Greetings, and welcome to Reynolds Consumer Products Inc.'s second quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mark Swartzberg, Investor Relations. Please go ahead, sir. Good morning, and thank you for joining us for Reynolds Consumer Products' second quarter 2022 earnings conference call. On the call today are Lance Mitchell, President and Chief Executive Officer, and Michael Graham, Chief Financial Officer. For our agenda today, Lance will focus on market conditions and our fundamentals, and Mike will review our quarter and outlook. Together, our remarks will be approximately 20 minutes, then we will open it up for your questions. During the course of this call, management may make forward-looking statements within the meaning of the federal securities laws. These statements are based on management's current expectations and involve risks and uncertainties that could cause actual results and outcomes to differ materially from those described in these forward-looking statements. Please refer to Reynolds Consumer Products Annual Report on Form 10-K and other reports filed from time to time with the Securities and Exchange Commission and its press release issued this morning for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Please note management's remarks today will focus on non-GAAP or adjusted financial measures. A reconciliation of GAAP measures to non-GAAP financial measures is available in the earnings release posted under the Investor Relations heading on our website at reynoldsconsumerproducts.com. The company has also prepared a few presentation slides and additional supplemental financial information, which are posted on Reynolds' website under the Investor Relations heading. This call is being webcast and an archive of it will also be available on the website. While we would like to answer all of your questions during the question-and-answer session, in the interest of time, we ask that you ask one question and a follow-up and rejoin the queue if you have additional questions. Now I'd like to turn the call over to Lance Mitchell. Thank you, Mark. We delivered another quarter in line with our earnings expectations in what continues to be a very dynamic environment. First half and second quarter highlights include continued share strength across our business. Share gains in branded waste bags, branded disposable tableware, and multiple cooking and baking categories. A return to shipments aligned with consumption. Further narrowing of the price-to-cost gap across most of our business, including a further improvement in waste bag profitability. Delivery and expansion of Reyvolution Savings. A substantial slowdown in foil consumption has been challenging. However, category declines have been moderating since late June, our branded volume share is growing again, and a number of corrective actions are underway to address this issue. In addition, lower cost inventory has a positive impact on foil margins as we head into the holiday season. I will go into our foil plans and other revenue drivers in a moment. Before I do, I want to highlight a few things about the environment and our unique advantages and position within it. Our category advisors are diligently working with our retail partners to support our categories and drive traffic. As you would expect, consumer behavior during these dynamic times is top of mind. That means we are having numerous discussions about the optimum balance of brands and private label, promotions, pack sizes, and features and displays. I also want to point out that our price leadership and the cumulative value of our pricing actions, together with declines in aluminum and polyethylene rates, are producing a closer alignment between price and cost, which we have been pursuing since late 2020. This translates into an anticipated margin expansion and earnings growth in the fourth quarter and a significant increase in flexibility to invest in trade, advertising, and other category drivers as we plan for the holidays and next year. Michael will elaborate on that shortly. Now, let's talk about our main drivers of growth, pricing, consumer demand, innovation, and manufacturing and supply chain capabilities. In the area of pricing, we began increasing foil promotions in June, motivated by the historically strong impact of promotions, and we are encouraged by the consumer and retail response. We are implementing additional promotional activity over the balance of the year, including a substantial step-up in October, in order to drive holiday-related demand. We've announced another round of pricing for our tableware products to offset the additional cost increases for polystyrene resin and an additional increase for Hefty brand waste bags. In terms of elasticity, the foil category is demonstrating the largest increase in elasticity, prompting many of our actions. Our other categories are also seeing increased elasticity by comparison to what