I'm Steve Powers. I'm the U.S. Consumer Packaged Goods Analyst at Deutsche Bank, and I'm thrilled to once again welcome the Clorox Company, to our conference. As you all know, Clorox has a leading portfolio of trusted brands such as Clorox, Glad, Fresh Step, Hidden Valley, and Burt's Bees. With us today to talk about their story is CEO Linda Rendle, as well as CFO Kevin Jacobsen. Thanks and welcome back. That's awesome. That's awesome. Thanks for having us, Steve. Let's start just on general terms to kind of give everybody a grounding. Maybe, Linda, you can talk. There's been a tremendous number of ups and downs and twists and turns over the past couple of years, but you've fared very well of late. Your most recent results were strong, being able to raise guidance into a year. Maybe, Linda, you can just ground us in how you're feeling about current trends. Outlined. Then Kevin, maybe just you can ground everybody in current fiscal year guidance. Sounds good. Thanks, everyone, for your interest. Happy to be here today. It has certainly been a period of ups and downs for all of us over the last few years, given everything that's going on. We are really happy with our progress that we've made, particularly in accelerating top-line momentum, which we set out to do in our IGNITE Strategy. If you look at kind of CAGRs in any period, we've been at the top end of that range. We have a lot of work to rebuild profitability, given the significant amount of inflation that our company has experienced over the last few years. We are really happy with the progress we made over the last few quarters, given the level of pricing and cost savings that we've been able to activate. The job's not done. We have to make additional continued progress on the margin front, continuing to rebuild that. We remain committed to building it back to pre-pandemic levels. Really importantly, doing that while we maintain that top-line momentum. Continuing to invest in our business, ensuring that we have the right level of advertising and sales promotion, we're investing in innovation, and of course, investing in our digital transformation as well as our operating model change. If we step back and look at our IGNITE Strategy, which we were really happy about when we hit the pandemic, that we had made that set of choices in 2019, they've played out really well. We've made good progress. Maybe I'll quickly take through them, since I know we don't have a ton of time for me to sit here and give you a 40-minute dissertation on our IGNITE Strategy. We really wanted to ensure that we were accelerating what we were already good at at Clorox and then able to accelerate our financial performance. The first choice we had made was to fuel growth. Goodness gracious, do we need that now? Our ability to remove waste out of our system and drive cost savings. We thought we could do that in an expanded way. We are actually doing that even more expansive ways now and figuring out how we can remove cost, take pricing to ensure that we build back margins to where they need to be to invest in our business. We wanted to innovate experiences. Primarily, we wanted to do that through ensuring we had the right shopping experiences for consumers through partnering with category growth ideas with retailers and creating bigger, stickier innovation platforms that led to more value from innovation. We have done that. If you look at the last three years, we've delivered significant incremental growth from innovation, and we're going to continue to be focused on that moving forward. I'll skip to the fourth choice, come back to the third one. On Evolve portfolio, we continue to see great opportunities on our core to strengthen our business, and we have leaned into that through investments. We have stronger brands today than we did when we set out on that strategy. If you look at our superior rating from a brand perspective, about 70% of our portfolio is deemed superior by consumers. Pre-pandemic, we were in the mid-50% range. Our brands are stronger than they've ever been as a result of the actions we've taken. The final choice we called Reimagine Work. Back then, we envisioned partly what we are doing today, but really, we were expressing this in a very different way. The world has changed. The operating environment is like nothing we have ever seen before. We need to be faster. We need to be digitally enabled, and we need to be leaner. We put in place a $500 million investment in digital transformation, which we are in the first two years of implementing. We have a few years left, as well as an operating model change, really putting the business units at the center of what we do to ensure that we are consumer-obsessed, faster, and leaner. That is all going well and helping contribute to results, and we expect to continue to make progress over the coming couple of years. Great. Kevin, just run us through current guidance for the year. Yeah, I'd be happy to. You think about our financial goals this year. For you folks who follow us, you know last year was a very difficult year for the company, particularly driven by the level of supply chain inflation we've been dealing with. For perspective, a typical year of inflation for Clorox is about $75 million, roughly. Last year, we experienced about $800 million with the supply chain inflation. As a result of that, we saw our margins compress last year, about 800 basis points, and we saw profitability contract as well. We're