CHD
#Yes, you're right in that there is some pipeline fill, obviously, any time we're going to be entering new markets.
But it still ---+ we still do have same-store significant growth overseas.
So I wouldn't throw a bucket of water on that.
That thing is a [rocket] here.
It's going to continue to grow.
As far as price goes, we actually did get some price in the second quarter.
So we have done some selective pricing around the international business.
If you go back to the release, you'll see that.
And I wouldn't expect, like you say, for Batiste suddenly to plateau.
On the other hand, we expect that to continue to grow in 2016 and 2017.
No, I would say we're watching this current ---+ yet again brand-new news of several weeks ago as impacting the category, but I fully believe pods will be here to stay.
The industry is taking actions to deal with these issues and we fully expect to be a full-time player in the category.
And again we're safe from any legal issues right now with the liquid pods situation because we are not in liquid pods.
But we have plans in place to build our business going forward and I just don't want for competitive reasons get into what those details are.
Yes, I would tell you, yes.
We have flattened out in the last year or two but that was a pretty ---+ a lot of our competitors went backwards.
So actually we have absorbed a lot of hits out there from a time period of higher commodities and foreign exchange, everything else going on.
So while our performance and flat, that's actually been better than competitors.
And I do believe we can get up to a 50 gross margin in this business, it'll be a combination of launching new products with higher margin, continued productivity gains and acquisitions.
And it is our goal to get up to that point time and I'm not going to give you the timeframe we believe in that.
But I do believe that is very doable.
Are you kidding.
It's a very active marketplace out there.
We are incredibly actively engaged in that marketplace.
But as you know, we are very picky and that begin pickiness has paid off huge dividends in the past in terms of the accretive value that we drive through acquisitions.
So I assure you that I'm probably spending major part of my time going out and looking for the right acquisitions right now.
And again, nothing big has happened so far.
We picked up some wonderful small acquisitions that have been nicely accretive to our women's health business to our SPD business and that.
So I can just guarantee you we continue to be hot and heavy looking for the right deals out there.
And when they happen, you'll be the first to know.
With respect to the full year, <UNK>, you know that it's always pluses and minuses that go into any of our forecasts.
So when we scorecard the rest of the year, all the things that you cited are on the page.
So the answer is yes, we obviously always forecast in leaving ourselves some flexibility to react to market conditions.
As far as your observation about XTRA, your assertion is what.
That XTRA is declining.
So our 13-week data would say that XTRA is flat.
It is true that it had been on the downswing over many quarter basis but we've corrected that.
We put a lot of promotion behind XTRA this year in order to deal with some of the competitor actions.
So we expected that's going to be stabilized and it's going to return to growth.
Yes, <UNK>.
This is <UNK>.
I would say are we pleased where we are.
No.
We want to be higher.
We are very pleased with the progress.
We had a big 20% gain and consumption in the second quarter so we got good momentum behind the business right now and we feel good.
But we want to continue to grow the business.
It's a great product, there's great performance out there.
We're very, very happy with the progress we've made in the beginning of this year.
So we're in the right direction.
And I would say within the cusp where Purcell is, OXICLEAN is performing very well versus the majority of the Purcell SKUs.
In fact the majority of the Purcell SKUs don't deserve to be expanded.
And so, we're not that fearful of Purcell at this point in time.
Something else that might be helpful to you is that OXICLEAN's share is 1.2% in laundry but where we have distribution, we are over a [2%] share.
So remember, we're still trying to get trial and distribution 2015.
Thanks, <UNK>.
Yes, well, you've got to appreciate ---+ this is a ---+ we have not been in the upper end of laundry.
That was our entry in 2014.
So we priced this product 20% below Tide.
So now we're up against Tide and Gain and more recently Purcell comes in.
So it's a crowded area and this crowd is not going to roll over and play dead.
So it does require a significant amount of promotion and advertising in order to get trial.
So as <UNK> said, yes, we are okay where we are but as far as how are you going to hold shelf long-term, the significant ---+ you've got to be below 2% ---+ above 2% share and we're at 1.2% today, we are 2%, we are in distribution.
We've got to get over 2% to hold share long term and then grow from there.
You know, <UNK>, keep in mind this is a laundry detergent is a $6 billion category.
