Good morning, ladies and gentlemen. Welcome to the Church & Dwight third quarter 2022 earnings conference call. Before we begin, I've been asked to remind you that on today's call, the company's management may make forward-looking statements regarding, among other things, the company's financial objectives and forecast. These statements are subject to risks and uncertainties and other factors that are described in detail in the company's SEC filings. I would now like to introduce your host for today's call, Mr. Matt Farrell, Chief Executive Officer of Church & Dwight. Please go ahead, sir. Okay, thank you, operator. Good morning, everyone. Thanks for joining us today. Now we've got lots to talk about. I'm gonna begin with a review of Q3 results, then I'll turn the call over to Rick Dierker, our CFO, and when Rick's done, we'll open the call for questions. First off, I'll say we revised our full-year revenue outlook in early September, and we're tracking to hit 3%, which was the midpoint of our 2%-4% range at that time. In Q3, reported revenue was up 0.4%, and that exceeded our expectation of -1%. As you read in the release, while the majority of our brands are performing well, we have three businesses that are coloring our results this year, and those are Waterpik, our vitamin business, and Flawless. Those businesses accounted for a 6% sales headwind in Q3. Adjusted EPS was $0.76. Now this was $0.11 higher than our EPS outlook, driven by higher international sales, lower SG&A, and timing of marketing spend. The U.S. portfolio grew consumption in 11 of 17 categories. The trade down to value laundry detergent continued as Arm & Hammer liquid detergent achieved an all-time high market share of 14.3%. Arm & Hammer clumping litter, Batiste dry shampoo, and TheraBreath mouthwash also achieved all-time high market shares. Trojan condoms returned to share growth, and OxiClean stain fighters and Arm & Hammer baking soda delivered double-digit consumption growth. The strong performance of these businesses is offsetting the impact of the discretionary businesses and vitamins on reported sales. In Q3, our most discretionary brands, Waterpik and Flawless, which account for approximately 10% of our global sales, were impacted by lower consumer spending. Similarly, the gummy vitamin category, in which our VitaFusion brand competes, was impacted by a decline in consumption as fewer households purchased vitamins and supplements, and we were also lapping the COVID Delta variant in the prior year quarter. In Q3, online sales as a percentage of total sales was 15%, and we continue to expect online sales for the full year to be above 15%. Now I'm gonna comment on each business. First up is the US consumer, which had 1.7% organic sales decline. Looking at market share, seven of our 14 power brands held or gained share. Looking ahead, we expect even further improvement in our market share positions in Q4 as we expect our highest fill rates of the year and our highest quarterly promotional and marketing spend. Now I wanna look at a few of the important categories in the U.S., and I wanna start with laundry. The trade down to value detergent, which began in Q2, continued in Q3. During Q3, the liquid laundry category grew 3.1%. Now if we break that down, value laundry detergent grew 9%, while premium laundry declined 3%. Arm & Hammer unit dose also benefited from the trade down. Our Arm & Hammer pods grew consumption by 25% in the quarter compared to unit dose category growth of 4.5%. With more consumers migrating to Arm & Hammer, the long-term benefit to the Arm & Hammer brand similar to the last recession. In litter, the category grew 11%, while Arm & Hammer litter grew 14%, so we gained share in the quarter. Both our black box, which is premium, and our yellow box, which is value, had double-digit consumption growth in Q3. In stain fighters, OxiClean gained share as consumption was up 10%, while the category grew 7%. The dry shampoo category was up 18% in Q3, driven by Batiste consumption, which was up 37%, and we now enjoy a 46% market share in dry shampoo. The condom category was up 3.5% in Q3, while Trojan consumption was up 4.5%, so again, we gained 60 basis points of market share thanks to our new Trojan BareSkin Raw condom and the success of more targeted marketing. Our most recent acquisitions are performing well. TheraBreath, which we acquired in December of 2021, had a great quarter, with 46% consumption growth. TheraBreath grew share 4.3 points to 17.8% of the alcohol-free mouthwash category. TheraBreath is the number two non-alcohol mouthwash and the clear number four brand in total mouthwash. TheraBreath is expected to be a long-term grower for Church & Dwight in the future. Zicam also delivered strong results this quarter. You may recall we acquired Zicam in December of 2020. Zicam is the number one brand in the cold shortening segment with a 76% share in Q3. Now looking ahead to Q4, the regular flu season in the US is projected to be far more severe than recent years. As a reminder, approximately 40% of Zicam consumption happens in Q4. We closed on our latest acquisition, Hero, in mid-October. Now while we did not own Hero in Q3, the brand performed extremely well, growing consumption 56% and gaining 3.6 share points to achieve a 14% market share in the total acne treatments category. There's a great deal of excitement here about this business as we look ahead to 2023 and longer term. All right, next up is international. Our international business delivered organic growth of 3.2% in Q3, primarily driven by the international subsidiaries, which posted strong growth in the quarter. On the other hand, our global markets group has been impacted by weakening demand in China due to lockdowns, and we expect this to continue in Q4. Finally, specialty products. Our specialty products business delivered 1% organic growth in the quarter, but keep in mind that the 1% organic growth is on top of 18.5% organic growth in Q3 2021. Now, I wanna spend a couple of minutes discussing our two discretionary brands, Waterpik and Flawless, which have longer purchase cycles, and after that, I'll talk about the vitamin business. First, Waterpik. So Waterpik is the number one brand in water flossers. We continue to see lower dollar consumption for water flossers in the US. However, Waterpik unit volumes are actually positive, both in Q3 and year-to-date, as consumers trade down to lower-priced cordless models. If we look back at 2021 and 2020, the consumer was healthier and a good portion of our growth came from our super premium products like Sonic-Fusion. In 2022, the decline in our flosser sales is driven by trade-down and inventory reductions by retailers. Shipments for full year 2022 are expected to decline approximately 20% as