really on a journey now as we move forward. We're committed to rebuilding gross margins back to those pre-pandemic levels. Doing that, as Linda said, while we continue to invest in the business and continue to maintain that top-line growth rate. That's really what we're doing this year. From a financial outlook perspective, we're targeting 3%-4% organic sales growth this year. We've executed now four rounds of pricing, including our most recent round in December. That's all going very well for us. We're working to rebuild gross margins. We think this year we'll rebuild about 250-300 basis points. Getting back, making progress on that 800 basis points we lost. A lot more work to do as we move forward, but good progress this year. Earnings per share on an adjusted basis, we're targeting 6%-10% growth. Making progress. The other one I'd highlight is free cash flow, which is an important metric for us about the cash we're generating that we can reinvest in the business. We target 11%-13% typically. Last year, as a result of our reduced profitability, we generated about 8% free cash flow as percent of sales. This year, I expect we'll get that back up into the high single digits, low double digits as we work back at 11%-13% over time. A good year this year, but plenty of work to do as we move forward. As you think about you're coming up on the end of fiscal 2023, a few weeks away. As you think about momentum in the business and the progress you're making against some of those financial objectives, I know it's too early to be overly specific about 2024, but what are some thoughts, some frameworks that you maybe can provide investors as to how you're thinking about approaching questions of what appropriate fiscal 2024 targets should be? I'll start, and Kevin, please build. We want to maintain that focus on maintaining top-line momentum while rebuilding margins and getting that balance right. We think we have the right actions in place, and we'll continue to execute against those actions in fiscal year 2024. We're looking very carefully at our categories. They've held up very well in pricing. We've maintained share during that period of time of taking four big price increases across the majority of our portfolio, and we're looking at that. We want to make sure we keep our categories healthy and starting to implement additional actions. We took the vast majority of the truckload pricing that we had anticipated. We'd want that to be less now and move to things like net revenue management, price pack architecture to continue to rebuild margins, continuing to lean into our cost savings program. What we are watching is what we cannot control. We are ready with plans to pivot against that. The expectations for what we see in inflation are that we continue to expect there to be inflation in our Q4, and we would expect that to continue into 2024. From a consumer perspective, they are holding up very well now, but it is going to get tougher from our estimation for them. Who knows what is going to happen? Will the world, the U.S., see a recession? How deep will that be? Certainly, as they continue to have weaker balance sheets and less liquidity, what will the impacts be? We are in very recession-resilient categories, and we tend to fare well during these times, but it is something we are watching very carefully as we head into fiscal year 2024. That is the framework we want to maintain; we are ensuring that balance. We want to maintain our superiority with consumers, continue to invest in our brands, but we're going to have to be agile as we adjust to this environment. You know, the only other thing I'd add beyond, as Linda said, continue to drive the top-line growth rate, continue to rebuild margins, is continue to prioritize our strategic investments. We have two critical initiatives. The digital transformation Linda talked about, next year will be year three of our five-year investment cycle, as also our streamlined operating model. This is an operating model we started implementing at the start of this year. We expect that to be a two-year program that'll deliver about $75 million-$100 million in value. We're very much on track to complete that at the end of fiscal year 2024. You should expect to see that program continue to advance next year as well. Okay, great. There is a lot of conversation early already in this conference around pricing, pricing power. It has shifted. The conversation shifted from who can take price, how much price can be taken, to who is going to be able to hold price. The concern of investors very palpably has shifted to risk of price rollbacks, promotional investments, etc. As you think about where you sit from a pricing perspective, you have taken four rounds of pricing. Are you looking to take more price? Are you looking to toe the line on price? Are you open to the possibility that you may have to invest in price as we go forward? How do you think about those scenarios, those range of scenarios as we go forward? I would start with pricing has gone well. Elasticities are generally in line or better than we had expected based off of historical elasticities. That is good. Again, we will be watching what the consumer does. The way that we are thinking about pricing is we are going to shift more to net revenue management levers and less truckload pricing. However, if the environment plays out differently and there is significantly more inflation than we would expect, we might have to