we were seeing earlier in the year, and we are watching them all closely. Changes in consumer consumption in our categories has been more dynamic than we have seen historically. We will continue to respond with corrective measures. Turning to consumer demand. As you know, our products are in 95% of U.S. households, and we have benefited from the changes in habits triggered by the pandemic. We've been meeting these changes in habits, and as I said earlier. We are uniquely positioned to respond to new opportunities as economic conditions change. We rely on consumer market research, which allows us to better understand who is driving our categories and their needs. We stepped up these capabilities during the pandemic and made a number of discoveries. For example, an increased portion of men and younger consumers are more active in the kitchen and home than they were prior to the pandemic. That's a major opportunity in any economic environment. Here are a few examples of how we're responding to it in this environment. In foil, as I said, we're stepping up promotions, allowing us to hit lower retail price points and increase purchase frequency. We're also increasing features and displays to drive usage and targeting advertising to reach younger consumers. In waste and storage, we're seeing strong back-to-school demand in branded and private label products and driving the Hefty brand through innovation, larger pack sizes, distribution gains, and additional advertising. In disposable tableware, we're driving party cups with a particular emphasis on the club channel. The third driver of our growth is innovation. Our standout innovations continue to be Hefty Fabuloso and Hefty ECOSAVE, each of which continues to demonstrate high velocity while also gaining distribution. Other notable contributors in the quarter and year to date include new Hefty Fabuloso 4 -gallon waste and 8-gallon waste bags for use in additional rooms of the house and private label waste bags with odor control. Hefty Fabuloso and Hefty ECOSAVE are delivering as major platforms for innovation, and we plan to expand them. In terms of new innovation, we just introduced Hefty Compostable Printed Paper Plates, Reynolds Kitchens Compostable Wax Paper, and other Reynolds innovations are in the pipeline, and we plan to introduce a wide range of branded and private label products offering sustainable solutions that are wins for consumers, retailers, and RCP alike. Our fourth driver is manufacturing and supply chain capabilities. Staffing and supply chain conditions continue to be challenging, but they are stabilizing and much improved versus late 2020 and 2021 levels. Before I pass the call to Michael, I'd like to leave you with the following. We're well-positioned for changing economic conditions, and we're responding with promotions, pack sizes, advertising, and other pieces of the marketing mix to meet our consumers' increased emphasis on affordability. The gap between our pricing and material, manufacturing, and logistics cost increases is nearly closed, and we are on course for margin expansion and earnings growth in the fourth quarter and 2023. This means not only a return to earnings growth, but also increased flexibility to invest in our categories and drive future innovation and consumption. We are executing with excellence in our mission to simplify daily life so consumers can enjoy what matters most. I'm extremely proud of the RCP team as we navigate through these dynamic times. We are well-positioned to realize the benefits of the actions we've taken over the last two years. With that, over to you, Michael. Thanks, Lance, and good morning, everyone. I'll briefly review our second quarter results, then I'll turn to our guide and why we are well-positioned for margin expansion in the fourth quarter and 2023. Net revenues in second quarter were $917 million, an increase of 5% over second quarter net revenues of $873 million in 2021, primarily driven by price increases and partially offset by a decline in volume. Adjusted EBITDA for the second quarter was $118 million, down 20% versus last year's second quarter of $148 million, driven by lower volume, primarily due to declines in foil consumption as well as higher materials, manufacturing, logistics, and advertising costs. Significant price increases across our entire portfolio offset all material cost increases and a large portion of increases in manufacturing and logistics costs. We expect to close the remaining gap between price and materials, manufacturing, and logistics cost increases in the third quarter and to see an additional margin benefit in the fourth quarter, driven by anticipated progressive easing in aluminum cost and implementation of additional pricing. Adjusted earnings per share for the quarter was $0.26. Turning to our segment performance, details are in our press release in 10-Q, so let me give you the highlights. The 5% increase in net revenues was