retailers reset their inventories and product mix. We continue to invest in demand-driving activities for Waterpik, such as lunch and learns with dentists and hygienists to drive household penetration of flossers. In 2023, the next year, we expect to return to pre-pandemic levels for lunch and learns. Now, remember, Waterpik is the Kleenex of water flossers, and nine out of 10 dentists recommend the product by its brand name. This is extremely important, as 60% of consumer purchases are driven by a recommendation from a dental professional. It's fair to say that gum health is not going away, and still only 16% of the U.S. population flosses every day. Now looking back, Waterpik averaged high single-digit top-line growth from 2017 when we acquired the business through 2021. We're taking a big step back in 2022, but we're confident that the long-term growth prospects for Waterpik are sound. Now, the other discretionary brand we have is Flawless, which is the number one brand in women's health hair removal. We're experiencing lower consumption in this category, which resulted in higher inventories at retail. Our share has been further hurt by the delay in launching new products caused by the China lockdowns at our supplier. After the conclusion of a 30-month earnout period, which ended in 2021, our marketing team took over the front end of the business and has been narrowing the product assortment to the winners. If you're familiar with the brand, that's Face, Brow, Mani, and Pedi. We're also shifting the focus from older consumers to digital targeting of younger consumers in the beauty space. Now, we believe these changes will have a positive impact on the long-term prospects for the business. Now, finally, over in VMS, we have the number one adult gummy vitamin. Category consumption is being impacted as temporary consumers who were interested in prevention during COVID times have exited the category. Beyond category dynamics, the VitaFusion brand has also lost some share due to our lower fill rates, particularly earlier in the year. It's clear that fewer households are purchasing vitamins and supplements post-COVID, and the category is being impacted by the recession. Here are some stats. For the last three quarters, the category growth rate has been +10% in Q1, +5% in Q2, and most recently, -8% in Q3. Now, the -8% compares to a +33% increase in the category in Q3 2021. There is some good news here. In the first few weeks of October, the rate of category decline has moderated to -4%. Now longer term, the transition from pills and capsules to gummy vitamins gives us confidence in the long-term appeal of the gummy category. I'll conclude with a few takeaways that I'd like to leave you with. The majority of our business is strong. We believe the three brands that are coloring our numbers have good long-term prospects. Case fill is now over 90% and improving. We've ramped up our marketing and trade promotion investment in the second half, especially in Q4, and we have confidence in our Q4 outlook. Now I'm gonna turn it over to Rick to give you more details on Q3. Thank you, Matt, and good morning, everybody. We'll start with EPS. Third quarter EPS was $0.76, down 5% to prior year. The $0.76 was better than our $0.65 outlook, primarily due to higher sales, lower SG&A expense, and timing of marketing spend. Reported revenue was up 0.4%, including a 1% drag from currency. Revenue was higher than our outlook of -1%. Organic sales declined 0.7% as volume was down 8.5%, partially offset by positive pricing of 7.8%. Matt reviewed the top line for the segments, so I will go right to gross margin for the company. Our third quarter gross margin was 41.7%, a 250 basis point decrease from a year ago. Let me walk you through the Q3 bridge. Gross margin was impacted by 580 basis points of higher manufacturing costs, primarily related to commodity inflation, distribution, and labor. These costs were offset by a positive 190 basis point impact, largely from pricing, positive 20 basis points from acquisitions, and a positive 120 basis points from productivity. Moving to marketing. Marketing was down $20 million year-over-year, although this was a significant increase of $40 million sequentially from our first half 2022 levels of 8% of sales as our fill rates have improved. Fill rates in Q3 were 91%, and we expect further improvement in Q4. Marketing expense as a percentage of net sales was 10.7% in the quarter. We expect a continued increase in marketing spend in Q4 to approximately 13% of net sales. For SG&A, Q3 adjusted SG&A decreased 30 basis points year-over-year. Other expense all-in was $19.4 million, a $7.3 million increase resulting from higher average outstanding debt levels and higher interest rates. For income tax, our effective rate for the quarter was 20.2% compared to 20.4% a year ago. Now to cash. For the first nine months of 2022, cash from operating activities decreased from $534 million to $119.5 million, due primarily to higher inventory levels from Waterpik, Flawless and VitaFusion. We expect inventory levels to come down over the next twelve months. As of September 30th, cash on hand was $438 million. Looking ahead to Q4, we expect reported sales growth of approximately 2%, organic sales decline of approximately 1% and gross margin contraction. Adjusted EPS is expected to be $0.58-$0.62 per share, a 3%-9% decrease from last year's adjusted Q4 EPS. This decline is primarily due to significantly higher quarterly tax rate of 25% versus an unusually low tax rate in the prior year of 3.7%, which was largely due to high number of stock option exercises a year ago. Turning to the full year, we expect the full year outlook for reported sales growth to be approximately 3%, the midpoint of our previously 2%-4% range. We expect organic sales growth to be approximately 1%. The strong consumption across most of our businesses in 2022 has offset the slowdown in discretionary brands, as Matt talked about. We now expect full year adjusted EPS to be $2.93-$2.97, a decline of 2%-3% compared to 2021. The range is influenced by the extent of margin mix within the portfolio. We continue to expect the full year tax rate to be 23%, and we now expect cash from operations for the full year to be approximately $800 million. Our full year CapEx plan is now approximately $170 million as we continue to expand manufacturing capacity in anticipation of future growth in laundry and litter. In closing, we continue to perform in a volatile environment. We expect further market share gains in Q4 as we invest in our brands and our supply chain fill levels continue to improve. With that, Matt and I would be happy to take any questions. Thank you. Ladies and gentlemen, if you'd like to ask a question, please press star one one on your touchtone