lean more into truckload pricing in order to accomplish that or push out margin if we felt like we could not take additional pricing. We are focused on the following. One, maintaining the pricing we have already taken in market. If you look historically, we have only rolled back one price increase in 20 years. This is an environment like we haven't seen before, but the history would be that we can take pricing and we can maintain it in the market. We're focused on ensuring our price gaps are right. In the places where charcoal is a good example, competitors didn't fully follow and private label, we are making adjustments to our plan to try to maintain that truckload pricing, but ensure our price gaps are right in the short term and hoping that will adjust over time. We are ramping up that activity in those other areas, like getting price pack architecture that takes longer because you have to reach full supply chains at times, etc., to get the right packaging or the right footprint available. We'll use more of that as a lever. Hold on to pricing. will take more if we need to, given the environment, and switch to new mechanisms to take pricing over time and support growth is how we are thinking about it. When we look at the consumer, the good news is our categories are very resilient during times like this. We are in essential categories that people use in their everyday lives. We think that will fare well. Our brands have never been stronger, and we are going to continue to invest in them. That is the mindset we are in, maintain what we have, take additional action as required, continue to invest in our brands. If worse times come, we think our brands are well positioned to deal with it. On that chart, is there any update on the specific situation you mentioned in charcoal in terms of where are we in that process? What's been the response so far in the market? Where do you think is that dynamic limited to that category because of a specific competitive situation, or is that a canary in the coal mine that's going to spread to other categories? We think it's isolated to this category, and it's very specific. Charcoal, we primarily compete with private label, and private label did not fully follow the price increase. We have taken actions as a response to that. That happened in Q3, which happens to be one of our smaller quarters. We're in Q4 right now, which is our largest quarter for charcoal. We have two major U.S. holidays with Memorial Day and July 4th that are celebrated, and about 50% of our Kingsford business is done in Q4. We believe we've taken the actions required to make the adjustments we needed to the plan to make sure we had the right price gaps, but also so that we had the right plans with retailers. Obviously, we won't talk about the quarter in the middle of the quarter. We'll talk about that in August, but the team did take immediate actions after what we learned in Q3, and we're hopeful that they will do what we expected them to in Q4. I mean, this year was a year of trying to realize those price increases to start to rebuild that gross margin kind of openly at the expense of volume and household penetration. As we go forward, how do the priorities shift? Where are we in the pendulum of focusing on price versus focusing on volume rebuild and a household recovery rebuild? And when do you think, I mean, essentially, when do you think you can get the portfolio back to those high watermarks on household penetration and volume? First, maybe a comment that's just a helpful framing. If you look at what we expect to end this year at, our volume will still be larger than it was pre-pandemic. Even with all that significant pricing and the volume declines that we've seen in the last few quarters, we're still a bigger business from a volume perspective. Certainly, though, price mix has played a very big role over the last year as we've taken all of those actions. To your point, at the trade-off of volume, which we made openly, that's what elasticity is. It's been better than we expected it to be. Same thing for household penetration. Typically, when you take a price increase, the first people you tend to lose are your light users, not usually the people who use your category day in and day out or your brand day in and day out, but the people who come in and out of the category. That has been the case for household penetration. We continue to see heavy buyers buying more, which is a very good sign. The people that we are seeing drop out are light users, which we think is very manageable and in line with our expectations. Over time, we will begin to build that back. That is the reason why we are not slowing down on investments and advertising and innovation, and of course, in our digital transformation to support that. What you will start to begin seeing is we are beginning to lap those price increases. Price mix will be a smaller contributor. Volume loss will be smaller as well. We will begin to rebuild volumes. Here's what I'd say, though. Exactly that timeline, given we're still looking at what 2024 will look like and what we expect inflation to look like, what we expect the consumer to look like. I won't give a specific timeline exactly when that will shift, but you'll start to see volume play a bigger role next year, and we would expect to continue to grow that beyond that. If you look at our categories, volumes typically grow very low single digits in our categories. We would expect to return