driven by low- to mid-teen increases in pricing in each of our business segments, which was partially offset by a 9% volume decline driven by Reynolds Cooking & Baking, and to a lesser extent, declines in two other segments. Our overall price increase of 14% is consistent with the year-to-date increase of 13% and reflects our effectiveness in recovering all material cost increases and a large portion of increases in our manufacturing and logistics cost in the second quarter. As you know, in May, we expected a mid to high single-digit volume decline in the second quarter. As Lance reviewed, slowing foil consumption was a substantial headwind in the quarter. The 19% decline in Reynolds Cooking & Baking volume also reflected a decline in low-margin reroll volume and an additional headwind from timing of retailer replenishment early in the quarter. Whereas volume declined 3% in Hefty Waste & Storage, driven by lower waste and food bag usage as consumers are spending less time in their homes. As Lance mentioned, branded waste bag volume and dollar shares are up in the first half. Volume was flat in Hefty Tableware as gains for Hefty disposable plates and private label party cups were offset by declines in other disposable tableware. Presto Products volume declined 7%, driven by lower waste and food bag usage. Turning to our outlook for the third quarter of fiscal 2022, we expect net revenues to grow 8%-12% on $905 million in prior years, driven by price increases and a low to mid-single digit volume decline. Adjusted EBITDA of $110 million-$120 million and adjusted EPS to be in the range of $0.21-$0.25 per share. For the fourth quarter of fiscal 2022, we expect net revenues to grow 9%-17% on $1.021 billion in the prior year, driven by price increases and flat to slightly down volume. Adjusted EBITDA of $220 million-$240 million, and an Adjusted EPS to be in the range of $0.59-$0.66 per share. For the fiscal year 2022, we now expect net revenues to be up 8%-11% on $3.556 billion in 2021, driven by price increases and a mid-single-digit volume decline, including the impact from timing of retailer inventory replenishment, primarily in the first quarter of this year. Adjusted EBITDA of $560 million-$590 million. Adjusted EPS to be in the range of $1.32-$1.43 per share. Net debt to be $1.9 billion-$2 billion at December 31, 2022. As a reminder, our capital allocation priorities are unchanged. As Lance said, elasticities have picked up, particularly in our foil business. Those assumptions are reflected in our guide. We continue to closely monitor elasticities and how they may change in other categories given the inflationary environment. In terms of other key assumptions, we assume rates for key commodities are stable to easing by comparison to end of July levels and estimate incremental cost pressures of approximately $525 million for the year, which is a $75 million increase by comparison to our expectations when reporting the first quarter results. We estimate depreciation and amortization of $120 million for the year, interest expense of $70 million, and an effective tax rate of 25%, and capital spending of $135 million-$145 million, down from our previous estimate of $150 million-$170 million, driven by extensions and timing of select capacity and other investments. In terms of phasing, our incremental pricing and cost comparisons have us positioned for substantial margin expansion that we expect in the fourth quarter. As I just reviewed, first half results reflected narrowing of the gap between pricing and cost increases. We expect that trend to continue in the third quarter and for our implemented pricing to fully offset increases in materials, manufacturing, and logistics costs. We also expect SG&A to be up in the third quarter versus prior year due to increases in variable compensation and advertising costs. As we enter the fourth quarter, we expect to see progressive easing of aluminum costs driven by existing inventory positions, and fourth quarter gross margin is expected to also benefit from the implementation of recently announced pricing. Now, before I hand the call back over to Mark and your questions, I want to leave you with a few thoughts on recovery of pre-pandemic profitability. We anticipate achieving pre-pandemic levels of profitability in 2023. We estimate this to be in the mid $900 millions when adjusting to current volume levels compared to pre-pandemic gross profit of $880 million. We expect closing of the gap between price and cost increases, as I discussed when reviewing the guide, to then be a major catalyst. In addition, as Lance mentioned, the cumulative value of our price increases is significant. Together with our category leadership positions and the anticipated easing of commodity costs, we expect this will allow us to increase category investment while also gaining additional margin. We are expanding Reyvolution cost savings based on a comprehensive business