telephone. Again, if you'd like to ask a question, please press star one one. One moment, please. Our first question comes from the line of Dara Mohsenian of Morgan Stanley. Your line is open. Hey, guys. Hey, good morning. First, just a detail question. Can you just be a bit more explicit on what changed in the earnings guidance for this year post the early September update? I know there's year-over-year tax rate pressure in Q4, but I think that was known. Just curious on what's changed. Second, just on the vitamin side, you guys have articulated that the business is suffering from tough comps versus COVID variants last year. That makes sense. As you think about the business longer term, some of the people that were brought in during COVID, who maybe aren't as loyal to the category, is there sort of risk that this weakness lingers and, you know, perhaps they're more susceptible to pullback in consumer spending and won't be as loyal to the category from these sort of on-the-fence users who were brought in during COVID? Just any thoughts on vitamins as you look out more to next year? Thanks. Yeah. Hey Dara, it's Rick. I'll take the margin mix, and Matt will take the vitamin discussion. Really, the change in the outlook is pretty straightforward. It is. We didn't change the revenue outlook. We're still the midpoint, the 3% number. The mix to get there has been a little bit different, though. The businesses like Flawless and Waterpik and Vitamins have come down and the rest of the household portfolio has gone up. That's created a mix pressure. Matt also talked about how there's a trade down for Waterpik going from the higher priced units to the lower priced units. That's also caused a mix issue on a profit basis, and that's impacted earnings. Yeah. With respect to vitamins, you heard my opening remarks. We've lost some share due to fill rates. We lost some consumers to other brands earlier in the year, so we gotta win them back. There's definitely fewer households purchasing. Your question is, Steve, can we call the bottom and do we know that all the consumers who are leaving the category have left? Well, obviously not knowable. I will say that the coming flu season actually should bolster the VMS category and just beyond COVID, because we haven't had a wicked flu season for a few years. Given it's been many quarters now, you know, several quarters since the end of COVID, we do think things are starting to bottom out. As I mentioned, since we saw that in the fourth quarter, at least early in the fourth quarter, the decline year-over-year is reduced to 4%, where it was 8% in the previous quarter. It's, you know, it's possible that we could be hitting an inflection point where the category may flatten out and then start to grow. Great. Thanks. Thanks, Steve. Thanks, Dara. Thank you. Our next question comes from the line of Chris Carey of Wells Fargo. Mr. Carey, your line is open. Hey, good morning, everyone. Chris. I'm trying to determine how much of Waterpik, Flawless, vitamin pressure impacted your consumer domestic versus your international segment. You know, you've previously given some perspective on geographic mix of these businesses. I wonder if you can update us on the U.S. versus non-U.S. exposure today or how things look today for those businesses. Then, you know, just connected to that, do you have a sense of what your organic sales growth, you know, would have been in your consumer, domestic, and international businesses, assuming that these three businesses were neutral growth? Obviously, you gave the 6% headwind, which is quite helpful. I'm wondering how that broke out between your reporting regions. Yeah. I'll just comment that as you know, Waterpik is a global business, so it affects both international and U.S., U.S. being the lion's share of the business. U.S. is even more skewed towards the U.S. Flawless is even more skewed towards the U.S. If I don't have those numbers for you, but I think it's fair to say that 6% is probably somewhat equally split for Waterpik as far as U.S. versus international and more skewed towards the U.S. for Flawless. Yeah, I would only add to that, right, we tried to give you a little bit more visibility and granularity into it. If we were flat for the quarter on net sales, we said, you know, those three businesses were about a 6% headwind. As Matt said, you know, our divisions are usually 80/20 split, but Waterpik is probably more 50/50. I don't think we'll get any more granularity, but we had a 6% headwind in the quarter. Yeah. Chris, the reason we called that out in the release on the call this morning is because we wanna put a ring fence around where our problems are. We got 80% of the business that's really clicking. You know, we have three businesses that we like them on a long-term basis, but certainly hurt us in an environment where you have weakening consumer or weakening economy. That's really helpful. If I could just follow up quickly and then get back in the queue. Just as it pertains to when the headwinds came together for these businesses and as such, when you could potentially start lapping those headwinds, is it reasonable to just look at your personal care business and when the growth started to come off? Then you know, can you just confirm whether you're seeing any sequential worsening or you expect stabilization? This is really just about, you know, getting beyond tough comps. Thanks so much. Yeah, I'm sure a lot of people have questions about 2023. What we can say about that 10% of the business, Waterpik and Flawless, is that in the next couple of quarters, we do expect to be choppy. Meaning, Q1 and Q2 of next year. Just looking at year-over-year comps, et cetera. We think, you know, after that things are gonna even out. On the vitamin side, we think that, as Matt said in his prepared remarks, that we're starting to see the -8% to -4% just because of the Delta variant year-over-year, and we're seeing that start to inflect in a good pattern. That's about the color we'd give you. Okay, thank you very much. Thank you. Our next question comes from the line of Kaumil Gajrawala of Credit Suisse. Your line is open. Hey, guys. Good morning. Can you maybe talk a little bit about you alluded to some of this, but how are you balancing between how much to advertise versus how much CapEx to put in on the vitamin side versus this uncertainty of demand? Because it sounds like there's a fill rate problem, but there's a demand problem, and there's incremental CapEx and advertising going into it. How are you managing these pieces? I'll start with CapEx and then maybe Matt can end up on the consumer. I'll talk about demand a little bit too. On CapEx, for example, we had said for 2023 we're gonna have about $300 million of CapEx, a step up, and that was laundry, litter