to that and then have growing share be a helpful contributor to volume as well. We know how to get light users back in the category. We've done it for a number of years. Certainly, during the pandemic, we leaned in and invested, and we brought a lot of new users to the category, some of which we converted to medium and heavy users, and then some others that have dropped out now, but we will continue to use innovation and merchandising to bring those people in and convert them over time. Another question that I know you get a lot, but it's top of mind, is how some of these dynamics net out into gross margin progress, right? You have made significant gross margin progress back above 40% last quarter, which is a significant improvement from, I think you bottomed around 33%. Significant improvement off the bottom, but not yet back to where you started. How do you frame your aspirations on that front? Clearly, there are a range of scenarios, a lot of things you do not control. Is there some kind of framework or paradigm that we can think about as you think about it to say, "Okay, I want to be in this corridor as we go forward over time"? What is the timeline? What is the process? You You think about that margin rebuild, and what would make you, I guess, what is the limitation on what unsatisfaction? Sure. I think it starts with our goals. We've been very clear. Our goal is to rebuild margins back to those pre-pandemic levels. We lost about 800 basis points as a result of cost inflation. We're making progress this year, building it back, but our goal is to build all the way back to about a 44% gross margin. Now, what's important for us is to make sure we're striking the right balance between maintaining investments and growing the top line while rebuilding margins. That's ultimately how we'll maximize the value of the company. For us, Steve, we've tried to take a view of this is something we want to do at the right pace that allows us to continue to invest in the top line. As a result of that, we expect to make more progress in our fiscal year 2024, which starts next month. I do believe this is a multi-year journey, though, for us to get back to pre-pandemic levels, and we think that's the right pace. What you'd see is good progress next year on a way to that 44% gross margin, but that'll carry beyond fiscal year 2024 for us. Okay. Of the different variables that you do control, we talked about pricing and revenue growth management, but there is cost savings, there is optimization of supply and utilization. How much of the path forward on margin is in your control versus is dependent on the macro backdrop or the competitive environment as we go forward? Yeah, it's a great question. I think if you think about what we can control, and this is a good year, we're driving pricing, we're driving cost savings, and something we haven't talked about, we're driving what we call supply chain optimization. We built up tens of millions of dollars of costs in our supply chain as we were managing through the pandemic and the supply chain disruptions. We now have the opportunity to go back and pull that money out. Those are the levers we're driving this year. Usually expect as we move into fiscal year 2024, we'll keep driving those levers. I think pricing will not be as material as it is this year, but you'll continue to see very strong cost savings, more supply chain optimization. I think, Steve, on those areas we do not control, which is primarily the cost environment, as well as how the consumer holds up, I think that will either accelerate or delay our time to margin recovery. We are going to focus on things we can control. I would say feel very good about our progress this year and what we can continue to do as we move into fiscal year 2024 and beyond. What we do not control is cost environment. I think, as I said, that will either delay or accelerate our time to that margin recovery, and we are just going to have to see how that plays out over time. Investors look at your business sometimes overly simplistically, in my view, and probably your view. The spreadsheet math is pretty compelling, right? If you start from where we are now, your guidance has you at the top end of your guidance here at $4.50 in EPS for this year. If you carry your kind of top line algorithm forward, you rebuild that gross margin, and you achieve your other objective of holding SG&A to 13%, you start to get earnings power of $7 looking out in time. I guess a key variable in that is that path 13% SG&A. How much, in your view, is that a function of top line leverage versus actual cost cutting in SG&A? And where are the opportunities to drive actual cost reduction? Sure. Leverage will be a piece of it, but really what's going to drive our admin spending. And if you take out the one-time cost, we typically operate around 14% admin as a percent of sales. Our intent is to get that down to 13%. The primary drivers are really twofold. The first is our operating model changes we're making. We expect to save about $75 million-$100 million over this two-year period. That progress, that initiative is well on track, and we should complete that work next fiscal year. That would be an important component. The other element is our digital transformation. We are investing $500 million in fundamentally changing the technology capabilities of this company. There's tremendous productivity opportunities behind that. If you think about it as an example, our