

Correct. Historically, and I was at P&G for 17 years, and I was exposed to the Gillette business. We tried to buy Harry's. We did buy Billie. We know Dollar Shave pretty well. So we know the lay of the land. And what is interesting is what it's still true in this category, there are 2 IP portfolios in the world and 2 knowledge and know-how sets of assets in the world. We have one. Gillette has the other one. The rest is limited in terms of degrees of freedom to move around patent fields and innovation and making changes to blade cartridges and innovation in the future. Our issue historically has not been the tech end. Our products work really well. The shave performance is very, very high quality. It's been around branding and getting our message to resonate with consumers, which we're getting better. And hence, the -- what you're seeing on the improved market share positions.

Yes. And let's get into women's then in the U.S., where performance has been consistently better, and now you've acquired Billie's. What do you bring to the table? How does it fit to the portfolio?

Yes. So for us, women's is a much stronger category. We've historically had around a 30% share in women's. We've got differentiated products within women's, Intuition all-in-one, very differentiated, unique product, our Hydro Silk range and then Skintimate, and so we've had a nice portfolio and done a better job on the branding. The Billie add into the portfolio is a really important move for us because it fills out the portfolio in that value segment, value tier where we've had an opening. And as Dan said earlier, it's a 20 share at Walmart out the gate, the #1 SKU, the top 3 of top 5 SKUs in women's shave at Walmart. And it creates a very portable story, when the lead retailer is super happy with it, everyone else wants it. And so as we look at our women's portfolio, we think we have a lot of right to win and be successful over time. It's not just with Billie, which has historically been DTC-led, we think it's with the full portfolio and looking at a portfolio across what each brand stands for with a very unique and differentiated consumer target where we can play against the whole population.

And that 20% figure, that's 20% of systems?

Women's Systems at Walmart, which is the only place it is.

And by the way, just -- sorry, just staying on Billie for 1 second. It is hitting on all of the attributes that you would expect in year 1, right? It's adding 400 basis points of growth to the Edgewell business. It is bringing new and interesting news to the shelf at retail. We are now the disruptor on shelf, where we have been disrupted, and it is bringing incredible talent and capability profile to the organization. And I think if the Billie team were here today, they would tell you they're spending as much time on our portfolio as they are on the Billie brand. Having said all of that, the most exciting thing about it is what we think the future holds for the brand because the level of brand consumer equity and engagement with consumer and trust in the brand. This is a brand that travels. So while we're only talking about it as a shave brand today, we will be talking about it as a women's lifestyle brand tomorrow. And as we bring this now further into retail, you'll start to see that diversification. So great growth profile, tremendous talent and capabilities into the Edgewell organization and a brand now that travels across categories.

And Jason, if I build on that, it's a $100 million DTC brand right on trailing 12 when we acquired it. Jack Black is another brand we have that is 60% transacted online. We now have 12% of our company sales that we sell through e-commerce. That's 3x where we were 2.5 years ago. And so there's a capability element here through some of the acquisitions, particularly with the Billie team, that is super beneficial back across the balance of the Edgewell portfolio. So there's an intentionality here around being more digitally native as a company, but we're making a lot of progress, and Billie was a big part of that as well.

Now just to put that 20% in context, how does that compare to what you saw from Flamingo or Joy when they launched?

I don't have Flamingo top line. Joy maxed out at 17%.

And that was max, and here we are just at very early days, and early days we've already surpassed that.

That's right.

Flamingo was less than 10% at Target, so when it went.

Wow, okay. So this is -- the early read is this is having much more success than either one of those did.

Correct.

But I think we've always looked at those and said, if you repeat that, what does it look like? So it could even be more. And there's a cost savings side, too, right? Because right now, you're selling them blades, but the assembly and the rest of it is happening somewhere else. I imagine you can and will bring all that in-house because you got the capability.

Just happened.

It just happened?

Just happened, it's already done.

Excellent. How do I put that in my model?

It's not that much money, Jason. But we did move fast on that one, yes.

Okay. Well, you mentioned Jack Black, and you highlighted earlier Men's Grooming as one of your advantaged areas for growth. I think last quarter, it didn't hit your 10%, your double-digit growth threshold, which is a little surprising because it's still sort of young. And I think if anything, like I'm going to grow well above it now and over time, growth is going to moderate. And I believe it only hit 6% growth, which 6% is not bad, but just relative to the expectations you might [indiscernible], what happened there?

I think it was more about the quarter and timing. We're confident that it will grow double digits on the year. Our plan was for it to grow double digits for the year, and we're ahead of plan. And so I think it's just more about timing of what was in the base there in terms of what we were cycling around pipes and innovation. But we're very confident within that. There's great innovation. We launched a new skincare line under Jack Black called FIELDTRIP, which is hitting the market right now. And we just launched a Cremo razor at a premium price point. It's an amazing razor. It's our best hydro technology into a Cremo styled and designed razor format to build out a new leg of that portfolio. So there's a lot of portfolio growth across all 3 brands to expand.

We're almost out of time. I want to make sure -- audience, any questions? Okay. Then let's close on Sun Care, which is coming off of 3 years of...

Share gains.

Of share gains, yes. You got this momentum, like Sun Bum put a little dent in early on. I mean with some other stuff, but since then, you bounced back and had a pretty good rally. Some people, the skeptics will look and say, well, yes, it's just J&J's recall, like they pulled out of market, that's a transitory bump and goodness, it's just something you're going to have to cycle as we get into next year. So clearly, like this business is going to be set back on its heels. You don't think that's the case. And you can give us lots of reasons. Give the audience some reasons of why that's not going to be the case.

Yes. We do not, and I'm conscious of time here. So just a couple of things. It's back to the boring stuff, but we have a very strong formulation regulatory capability and a very strong procurement capability to get materials we need, get them through regulatory QA checks to the shelf. We have in-house manufacturing of aerosols. We're the only manufacturer that does. We have a direct store delivery team that's been in the business for 25 years. They're very, very good at what they do in high-volume markets. We have a great innovation pipeline, not only this year, but to come that we've shown retailers. The consumer is responding. The retailers are responding. We're growing distribution across the board. If not more space, higher quality space. We have new distribution and 2 club customers that didn't exist a year ago. And so once you get that going, you end up growing 3 share points in a season, which is what we're doing now. And we lapped the NEUTROGENA recall starting in July, it was right after July 4 weekend, and we're confident in the season to come and that we're going to hit and probably -- we feel like we'll keep the momentum going here domestically in the U.S. And the good news for us is outside the U.S., internationally, there's tailwinds to come in the market as part of the reopening. It's lagging what we're seeing here in the U.S. So this is a multiyear play as you look globally in terms of what we think we can do in Sun Care.

I like it. That's a great note to end it on. And the clock just went to 0 and the red light is blinking. So that's our queue to wrap it up. Thank you so much. I really appreciate you guys coming to spend the time with us all.

Thank you.

Thank you.