review, identifying and targeting additional procurement, manufacturing, and logistics savings, giving us added scope for investment in margin growth. In closing, we continue to manage through a very challenging environment. I'm encouraged about the actions we've taken as well as the implications for the future results. With that, I'll hand the call back over to you, Mark. Thanks, Michael. As I turn it over to the operator for your questions, I'd like to remind you that we ask that you ask one question and a follow-up, and then rejoin the queue if you have additional questions. Operator? At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question comes from Kaumil Gajrawala with Credit Suisse. Please proceed with your question. Hi, this is Theo Brito for Kaumil. So you're now guiding to volumes to be down mid-single digits this year. Can you maybe just remind us what was your expectation before? More importantly, what gives you confidence in the new volume outlook, please? Thank you. The answer to the first question was down low single digits. What gives us confidence in our new volume guide is, you know, this is a very dynamic environment. As I mentioned in the prepared remarks, you know, elasticities have picked up in much of our business, particularly foil. As I also said in our remarks, our category advisors are actively addressing changing consumer needs with our retail partners, and we're seeing an encouraging response to corrective actions in the foil category. Specifically, we have maintained all points of distribution that have historical share position. Our category declines have begun moderating, and we're gaining volume share as we picked up these promotions. The EQ volume for 12 weeks ending June 26, which was core Q2, essentially, the category was down 12.2%, and Reynolds Wrap was down 15.6%. The EQ volume for the four weeks ending July 31st, the category is down 5.6% and Reynolds Wrap down 4.4%. We plan to continue increasing foil promotions, features, and displays through year-end, including a substantial pickup in October to take advantage of lower foil costs and holiday-related demand. After many months lagging Reynolds Wrap price increases, we've seen private labels begin taking prices up. Now some of the other drivers in our other three business units, we expect our performance in the club channel, which is strong, to continue, and that's particularly important for tableware. Hefty Fabuloso continues to gain momentum with new distribution and introduction of multiple new pack sizes. We are stepping up advertising across our portfolio of Hefty waste and storage products and evaluating increases in promotions. We're also introducing new low price point pack sizes and additional value pack sizes. The changes in consumer consumption in our categories has been more dynamic than we've seen historically, and we're continuing to watch it very closely, and we will continue to respond with corrective measures. Our next question comes from Lauren Lieberman with Barclays. Please proceed with your question. Great, thanks. Good morning, everybody. I still just wanted to go back to the reason for the lowered EBITDA and earnings outlook for the year. You know, the conversation on, yes, the volume declines in foil are worse, but you know, we talked about this before and that you would turn the promotion on, and now you called out the higher cost basket. I'm just curious the sources of that big change because it just feels like 3Q is a little bit of a shock. I frankly thought there was maybe a little bit more visibility, you know, inherent in the business model. I'm curious, you know, mostly about 3Q. Thanks. Yeah. The main driver of our guide down is lower volume expectations as we are more in an inflationary environment and therefore elasticities have gone up. We estimate approximately 3 points less volume than we previously expected. Those 3 points represent about $40 million of lost contribution margin. That's all of the $40 million decline in estimated EBITDA, and when you look at the lower end of our guide of $615 and the midpoint of our current guide of $575. In terms of the third quarter EBITDA, in terms of volume, as Lance said, we're in a dynamic environment, and elasticities have picked up in all of our categories, particularly in foil. As we look at the commodity curve, the value of the pricing we have implemented, and we are expecting a significant increase in earnings in Q4 relative to Q3 as a result. Specific to Q3, in aggregate, the year-over-year benefit of pricing and Reyvolution is fully neutralized cost increases year-over-year, with the other segments compensating for Reynolds business, where we are still working through some of the higher cost aluminum. That has to be worked through in the subsequent quarters. This leaves volume and SG&A. We expect volume declines in the range of low- to mid-single-digit%, which is a headwind, but there are some offsetting