ERP, it's almost 20 years old. You think about the advancements in productivity on technology and new ERPs. Now, that's going to take some time. As I said, we're just completing the second year of our five-year investment cycle. It's going to be a longer timeframe when you'll start to see the benefits from admin productivity from that initiative. I think in the near term, you'll see the benefit of operating model. Longer term, you'll see the benefits from our digital transformation. Collectively, that'll put us on a path to get down to 13% over time, but that's something that'll take some time to get to. Okay. Can we maybe focus in on that digital transformation program? Because it's gotten a lot of discussion over several years, and mostly just around the cost of it and whether investors should include it or exclude it, because it's cash charges, cash investments, so it is material, but it's also one-time. It's a one-time transformation. I think maybe what's lost in that is just the magnitude of that transformation. Can we focus more on that part of it? I mean, how can investors conceptualize how different Clorox will be once that transformation is behind us? What will you be able to do that you weren't able to do a couple of years ago? Just sort of how pivotal will that be to building capabilities? I'd love to focus on that part of the digital transformation. Thank you, Steve. You characterize it exactly right. There's not one person at Clorox who will work the same two to three years from now as they do today. Not one. We fundamentally are enabling the company through technology and through process change, through technology transformation. This means that our supply chain, the way that we market, the way that we innovate, the way that we close the books, you name it, we are reinventing it. This is as a result of we have a 20-year-old ERP. We have to put the foundation in place, and then we have to put the capabilities around that to enable the team. Had we had this during the pandemic, it would have really helped. One, drive more top-line sales, and two, help us from a margin perspective. We are operating in many cases very manually today on things on Excel spreadsheets. We were managing inventory when we had 27% sales growth and things fluctuating. We were having teams manually call. We are putting all of the technology in place to ensure that we have the right data and, importantly, the right insights, whether that be on the cost side, on the growth side, in order for us to manage our business. We are doing what it takes from an operating model perspective to make sure we use that the right way. We want our team to be more consumer-obsessed. We want them to know consumers better than anyone else does in our categories. This will unlock that even further for us. More real-time insights, ability to react more quickly, ability to do things that we hadn't done before, like fully integrated business planning with AI models and machine learning. We've started to pilot those things, and we're seeing what we've signed up for because this project has a great return. We're starting to see those things come to fruition as we begin to put them in place. It is. It's fundamentally the Clorox Company will operate differently than we did pre-pandemic and even as we are now with all of the right backbone and capabilities to ensure we can compete at the speed that's required and against the aggressive operational goals that we put in place to rebuild margin and maintain growth. Thank you for asking it that way. I mean, it's grown on me over time, and I appreciate just how fundamental this was. I mean, the spreadsheet inventory management example, I think, is pretty clear. When it's over, you'll be light years ahead of where you were. How do you ensure that that will also be at least competitive with, if not ahead of, your competition? Because a lot of these things are obviously moving targets. We need to maintain it. What you'll hear from us is just a continued commitment to knowing that this is a core way that will create value and the way that we spend our normal tech because we spend normal technology money that we would spend that in the best way to keep those systems updated. For example, we are looking at AI and GenAI and what that offers, and we're thinking about how would we do that moving forward and how do we build that in and ensure that we stay current so that we don't fall behind again. That's our mentality. Obviously, technology is changing fast. Who knows what's going to be here 5 to 10 years from now? Our commitment is to ensure that we're keeping pace so that we don't fall behind again. Okay. Does that, what kind of, if there's a way to frame this, but what kind of run rate? I mean, the I mean, the $500 million, you've been clear, is $500 million, and then it falls away, and then the run rate expenses keep you up to date. Do those run rate expenses mimic the run rate expenses of before, or are they structurally higher because you don't want to fall behind? We'll have to see exactly how that plays out. Our expectation is it'll generally be in line. We were spending quite a bit of money. In fact, you could say fairly inefficiently because we're trying to maintain very old systems. There's going to be a lot more efficiency on how we spend that money going forward. Right now, you should generally assume the money we're spending historically for maintenance will be what we'll spend going forward