and vitamins to recall. We put a pause on the vitamin CapEx, and that new number for 2023 will be probably between $250 million and $270 million. We'll finalize that when we give our full 2023 outlook. That's on the CapEx side. Yeah. You had a question about marketing. If you look back over the last few quarters, just kind of round numbers, Q1 and Q2, we had 8% marketing as a percentage of sales. Why? Because we had lower fill rates, so we said it was prudent not to be spending at a higher rate. Now, that amped up in Q3, where it's 10.7%, and you see we're calling 13% in Q4. Then I'd say next year. On a full year basis this year, we're probably around 10%. But we do expect next year to build on that, so that'll move to a higher number. As fill rates become more normal, the marketing spend will also return to a normal rate. On vitamins, I would just add, I think it's really key to understand when we're talking about the category, right? Yeah, the category was down 8% in 2022, but it was up 33% in 2021, and that's what Matt had in his comments. On a stack basis, it's up 25%, so it's not like the category is cratering. I think it's just coming back in line with a super, you know, super high growth relative to pre-COVID levels. Yeah. In fact, if you look at the stack rate for Q2, it'd be similar to Q3. Okay, great. On laundry, was any of the strength linked to, you know, your ability to supply versus the competition? We've obviously heard of some shortages at some of your competitors. I'm just wondering, is it indeed trading down or is it perhaps y ou have better supply at the moment than some others. No, I don't think supply would be a very big factor here. You know, I think this is entirely driven by the economy and the consumer. You know, we've seen this before, you know, many years ago during the Great Recession. You know, we're seeing it in liquid laundry detergent. We're seeing it in pods. One we didn't talk about is scent boosters, where, you know, scent boosters, the category was flat, but we were up 3% or 4%. Everywhere where we have a value, and I'm sure your comment about supply does not extend to all liquid laundry, pods, scent booster, every aspect of laundry. We're seeing it in so many subcategories within laundry. We conclude it's real and it will continue. Great. Thank you. Thank you. One moment please. Our next question comes from the line of Stephen Powers of Deutsche Bank. Your line is open. Stephen Powers of Deutsche Bank, your line is open. Oh, sorry. Sorry, I didn't hear you call my name. Hey, guys, thanks. I guess there's, as I listened to you, in the third quarter, you had both, like, demand degradation for sure in Flawless and Waterpik, and vitamins as well as, you know, continued supply constraints across the business, and then retailer restocking kind of impacting the total portfolio. As we think about going forward, when are you able to, when do you see yourself shipping to consumption, whether in the core consumable business or in the businesses that have been the biggest drag? Well, that answer is a little bit more complicated, but our fill rates in Q3 were 91%. We expect in Q4 they're gonna be closer to 93%-94%. Remember, historical fill numbers were 98%. So we're within spitting distance of that. There's a few key areas, but largely raw materials that are still holding us back in a couple of key categories. In some cases, it's capacity for international that's being addressed as well. So I think, as we exit this year, in most categories, we'll be shipping to consumption. Yeah. As far as inventory in the channel, Steve, that's more of the focus here, more on Waterpik and Flawless. That's why we think for the next, let's say six to eight months, I think it's gonna be choppier for those two brands. We don't have worries about ship to consumption with respect to the rest of the business. Okay. You talked about marketing into next year. Could you give us an update on whether or not you've layered on any, you know, coverage on the cost side of things into 2023 at this point? And if so, how much? I guess, just in broad brush strokes, do you want us walking away from this call, you know, thinking that Evergreen is on the table for next year, or is that too ambitious? Hey, hey. You know, we have a range for Q4. You're asking us for commentary on 2023. There are pluses and minuses that when you think about 2023. You know, the majority of our business is doing well. You know, certainly there's inflation next year, but you know, early days with respect to RFPs for procurement and input and things like that. We're seeing some things come back, but we won't know really for the next 90 days where all those RFPs turn out. As I said, you know, we're gonna have a few choppy quarters from Waterpik and Flawless. Laundry is super strong right now. Value is winning. We, you know, obviously we expect that continue for the next 12 months. You know, going the other way, everybody's dealing with higher interest rates and FX, so that's a drag. Then obviously, if we're gonna reinflate our marketing spend in 2023. There may be a couple other pluses or minuses. Rick, anything else you wanna throw in there? Yeah, I would just say, as Matt said, higher marketing because we're gonna have higher fill rates, so that kinda normalizes incentive comp. We're gonna have a gross margin tailwind, though, is what we expect. Lots of puts and takes. We're not ready to call 2023 yet. We'll do that in three more months. I would just say we are having some glimmers of hope on the RFPs on some of the commodities are starting to inflect. But again, we're not gonna get into that detail. Yeah, it's just way too early to call it, Steve. Yeah. Okay. No. Rick, has there been any forward buying and coverage as it relates to commodities for next year, or are you still in a floating position? That's a good question. Usually, and just for context, right, we are usually about 60%-70% hedged by now. I said last call we were approximately 0% hedged. I would tell you today we're about 25%. We did do some diesel before the run-up as an example. But mostly we're still, you know, not back to historical levels on the hedging because we believe those costs will continue to come down. Yeah. All those factors, Steve, they're all material one way or the other. The question is, you know, how big are each of them once we get to the end of January when we call 2023. Understood. All right. Thanks. Thanks a lot. Thank you. One moment please. Our next question comes from Nik Modi of RBC. Your line is open. Yeah, thank you. Good morning, everyone. Hello, Nik. Hello, Matt. Just a couple of brand category level questions. Just on laundry, you know, looking at some of the Numerator data, it looks like household penetration is down, and I was just