margin benefits from improved innovation. As an example, Hefty Ultra Strong Fabuloso. The Reynolds Kitchens have performed very well, and we're expecting the same moving forward. Year-on-year, the decline really boils down to higher SG&A, with most of our total year-over-year increases falling in back half. The key drivers are increased advertising and market research and higher compensation costs, some of which is timing related. Okay. Just step back for a sec. Volumes in foil or cooking and baking being worse than expected in 2Q created a delay in the timeline for what you previously expected for moving through some of that higher cost inventory through the P&L. That's You got it. Okay. Then the SG&A piece that you were saying, Michael, I'm sorry, I was still, my brain was spinning on the inventory piece. There's also some higher SG&A that you've built in because you're investing more than you'd maybe previously had planned? Is that all for timing? Yeah. Okay. Okay, great. Then for Q4, you get the margin expansion because the timing is back to as planned in terms of moving to that lower cost inventory and then the incremental pricing. Let's go back to the SG&A point. Sure. You know, the year-over-year decline boils down to higher SG&A, with most of that total year-over-year increase falling in the back half, right? The key drivers are increased advertising and market research and higher compensation costs. Okay. All right, great. Okay, I'll leave it there and pass it on. Thank you. I'm fine. Who are you calling offline to? Thanks, guys. Okay, thanks, Lauren. Our next question comes from Robert Ottenstein with Evercore. Please proceed with your question. Great. Thank you very much. Can you talk a little bit about the competitive environment for trash bags, you know, what you see your competition doing, you know, how the promotional field looks like, and what you need to do to kind of get that business on a better path? Yeah, Robert, thank you for the question. We have seen a much more constructive environment in the competitive dynamics in the waste bag category. As you heard in my prepared remarks, we are announcing another price increase on Hefty waste bags. When that is completed, we will be recovering almost all of our costs, including labor and logistics, as well as resin, assuming the resin curve holds in that category. We've seen a very much more positive environment as it relates to the pricing dynamics across the category. You know, it's gonna come down to how the consumer consumption plays out as we go forward. How do you feel about your share trends? The share trends in the first half were positive. In the last four weeks, it's been pretty flat. Okay. Going over on the aluminum foil side, how do you see that category playing out in terms of consumer choices between private label and branded? Do you see a path for consumers going back more heavily to branded? Yeah, as I mentioned, in the prepared remarks, we have seen pricing of private label increasing. To put specific numbers on it, the last 12 weeks, private label increased 2.5 share points, but in the last four weeks, it's been flat. As we put these promotions in place, which has gotten our price points lower, and as we've seen private label prices increasing, we've seen that the price gaps narrow, and we've seen that shift back to, you know, a more stable position between brand and private label in the category. Okay. Then if I can just sneak one more in. Given this dynamic environment, right, which you say that you've never seen or that it's at least more dynamic than in the past, a lot of elasticity. Are your conversations with the retailers different in the past? Are the retailers looking at the category in any way more differently than they had in the past? I think what we're looking at with the retailers is making sure that we get the price points correct, right? What happened at foil, when you see a category that declined, you know, 15% in a quarter, that's historically something we've never seen, a double-digit decline in the category. Our discussions with them has been about how do we get the price points right in this inflationary environment. Reynolds Wrap 75-Foot pre-pandemic traded below $4 on a unit basis, the 75-Square-Foot flagship product. As we've taken pricing to compensate for very high cost aluminum that went up to almost $2 a pound, the price points went above $5. We're now promoting well below that, looking to get below $5 and into the mid fours as we get into Q4. That'll be driven by, you know, the investments we'll be able to make with lower aluminum costs as we go through that inventory. You know, we'll do that on a sequential basis to ensure that we also have the opportunity to ensure our margins stay strong. Got it. Thank you very much. Our next question comes from Andrea Teixeira with JP Morgan. Please proceed with your question. Thank you. Good morning. Lance, I wanted to go back to