after we get past this $500 million investment over five years. Your long-term targets, 3-5% growth as part of the updated IGNITE Strategy. I guess we've talked about this before, but remind us why those are the right targets. I mean, how do you envision your various segments contributing to them over time? Those targets do represent an acceleration versus past performance from a top-line perspective. What we called out is we thought we had the opportunity to capitalize on consumer megatrends in order to drive extra growth. We wanted to lean into innovation and brand building to do that. We can create bigger innovation platforms that we can invest in for multiple years. We've given examples of those in various conferences, and I'm happy to talk through any examples today as well that allow us to continue to create more. We want to at least grow at the rate of the category, and we want to grow share over the long run in order for us to get to those targets by investing behind our brands. We saw opportunities before the pandemic, and the pandemic has given additional opportunities. For example, our cat litter business, which was a nice contributor prior to the pandemic, but given the rapid rate of cat adoptions, much to Steve, I know you don't love that. I'm allergic to cats too, although I appreciate them for what they are. They're a nice little business and they're cute and fluffy, and they make good cat videos, but a lot of people adopted cats during the pandemic. That category is a stronger contributor for us and something we can take advantage of through innovation and brand building more than we thought we could in Ignite. People are continuing to clean more than they did, not at the height of what people were doing during COVID, which I think is a relief for everybody, but people care more about it. We can create additional opportunities through innovation to get that extra point of growth that we're talking about. I would say from a business standpoint, we expect all of our businesses to grow and all of them to contribute to margin growth. Of course, that is dependent on their role in the portfolio, at what time and where we can lean in in a particular year if we have a great innovation. That will always change year to year depending on the opportunities. We feel good about the portfolio we have, the exposure to growth that we have, and our ability to leverage that through innovation and brand building. We remain committed to the 3-5%. It certainly has not been a linear path as we have had normalization, etc., but we have performed at the top end of that range if you look at the last few years on average, and we continue to hold ourselves to that standard moving forward. What about your opportunities overseas? Have they had evolved as part of the upgraded growth? Have they further evolved since, or you remain committed to the same opportunities you had seen a few years ago? We wanted to accelerate the performance of international and have it be a bigger contributor to the company's growth, and it has done just that. That was true pre-pandemic and then during the pandemic because we have such a large portion of our business in the cleaning segment. We saw opportunities to bring new innovation to market like wipes in markets around the world, and we continue to do that. That is a long-term growth opportunity. It took us 20 years to grow that category to the degree it is in the U.S., and we would expect something like that around the world in the markets where it is relevant. We also had opportunities pre-pandemic like cat litter and Burt's Bees natural personal care, and those continue to contribute well also. For international, we remain on track. It will be, we expect it to be a stronger contributor than it was pre-IGNITE, and we continue to make the right investments there to do that. For example, localized supply chains, which we did during the pandemic, and to ensure that we had the right production capacity where we needed it. Yeah. So I mean, speaking of supply chain, let me just health check on the current state of the supply chain, where capacity utilization is, where service levels are, your overall satisfaction with the supply chain and its redundancy and your ability to drive productivity off the back of the current state. Yeah, I'd say we're making very good progress in the supply chain. If you think about where we were just a year, 18 months ago, fuel rates were down significantly from historical levels. We were building up cause to increase resiliency and responsiveness given supply chain disruptions. We took inventory levels up by hundreds of millions of dollars to make sure we could respond given supply chain disruptions. We signed up hundreds of additional suppliers to make sure we had redundancy. We've seen significant improvements in the supply chain broadly. As a result of that, we're able to go back and attack all those costs. We now have five straight quarters, Steve. We've been able to bring inventory levels down as we're getting more reliability in our supply chain. Last quarter, we had a case fill rate, the best case fill rate we've had since the pandemic began. We're seeing more consistency in our supply chain. It also allows us to go after all those suppliers we signed up. We're now able to go back and start optimizing those relationships to get costs down. That work is well underway. We certainly have more work to do, but I'd say it's absolutely going in the right