curious on your thoughts around that, what you think is happening there. XTRA in this kind of environment would typically do better than what I'm seeing, at least in the scan data. I just was hoping you could just comment on that. I had a question on Flawless. Yeah. Well, as far as households losing households, that's not something that's been a topic for discussion here, as far as people, less people, you know, doing wash loads. I can't go any further on that. As far as XTRA goes, yeah, you know, we've been prioritizing Arm & Hammer over XTRA for the past you know 18-24 months just 'cause of fill rate issues. That's behind us now. But we are expecting that in 2023, XTRA could clearly be a winner, as that's our deep value detergent. We did see the same phenomenon back in during the Great Recession. I think that's ahead of us. You said you had another one too, Nik, on Flawless? Yeah, on Flawless. Just, you know, this kind of youthanizing the brand, you know, from the older consumer to the younger consumer. I'm curious, you know, 20 years of covering this space, when any time a company does that, there tends to be a lot of disruption from alienating the older consumer base, right, as you try to make the brand younger. I'm just curious if you guys have looked into that or worried about that, have seen that, and could that kind of prolong the recovery of that brand? No, I would say that because the size of the prize is so great with the younger consumers, that we don't think that shift is going to be so dramatic and so noticeable that it's gonna alienate the older consumer. So I would say no, that's not a worry. Okay, great. Just one more question, Matt, sorry. You know, Colgate-Palmolive earlier today talked about some inventory destocking in some of their categories at brick-and-mortar retail. I'm just curious, and you know, their fill rates obviously have been recovering. I'm just curious if you've seen any of that happening in the categories you guys operate in. Yeah. Hey, Nik, it's Rick. I'll take it. You know, early in the quarter, we talked about that. We gave updated guidance in September, and we said part of the reason was actually because of inventory destocking at retail, and it wasn't just one category, it was multiple categories. That was implicitly already in our minus one outlook. We saw that early in the quarter, but after we got through that, we didn't really see it any further. Okay. It's basically over. Okay, that's what I was trying to get at. Excellent. Thank you, Rick. Thank you. Our next question comes from the line of Kevin Grundy of Jefferies. Your line is open. Hey. Hey, great. Hey, good morning, guys. Question for both of you on the promotional environments and just sort of your expectations there near term and then, you know, as we sort of look out to next year, with fill rates normalizing, gross margins still under quite a bit of pressure, a lot of commodity inflation in the P&L, that should start to subside. We're seeing some of that, and pricing is starting to catch up. Then, of course, I'm asking about the promotional environment and trade support within the context of some of the earlier discussion around trade down in laundry. There seems to be some difference in opinion, I guess, between, you know, some of your commentary and one of your key competitors as to what's driving the share loss. That's all kind of a big wind up. What's your expectation for trade support? Are you anticipating seeing perhaps considerably more with Procter & Gamble in a better supply position? Yeah, I can't comment on a competitor, so you can appreciate that. But if I look at laundry detergent and cat litter, so on the household side of the house, and those are the most promotional areas. The category sold on deal for liquid laundry was 32% in Q3. And you know, we were at 26%. And obviously we have competitors that are higher than that. But that 32% was actually down, you know, year-over-year. Yeah, I still think the category spend, the promotional environment is still lower than it has been historically. Then it's probably worthwhile talking about litter as well. The sold on deal in litter was 10% in Q3, and that's also historically low as well. We were at 13% in Q3, but the 10% and the 13% are still lower than historical levels, which are typically in the high teens level. You know, it's all ahead of us right now, but I wouldn't say that the environment has been super promotional in Q3. Now that could change in Q4 and Q1. Got it. Thanks, Matt. Quick follow-up just on M&A. Any thoughts? I know the balance sheet is in a good shape. You guys can transact. Maybe just comment on the pipeline. Then in general, just with some of the volatility, and albeit the large majority of the portfolio is performing well, but some of it's not. Given, you know, that volatility and some of the focus that it takes from management and the fact that you're integrating Hero, does it give you any pause to potentially transact on something else, even if the balance sheet is in a good place to consummate a deal? So your thoughts there would be helpful, and then I'll pass it on. Yeah. Well, it's important to remember when we acquire businesses. Take, go back to TheraBreath, for example, you know, we didn't take a whole lot of employees from TheraBreath, and we already have an oral care business, right? Oral care business handles toothbrushes, toothpaste, it's Orajel. You know, it's we're already in the category dealing with the same buyers. That's that was really a tuck-in. Then when you think about Hero, keep in mind for Hero, we're hanging on to the three founders are sticking with us for the next few years, and we wanna retain all the employees. We got an intact, high-performing team to run that business. We don't feel like we're in a position where we can't look at another business. As you said, the balance sheet is pretty strong. As far as the pipeline goes, you know, we are always looking at new deals and have even looked at one since the Hero deal closed. That's not to say we're gonna transact, but we're always looking for strong brands in good categories. Kevin, you know, it's always a measure of how much complexity the organization can handle at one time, and that has to do with when and how much we're integrating. The TheraBreath deal, as Matt said, was an easy tuck-in. We're fully integrated from a systems perspective already. Hero, we're gonna integrate from a systems perspective by middle of the year. That's a pretty quick process. Okay. Fair enough. Thank you both, guys. Good luck. Okay. Thanks, Kevin. Thank you. Our next question comes from the line of Rupesh Parikh of Oppenheimer & Company. Your line is open. Good morning. Thanks for taking my questions. On the inventory front, inventories are up 22%. Do you guys