your comments on private label. Has your mix moved back to that portion of the business and your private label pricing has improved to your point about, you know, pricing moving up? Do you see that as, you know, as an improvement on a sequential basis for your margin? A follow-up on the cooking and baking, given the moderating, I believe you said moderating consumption decline, in the quarter. Do you have a sense that obviously inventory levels in retail build up? If you see that, what is baked into your guidance into the fourth quarter? You did say, you know, October, you're gonna be pushing more pricing and promo. Anything you can inform us also in terms of pantry restocking, if you see folks especially at Costco, where you have a big presentation there, or big pack, if things have improved sequentially. Thank you so much. Well, there's three questions in there, and I wanna make sure I understood the first one, which was about private label shift. You speaking about foil, or are you looking at all of our categories? And are you asking about, are we margining up our private label? I didn't quite understand what you wanted the question about the private label. Yes, sorry. Let me parse out. I think if you could focus on foil and trash bags. I guess those are the most important ones, if you can. Because I did see the commentary about Presto not performing that well. I guess probably what you're seeing is that the store brands have taken a little bit of share at that point, as you mentioned. Just to check on the price gap commentary that you gave just before. On foil, yes, we did see a shift to private label in the second quarter, as we had pricing that was significantly moving faster up than private label. You know, I quoted the last 12 weeks was up 2.5 points in private label share versus us. In the last four, it's flat. As we put the promotions in place and you know, got below the $5 price points in and across, you know, all of our sizes, we have been able to at this point see that flattening and no longer shifting to private label. In waste bags, it's actually the other direction. If you look at the last 12 weeks, branded share in waste bags has improved one point, and in the last four, it's 0.4. There's not been a shift in the waste bags to private label in our current outlook. In the current history, I should say. Does that get to your question on private label shifts? Yeah, Lance. The one thing on the private label share that you mentioned on aluminum foil, did you capture that? Because you obviously produce around 40% of your sales are in private label. Did that shift more favorable to you, or it's mostly your competitors? I see. Okay. In foil, that is one of the categories that we don't have a very strong position in private label. We are, you know, we've got some capacity constraints, and we have chosen to really focus on the brand in that particular category. So no, we did not pick that up. Okay. That's fair. Then on the cooking, baking inventory levels, both at retail and pantry, I know you had prepared us that this was an issue back in the first quarter. Just wondering how that evolved into the second, as you exited the quarter, into the third quarter. Yeah. Well, we continue to monitor our retailers' inventories through direct access to a number of inventory tracking tools. We did see the retail deload of foil and other products as we'd anticipated in Q2. For the last two months, we've been shipping in line with consumer demand. We do know that retailers are, of course, continuing to evaluate their own inventory levels and, you know, we're watching that closely. Right. When you say you're shipping according to demand, the demand is still down. Yes, it's moderated, as I mentioned, to 4%, right? It's significantly different than it was in Q2. Mm. We have factored that. That's fair. All right. I'll be super. Our next question is from Mark Astrachan with Stifel. Please proceed with your question. Yeah, thanks, good morning, everyone. I wanna maybe come at some of the previous questions in a slightly different way. Back to your commentary about achieving pre-pandemic profit levels next year. I guess maybe to think about it, how should we model or review the retention of pricing, if inputs come down either in line with expectations or more? You know, relative to what you all have said from a historical standpoint, you know, which I think was maybe just under 40% retention of pricing, if you go back, I think it was 2018, 2019. How does that play out going forward? Sort of related to that, you know, if I'm doing the math right, for your guidance, pricing still has to pretty meaningfully accelerate on a two-year basis over the balance of the year. How does that factor in, and could price elasticity, which is worsening, get worse even than expectations? Thank you. Well, I'll answer the first part of the question, and I'll let Michael, you know, explain a little bit more about 2023 