direction. We're making progress for sure. Okay. That supply chain modernization resiliency was kind of layered in as part of the IGNITE Strategy as an enabler of growth. I guess two others that are interesting to me right now are innovation and R&D, specifically bigger, stickier innovation was the objective of IGNITE, as well as improvements in digital and data analytics. You talked about some of the transformation, but I'm thinking more of the backbone is one thing, but then actually layering on the functionality capability on top of that. How much progress do you feel you've made on both being able to drive consistently that bigger, stickier innovation on the one hand and on the other hand, driving competitive, if not advantaged, consumer insights and data analytic capabilities? Maybe the framing that we look at it, we look at the stuff that we have always done in investment that we need to do better because there's modern capabilities. That would be in the area of advertising and innovation, Steve. We've always focused on those two things, but we can do them more effectively and efficiently. Obviously, we'll use technology to do that. Kind of more one-time investments, the supply chain stuff that we spoke about, making sure that we have, for example, cat litter. We can't fully supply. It's one of the only businesses right now that is constrained. We're building a new facility. Once we get that up and running, that was a specific investment to get us to the place we needed to. The third layer, which is more the new investment, is in this digital infrastructure that we talked about and capabilities. I would say on the first bucket, the stuff that we do, we continue to optimize. We're making good progress. Innovation, we're getting bigger platform ideas. We're seeing it stickier in market. We're getting more of a net impact. And our advertising dollars, we're driving significant efficiency. I know we've talked about this before out of that. So feel really good about the kind of continuing to evolve our capabilities and things that we regularly do. I think on the supply chain, Kevin just noted, making good progress there. On the digital transformation, I think we want to make sure we're clear. The vast majority of the value from that program happens in the back half and next strategy period because we're still putting those capabilities in place. We only put the first instance of our ERP in Canada in the fall, coming up in the fall, and then we will a year later follow with the U.S., and then we'll go around the world. Just having that foundation in place and then all of the capabilities that go around, some are being put in place now, and they're either in test or in one business unit that we're beginning to expand to other business units or still just in the design phase. It's important work. It's helping inform the work that we do today to rebuild margins, but the vast majority of that value happens later, and we're in early innings. Okay. Are you behind? Yes. You're behind with your own objectives. Are you behind competition or? From a technology perspective. Yes. Yes. Okay. When do you think in this five-year journey you catch up and ultimately can you get ahead? Maybe what is the goal? Should we be ahead? We should be leading top third in places where it really matters because we do not want to overinvest in capabilities that do not differentiate us. For example, in marketing, we want to make sure that we are in that more leading-edge pack because it is something that is core to how we create value for our brands from a superiority perspective. In other things, we just want to make sure that we have the right technology and, of course, hopefully we will execute better than others do and that we would be at the right average. We will not be there until we finish this implementation. We would expect to be in line with our peers and then in distinct capabilities that we think are unique to how we create value. We would want to be more in the top third. I don't think it would ever be appropriate for us to have big scale capabilities that are leading the number one. Given the size of the company we'd had, I don't think it's necessary. What we can do is learn a little bit from what others do and then implement and execute with excellence. Yeah. I guess I was thinking about it. I think behind, are you also behind your direct competition? Is there a distinction between your peers and your direct competition? Because a lot of your categories, you're competing, you're kind of the big player in relatively smaller niche categories. You're competing oftentimes with private label or with private competition. Is there a distinction between being behind against the broader peer set and being behind against your competition? We compete against multinationals in many of our categories, and we do have private label too. Against private label, we play a very different game than they do. We are about innovation and using technology. You would assume we are ahead to some degree and that they are going to follow. If you look, only really three of our businesses are exposed to significant private label. The rest are more average or lower. We compete against big multinationals in home care and in litter and in Burt's and natural personal care. In those, we are behind, but still have leading brands that are able to outperform and out-execute in order to continue to have leading share brands. Okay. A couple of minutes