see any risk of obsolescence or markdowns with the higher inventory levels? Yeah. Hey, Rupesh. It's Rick. Yeah, it's a fair question. I'd say two things. One, we expect inventories to get back in line over the next 12 months, is what I said in my prepared remarks, right? We've adjusted production levels for some of those long lead devices we sourced out of China, as an example, like Waterpik and Flawless. It just takes, you know, months to run through that inventory as consumption slowed a bit. We have taken some inventory reserves both in Q2 and Q3, whenever we have long-dated product like that. We feel like we've already recognized some of that. Okay, great. Rick, on the gross margin, I know you guys called out the mix shift that's a new headwind in Q4, but maybe if you can just walk through some of the puts and takes as you look out for the balance of the year. Yeah, I mean, I kinda went through the bridge a little bit in my prepared remarks. I would just probably keep it high level, and I would say, our previously in Q4, we had said that was the quarter that we expected to inflect positively, finally, for gross margin. We've defended all year long, now we're seeing contraction. I would just say that we think it's gonna contract slightly. I think it's gonna be much improved, you know, sequentially. I think we were down 250 in Q3. We're not gonna be down, in our opinion, not near that much in Q4. Tailwinds from that perspective, and that's partly because of comps on commodities. It's partly because, you know, Q4 itself in the prior years, a little bit lower baseline. I mean, those are a couple puts and takes. Great. Thank you. I'll pass it along. Thank you. Our next question comes from the line of Jason English of Goldman Sachs. Plot me in. Your line is. Appreciate it. Good morning, Jason. Morning. I guess I wanna come back to that question earlier about trying to unpack the impact of the three challenged businesses on the U.S. side of things. It looks like it's around an $80 million drag. If we assume 80% of that hit the U.S., which it sounds like that actually may be high given the Waterpik split. Either way, if we assume 80% of it, then it equates to about a 14% drag in your U.S. personal care business. The organic sales are over there look like they're down around 16%. Even stripping it out, it looks like your organic sales would still be declining in personal care despite the robust growth you're talking about with Batiste and despite the recovering growth you're talking about with Trojan. Can you unpack that a little bit more for us and help us understand underneath the hood of that personal care business, what else is weighing on performance right now? Yeah. We haven't done the math. I mean, you took a swing at it back of the envelope, but we're not prepared to tell you, okay, for international and for the U.S. business, here, we're gonna recast what we put in the release by division. Yeah, I would just add to that. You know, remember, our order fill is 91% for the quarter, right? That's a tale of two cities. It's probably like 94% for household. It's in the mid-80s for personal care. You're right. The bulk of the decline in personal care are those three businesses. It's Flawless, Waterpik, and vitamins. We still have four or five key issues on personal care that we're trying to solve. We're not gonna go through all that detail, but I'll give you an example, right? Batiste is growing like crazy. It's doing fantastic. We can't meet all the demand. Consumption's up dramatically, and there's can shortages out there, right? You hear that in the beer industry as an example. Aluminum cans. We're trying to add that as quickly as possible to meet that unbelievable demand. Another example would be, you know, VMS, not just because the category is down, but, you know, our fill level down is lower than we would like because of one key ingredient on one specific SKU. There is some personal care pressure 'cause of fill rates that we expect to largely be behind us as we exit Q4. Okay. You mentioned the reload of some investment as you go into next year and a normalization or a return to more normal marketing. What does more normal marketing mean? And also, incentive comp, is that, I imagine it is a headwind as we go into next year. Can you give us any context around how incentive comp this year is tracking versus a more normalized level? Yeah, I would say incentive comp is gonna be a headwind next year. We're tracking anywhere between a 30% payout, as an example, is probably the best ballpark I'd give you. That will be a headwind next year as we get back up to 1.0 payout would be our expectations. Your first question was on. Remind me, Jason. Marketing. Matt mentioned that you would expect to return to more normal marketing. My question was, what does that mean? Yeah. I think we'll go through that in February, and we'll be very clear on what it is and what it means. I think you should expect that it's a stair step over time back to what we think has been our you know, sweet spot in marketing from a historical perspective. Got it. Understood. Thanks, guys. Thank you. One moment please for our next question. Our next question comes from the line of Andrea Teixeira of J.P. Morgan. Your line is open. Thank you, operator. Good morning, everyone. My question is on VMS. Again, I understand this segment, and correct me if I'm wrong, it represents about 10% of sales. On top of the Waterpik and Flawless issues that you discussed, it seems that the issue has been consumption. I obviously understand you're comping a very high comparison from last year. How much of the VMS business is down in the quarter and year to date? With that, are you worried about if retailers, if there is excess inventory? I know it's a fast-moving item, but I was just wondering if that can be or if that's embedded in your guidance in the fourth quarter, that there could be some issues with de-stocking there as well, except of course that SKU that is not being served. Thank you. Yeah. Thanks, Andrea. I think, you know, there's two core issues with the vitamin, you know, portfolio. One is the category. That is the overarching and greatest issue. We quoted a little earlier, but you know, 2021 Q3 was 33% growth, and we're coming off that extreme high. It's coming off a little bit more than we thought, but that's what's been happening these last 13 weeks or so, and we expect that to kinda continue, but inflect a little bit better as we move forward, right? That's the biggest one. The second one is fill levels, and Matt kind of went through that a little bit as well. We expect that, as we exit the year, our fill levels for vitamins will improve, so that'll help our share. Those are the two biggest things. I probably wouldn't give you much more detail