and our outlook for 2023. We have historically been able to maintain and improve our margins and keep pricing as commodity costs go down, and we believe that we will be able to do that in 2023 and in Q4. In total, when you look at the price increases that we've taken over a two-year period of time, it's almost $1 billion. There's a lot of opportunity to be able to margin up within that $1 billion and at the same time invest in our categories to maximize promotions and advertising. Mike, you wanna talk about 2023? Yeah, specifically around the gross profit. We anticipate achieving pre-pandemic levels of profitability in 2023. We estimate this to be around the mid-$900 million when adjusting to our current volume levels compared to pre-pandemic gross profit, about $880 million. We expect closing the gap between pricing and cost increases, and as I discussed in reviewing the guide, to be a major catalyst. In addition, as Lance mentioned, the cumulative level of our price increases is pretty significant. Together with our category leadership positions and easing of commodity costs, we expect this will allow us to increase category investment while also gaining additional margin. Okay. Got it. Just one other follow-up on that last point or one of those pieces in that last point, Michael. You said volume is still being off, or I guess the 2023 comments are contingent on volume still being up versus pre-pandemic levels. You know, I guess, are you all surprised at the volume degradation that we've seen in 2022 and if, you know, kind of the world continues to normalize, how do you think about the likelihood that you retain those incremental volumes? Yeah. We've done some extensive studies with an IRI consumption forecast regression model to look at the effect of this volume, how much of it is impacted by pricing, and how much of it is impacted by reopening. In most of the categories, it's 60% elasticity and 40% reopening. In foil, it's 76% elasticity and only 24% reopening. We believe that there's been a fundamental shift in the pandemic in the use of our categories that we get the pricing right on elasticity, that volume will continue to be above pre-pandemic levels. Got it. Okay, thank you. Our next question comes from Bill Chappell with Truist Securities. Please proceed with your question. Thanks. Good morning. Morning. Hey, I'm sorry to keep kinda hammering on the same issue on foil, but I mean, on that last kind of comment of 76% of the business is elasticity or of the issue is elasticity. I mean, do you. It's hard to kind of buy into that number. I mean, I just trying to think fundamentally about the foil category. There's not really a substitute for the category. I mean, if prices are high and you're still cooking or using foil, you still need to use or cook foil, and it doesn't seem like all of your business has gone to private label. I'm just trying to understand how that, you know, how that works or how you haven't had demand destruction. I guess the question is, do you think you've, you know, made a mistake of pricing too far too fast versus just kind of riding out a short-term rise in aluminum costs? Well, on the second part of the question, you know, aluminum more than doubled during 2022. It went up to over $2 a pound. So if you did the math on that, the earnings destruction by not taking our price up would have been significant, like $75 million. We had really no choice but to follow that pricing up. You know, it's just an unfortunate consequence of the commodity drive up that we had to do that from a pricing standpoint. What gives us confidence is both the last four weeks as well as back in 2018 when we crossed a price point when aluminum spiked at that point and went above another price point. When we got it back lower, we got the demand back. We do know from our research that consumers are not leaving the category. They are stretching out their purchase cycle by deloading and having less use occasions. In some cases, they're buying the lower pack sizes, and in some cases, the more affluent consumers are buying larger pack sizes. The conditions, you know, vary by consumer. They're not leaving the category. To your point, you know, we've done a lot of study on that. It's not. There's not a real substitute there. Getting the price points back will get the purchase frequencies back more normalized. Okay. I guess on that same, I don't fully understand why private label has taken so long to price. I mean, you would assume they have worse purchasing power of aluminum than you do and would wanna maintain their price gaps and margins as much as they could. Any color as to why they've taken so long? Been a weak point for you? That is a question we have asked ourselves over the last year, and it remains a mystery to us. I don't have an answer to that question. I can only speculate that we believe that some retailers were coming off of each other on their store brands, and they ate some margin waiting for the others to move. That was part of the equation. The other part of the equation may have been the amount of lower cost aluminum that they had in inventory during the run-up, so they felt that the producers felt like they could wait before they took the price in. We have got no confirmation, though, that anybody's hedging, so that is not a scenario that we believe could have impacted the timing for the private label producers. Okay, great. I'll turn it over. Thanks. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Jason English with Goldman Sachs. Please proceed with your question. Hey, folks. Thanks for slotting me in. I got three kinda rapid fire questions, I guess. Thank you for the mid-900s number on gross profit. I think we're all gonna step back, say mid-900s gross profit, put $350 million or so on SG&A, $110 million as D&A, and walk away saying that you're expecting somewhere in the low 700s from an EBITDA perspective. Is that meaningfully off base? The SG&A number is a bit low because we'll have more advertising than that, so I'd say closer to four. Okay, that's helpful. In terms of the fourth quarter, you put a sales range out there that's really wide. You put a volume number, at least the comments suggest that you've got a pretty tight expectation on volume. I think you said sort of flat to down slightly, yet total sales +9% to 17% suggesting you see at least probably a 500 basis points range on price, which is sort of unusual. You know, usually price, you got better visibility and volume's where the uncertainty lies. What's going on there? What drives the exceptionally wide range? Yeah. The overall revenue range takes into consideration of potential volume fluctuation. The indicated volume guide is the midpoint of the expected volume performance. In order to hit the 17% revenue growth, volume will need to be up. On the flip side, if we do a 9%, volume will need to be down. Okay, that's helpful. In terms of volume, if I do a three-year CAGR on Q2, which is effectively like what if I do it versus 2019, your volume's down 6%, versus 2019. The whole notion that you're, like, gonna be able to have profit off a higher volume base, I mean this quarter certainly calls it into question. Is there something unique sort of timing wise that would why this quarter is not reflective of sort of a round trip back to not only pre-COVID, but actually below pre-COVID levels? No, I don't see that. The 6%, I haven't done the math on that, so we're gonna have to go back and look at. It's down 50 basis points, right? Well, 2Q 2020, you were up 3% on volume. 2Q 2021, you're up 1%. Now you're down quite a bit. Like, you compound those, and it's not positive, it's a negative number. Sounds like we can follow up offline. We'll do some math. Yeah. Good stuff. All right, I'll pass it on. Thank you. Our next question comes from Peter Grom with UBS. Please proceed with your question. Hey, good morning, everyone. I hope you're doing well. I guess I wanted to follow up on Jason's question in terms of the 2023 guidance. I mean, Lance, you mentioned kind of the flexibility the pricing actions will provide looking out to 2023. You mentioned promotion, decreased ad spend. I guess, you know, how do you really think about the P&L from here? Because it seems like you're if you just assume $400 million in SG&A, you're flowing through a lot of upside to earnings growth of if you take in the $950 million of gross profit or so. Is that the right way to think about it, that you're kind of really expecting, you know, potentially north of 20% EPS growth looking out the next year? Yeah. I think you're in the ballpark there. Okay, that's helpful. Then I guess I just wanted to follow up on Lauren's question regarding the gap between price and cost pressures and thinking through the 3Q earnings guidance. I mean, can you maybe just break out more specifically what you're expecting in terms of gross margin versus higher SG&A that would drive EPS and Adjusted EBITDA to be down strong double digits? I know you mentioned higher incentive comp and ad spend, but just any commentary specifically around those two items would be really helpful. Yeah. You know, I think the reference is that, you know, overall our SG&A is gonna be up. Okay. All right. Thank you. With the primary driver of that just being overall compensation. Yeah. Okay. Thank you so much. Ladies and gentlemen, we have reached the end of the question and answer session, and I would now like to turn the call back over to Lance Mitchell for closing remarks. Thank you, everybody, for your questions. We appreciate your time this morning. Our business is well positioned for any economic environment, and we anticipate earnings growth in the fourth quarter. I wanna thank our employees and our retail partners for their dedication and their contributions during these challenging and dynamic times. Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.