left. Maybe we close off a few questions on cash and cap allocation. On free cash flow, you've historically targeted 11%-13% of sales. Like many companies, you've been a little bit behind that target in recent years because of CapEx, because of inventory demands as supply chain issues were elevated. What's the path back to that range as a sustainable run rate? Sure. I think the path back is everything we've been talking about today. As Steve said, our goal is 11%-13% free cash flows as a percent of sales. We ended last year a little below 8%. This year, I expect will be high single digits, low double digits. We're making good progress. The path back is exactly what we talked about. It's rebuilding gross margins, rebuilding profitability, optimizing working capital. As we execute those initiatives, that's the path we're starting this year, and you should see that continue as we move forward, Steve, but very much tied to our operating plan improvements will lead to more cash we'll generate over time. Okay. As you get that cash back after organic reinvestment in this environment, your appetite or priorities change at all on how you deploy that capital in terms of cash return to shareholders, deleveraging and debt paydown or optimization, as well as obviously M&A? Yeah. The priorities have not changed. As Steve said, job one for us is to invest in our base business. That is what we will continue to do and we have been doing throughout the entire pandemic. After we get past investing in the base business, we will continue to actively support the dividend. We are one of, I think, 68 companies that dividend or risk of credit given our long-term commitment to the dividend. You should expect that going forward. Now, we have seen more modest increase in the dividend because of our reduced profitability. You will see over time, typically we want to grow the dividend more in line with profit growth, but it will be more muted until we get back to that more normalized level of profit. Third priority is we will focus on our leverage. We target debt to EBITDA of 2-2.5 times. Historically, we've operated the very low end of that range. More recently, we've seen our leverage ratio tick up. Our debt levels have not changed, but because of reduced profitability. We ended last year about three times. This year, we'll start bringing that down to 2.7-2.8, and I expect next year as we continue to rebuild profitability, getting leverage back into that historical range of two-2.5 times. We will look at returning excess cash to shareholders. We suspended that program last year because of the reduced cash flow we're generating. When you get back into that 11-13%, that gives us more flexibility. Typically, that's plenty of money to invest in the business, support the dividend, and then look about how best to deploy that. Either we look at M&A or we do share buybacks. I think that's something we'll look at over time, but we're not there yet. Okay. On M&A, I mean, there have been successful over time additions to the portfolio. Burt's Bees comes to mind. I think a lot of investors also think about mixed success currently in BMS and previously that efforts to kind of penetrate the professional healthcare channels, mixed success. Does kind of the long-term history or the more recent history of Clorox on from an M&A perspective influence you at all? Does it change maybe where you focus, how you focus? Does it change your overall appetite to go spend money inorganically versus invest in the organic opportunities you've talked about? I think what hasn't changed is always we absolutely have to get the core right, and that's absolutely consistent. I think, no, we've learned a lot, and that's the most important part in the successes and the ones that haven't gone as well, BMS being one of them, of what we would do moving forward. We are always looking at our portfolio with our board. We're always looking at opportunities where we can apply our capabilities, and we're looking for a good return. Of course, it's been an interesting market over the last several years, ups and downs in that. We've been really focused on getting our core to steady state, getting our supply chain up to where it needs to be, being able to fully supply, doing our digital transformation. We are very open to acquisitions in the future where we can apply our capabilities. Again, we would look to make a good investment that we thought would be a strong return for our shareholders. Great. I'll give you the last word. We covered a lot of ground. Is there one, two, three things you'd like investors in the room or listening to take away? First, thank you for your attendance. We really appreciate your interest in the company. We think we're taking all of the actions necessary to do what we're setting out to do, which is to maintain that top-line momentum and rebuild margins over time. We've made good progress. We have more work to do, and we're focused on the things that we can control in order to do that. Looking forward, I don't know exactly what the environment's going to hold, but what we do know is that our brands are very well positioned. They're at the highest value superior rating that they've ever been at. We continue to invest in them and invest in our capabilities across the company to be well positioned to handle whatever comes our way and deliver profitable, consistent growth over time. Thank you. Great. Linda, thank you. Kevin, thank you. Thank you all.