than that in terms of how big. We tried to give you a little bit more granularity this time that, hey, 10% of the business is this discretionary portfolio, Flawless and Waterpik, and then another 10% is this vitamin number. I think the key take home comment though is really two parts of it, and it's predominantly more the category than a fill level issue. No, that's fair. The 80% of the remaining business is probably growing like a mid-single. Yeah. If you do the math, 80% of the rest of the business is growing 4.5%, which is Mm-hmm. Which is fantastic. Okay, that's helpful. Thank you so much. I'll pass it on. Thank you. Our next question comes from the line of Anna Lizzul of Bank of America. Your line is open. Hi. Good morning, and thanks so much for the question. I just wanted to follow up a little bit on the topic of promotions. We've been hearing from some of your peers that, you know, promotions are essentially not really going to return to the same depth as they were pre-COVID. Just wondering if you're comfortable here with your frequency and depth of promotions where you are now versus pre-COVID. Thanks. Yeah. I mean, where we are right now, we're winning. If you some of the numbers I quoted, you know, the category in liquid laundry is 32%. We're at 26%. We're gaining share. You're right. It would appear that there's no need for a heat up, but I can't predict what competitors will do in the next six months. Okay. Thank you. Thank you. Our next question comes from the line of Olivia Tong of Raymond James. Your line is open. Great. Thanks. My question is on pricing and promotion. You obviously saw a 1-point sequential acceleration in price mixing Q3, but obviously some pressures on the higher price portion of your portfolio, while pricing on the everyday consumable. Can you give a little bit of a color on what impact mix had versus price, and then perhaps a little bit on domestic household versus personal care? Thanks. Yeah. I don't have the domestic household versus personal care in front of me, but I can help you with the price volume mix, you know, kind of across time. You know, in Q1, we had 7.8% growth in price mix, and then we went to 6.2% in Q2, and we said that was largely 'cause of the Waterpik mix issue. From Q2 to Q3, we bumped back up to 7.8%. That new laundry and litter pricing that was really announced in Q2, we had a full quarter impact of that in Q3. So that was overweighing any other drag from Waterpik or whatnot. Yeah, that's kind of the sequence of events on some of the drivers of price mix. Got it. On vitamins, I'm curious your view on what you think vitamin consumption trends will be longer term. You know, obviously recognize that flu could be a factor near term, still variants of COVID here and there, but where do you think consumption ultimately ends? I mean, does it get back to where it was? Does it stay above pre-COVID levels, or does it end up getting back to where it was pre-COVID in your view? What are you planning for? Look, we were planning on expanding our capacity, right? We've gotta put a pause on that. We do think so long term, we're gonna need that capacity. The transition from pills and capsules to gummies is a pretty important factor. If you look at the percentage today, it's 27% of the total VMS category is gummies. You know, we expect that's gonna continue in the future. You know, a lot of people discovered the category as a result of COVID. Yeah, certainly some people have exited, but not all. Consequently, we think the future's still bright for the business, but we're gonna have a kind of a rough ride here, at least for the next couple of quarters. Thank you. Thank you. Our next question comes from the line of Lauren Lieberman of Barclays. Your line is open. Great. Thanks. Good morning. Hey, Lauren. Hey. Just a few questions. First thing is just gross margin progression. I know, Rick, you mentioned you know, it's likely a tailwind overall next year. But when I look at kinda this quarter, what's implied for 4Q, and that you've talked about the you know, continued headwind at least in the first half, you know, first half of the year, more or less from some of the more discretionary businesses, it feels like that gross margin progression is still like you know, you're probably not inflecting to up until we get toward the second half of 2023. I mean, is that fair, just again, given the mix dynamics that you've kinda called out on the discretionary side of the business? Yeah, I'm not ready to give quarterly or first half, second half guidance on 2023 yet. I would just say that, you know, we're kinda getting ahead of ourselves talking about 2023 at all. We were just trying to give broad brush strokes and I would tell you the answer as of right now, our visibility is gross margin expands next year. We'll get into all the details, all the bridges that you guys want to in February. Okay. I wanted to come back again on fill rates. It's a question I've just kind of grappled with a couple times already this year, really going back over the last 12 plus months. You know, fill rates have been improving, as you've said, and that's been an, you know, achievement. I understand categories where ability to supply, you'd of course, you know, it would make sense not push on the string in terms of marketing. You've also said out of stocks haven't been an issue. I just still don't really understand why improving fill rates is a true tailwind to the business as we move forward. I mean, not saying that you didn't have to fix it, and you did, but I just don't understand the tailwind to sales growth that should come from improving fill rates if out of stocks haven't been a problem. Yeah, I think it's. Matt, I'm sure, has some comments too, but overall fill rates, we think, being at 98% means that for 2023, means that we're gonna be able to match consumption all year long, that we're not gonna be able to have to turn down promotions in certain areas, 'cause that has happened this year. We've said, as much as we would like to, we can't. I'm not gonna go through the different examples of that, but that exists. That's kind of in the back of my mind what we're talking about too. Yeah, when we say out of stocks are a lot better and less of an issue, it's because we finally cracked you know the low 90s. We're still leaving money on the table. The out of stocks being at 90% is not something we're proud of. By the way, we still get hit with retailer fines because of our inability to sell. That's another drag that we have on our gross profit. We definitely do in certain categories have certain SKUs that are problems for us that are creating a drag on our organic sales, Lauren. Okay. Final thing was just the SG&A in the quarter was down a bunch, not terribly different than year ago, but just curious on the levels of SG&A spending, if there's like an incentive comp reset we should be thinking about, presumably that would come next year, but any color on the SG&A piece would be great too. Yeah, I think that's it. I kind of alluded to it last quarter that we expected SG&A favorability, and unfortunately it is because of incentive comp. When you have some of these recessionary pressures on discretionary items, it's dragging the whole company below some of the key metrics. I just answered Jason and said that our payout was tracking around 30%. That's a benefit in the quarter per se, and for the year, not the one that we would want. That will have to get you know refunded next year. Yeah. Okay. All right. All right. Yeah, if you recall, Lauren, we have four targets annually, right? Sales, gross margin, EPS, and cash. The last two we got a zero on. You know, that's what's affecting our incentive comp. As you well know, we know where our EPS is and our cash flow. Okay. Thanks so much. I appreciate it. Okay. Thank you. Our next question comes from the line of Bill Chappell of Truist. Your line is open. Thanks for squeezing me in. Hey, Bill. A couple just clarifications, I guess, on Jason and Lauren's question. I assume you accrued for variable comp in the first two quarters. Was there a reversal that gave a bigger benefit in the third quarter, or will it in the fourth quarter, or is that not the way you look at it normally? Yeah, you always have to accrue kind of on a year-to-date basis, and we were tracking more favorably in Q1 and Q2. Then, as some of these pressures, like on inventory, for example, on these discretionary categories impacted cash flow, we have to adjust the accrual, and you get like a sort of a catch up, year-to-date catch up in the Q3 accrual as an example. Yeah, that's true. Yeah, it's been coming down all year long though. Okay, there wasn't an outsize like benefit this quarter from the reversal of accrual. There was a benefit in Q2 and a benefit in Q3. A bigger benefit in Q3 as projections for incentive comp have come down. Got it. Second, just trying to couple the commentary on the vitamin business. I mean, I understand. I think you said it's starting to stabilize and it's really way up versus kind of 2019 levels, which I appreciate. But at the same point you said you would put a pause on the CapEx expansion. Maybe it was you're lowering your CapEx by $100 million, and maybe that's too aggressive. But just trying to understand, you know, how to put those two together. If you think we're just getting back to normal, why would you kind of tape down CapEx expansion that would probably add capacity two years from now? Yeah, no, it's a fair question. The nuance is when we were doing all of our capital planning and demand forecasting 12 months ago when we started that project, it was jumping off of a baseline of this new COVID behavior, assuming all this behavior stuck and all this incremental, you know, whatever, 50% increase, you know, from 2019 stuck and there was no decline. Now that we're seeing a decline from that behavior, not all of it going back, but a decline from that behavior, we're just readjusting our baseline and growing from there. When we do that, it doesn't mean like we're gonna not do the capacity project. It just means we need to, we can easily pause it for 12-18 months, and that's what we plan on doing. Yeah, you know, the other thing too, Bill, is, you know, during COVID times, we had to go outside and get a third-party supplier, so we have more flex in our ability to supply today. That gives us a little more flexibility with timing of the CapEx. Got it. Thank you. Okay. Thank you. Our next question comes from the line of Jonathan Feeney of Consumer Edge. Your line is open. Hey, thanks very much. I just wanted to follow up on the earlier question about M&A. Obviously, you know, congratulations on how you managed the balance sheet, particularly the, I think, 2.3% coupon last December. Marginal funding rates have changed a tremendous amount, as valuations have. How, maybe Rick or Matt, do you think about M&A differently right now? Like, have hurdle rates changed? How do we quantify that? Has it become on margin a better or worse environment for accretive M&A with those two valuations down and funding rates up? Thanks. Yeah, no, it's a great observation. You know, when you look at where the ten-year is right now and where it's going and just look at the change in commercial rates, it's more expensive to fund an acquisition. You know, we're focused on incremental cash earnings, and cash earnings is impacted by interest rates and interest expense. Yeah, that would make it a higher hurdle as far as at least how we look at deals from a cash earnings standpoint. Yeah, I would just add to that. I actually think it's a net positive though. Like, it doesn't matter if the interest rate's 2%, 4%, 6%. A good business that we wanna own and a brand that's gonna be around for 50 years typically is gonna generate a lot of cash earnings and most of the time accretion as well. For those people that are bidding against us, especially private equity, they could not handle a 6% or 7% interest rate. Right. Makes a lot of sense. Thank you. Okay. Thank you. Our next question comes from the line of, one moment please. Peter Grom of UBS, your line is open. Morning, guys. This is Bryan Adams on for Peter. Thanks for taking a quick question here. Hey, Bryan. Hey, guys. Sounds as though the updated guide doesn't assume things have gotten much worse incrementally in Europe. I know it's, you know, a smaller piece of the business, but I know it's fair to say some of that you were probably contemplating back in September, but just wanted to get a mark to market on the business and how it's performing there, and if you're seeing anything in terms of weakening on the part of the consumer since September. Thanks. Yeah, that's an insightful question. We are worried about the European consumer over the next six months and just focused on the effect of heating bills. Now, I'm sure you've read about the government support to try to cover some of that, but just to give you an illustration, like our utility bills in our U.K. plant are up 80%, year-over-year. It is something to watch. It's something we've built into our Q4 look. It is a concern. It's a good observation, Brian. Thanks, guys. I'm good. Okay. Thank you. I'm showing no further questions at this time. Let's turn the call back over to Matthew Farrell for any closing remarks. Okay. Hey, thanks everybody for joining us today, and we do look forward to talking to everybody about 2023. Thanks for joining us. Thank you. Ladies and gentlemen, that concludes today's conference. Thank you all for participating. You may now disconnect. Have a great day.