So 2% share is very meaningful revenue results and we are, again as <UNK> said, where we have good distribution we are over that already and were building distribution in other places.
So it's a challenge.
We believe it is very doable.
We have the plans in place, we have new product launches coming to support that and we will achieve that in my mind.
And again, if we had created and launched the <UNK> <UNK> brand and we were spending all this money, I would say it was big mistake.
But we spent all the money behind the OXICLEAN brand very smartly from a marketing standpoint and that's why we continue to do well on the original OXICLEAN additive brand is doing very well on the marketplace, benefiting from all the advertising we are spending on the laundry detergent version of it, so ---+.
And also the bleach version, we didn't even mention today, the launch in the bleach last year of the OXICLEAN brand has done extremely well.
So very incremental to the business.
Again, this is why we believe in megabrands.
Because when you spend behind a megabrand and expand it to a new category, you get a lot of benefit on the prior parts of the brand that are out there from the Halo to the advertising bag.
So we're very much going to continue the strong support behind Oxy laundry detergent and we believe that will benefit the whole OXICLEAN megabrand.
Hey, <UNK>, it's <UNK>.
Let's talk about it from the total Company perspective first.
So in Q2 on a stack bar basis, a year ago we were at 3% and we're 5.1% so that's an 8%.
If you do the same thing for Q3, it's around a 7%.
And if you peel that back and you take the specialty product business out and the international timing out and you just look at the domestic business, the stack bar for Q2 is around 5.5%, and for Q3 it's a 6%.
So we think it's actually a pretty decent quarter when you look at it like that.
That is quite an open-ended broad question because you're assuming that these are what the issues are.
Our issues are simply that in our Vancouver plant we had some equipment that went down and that was just one of those things.
Now so, we had to repair the equipment in our existing plant.
In our new plant the startup was expected to be completed in March.
This is very sophisticated equipment, it has to ---+ it won't work in a synchronized fashion and once you get it rolling, it rolls.
And it's producing now the way we want it to produce.
But it's taken us three or four months to get there.
I would say, <UNK>, too, we've had some customers command to see our new facility in York and they've been blown away by the sophistication of it and its potential.
So again we did the right thing building a real state-of-the-art spaceship type plant that will produce ---+ increase our capacity by 75% and it was just a little bit more difficult than we estimated.
We are very aggressive and we had a very aggressive timeline and it was a little more difficult than we estimated to get this state-of-the-art facility going.
But we are very impressed by its potential.
Our customers who have been able to look at it are blown away by its potential and it's just we've had the short-term hiccup and we'll get it behind us but it's been fixed.
That's right, that's good.
Yes.
It's a decent question, <UNK>.
You've got to remember most of the categories we play in, in these countries, we're relatively small players.
So we don't have the pricing power to really take FX impacts.
So the 2% is largely Brazil where there is currency impacts, and I would say the whole country price is up.
But in general, no, we don't think we can price up all the way to cover currency.
Right but I would say plus 2% is a reasonable number.
Yes, the (inaudible) personal care category ---+ they've actually performed better over time than some of the household categories and household again was dragged down by the laundry category which was a big part of it.
And we've had good results.
Our shares have been strong in those categories.
There have been some pricing competition in things like pregnancy kits which has caused a bit of a war out there.
But no, we've got a lot of new products in those categories and we are very happy with those products in that.
And if I had one wish in life, I'd wish I get the Trojan category growing.
The condom category has been relatively flat now for quite some time but we're working on some major new product launches in that category and some great new marketing programs to help to get that going forward.
Because that's the case with a 76.4% share, it's really incumbent upon us to drive the category more than share grows.
But we have some plans in place over the next two years, which I find very promising, to rejuvenate that category and get it growing again.
One more question, guys, and then we're going ---+ we have to get off to back to building this business.
Yes, John, on the vitamins side we would not have built a plant with 75% volume upside if we didn't think we would use it.
We're just not in a position right now for reasons to expand upon that how we plan to get there and when.
So good question but sort of like laundry [compacts], we're not going to answer it.
And then on the gross margin side, I'll turn it over to <UNK> and <UNK>.
Yes, with respect to SG&A, you're right.
We've had a lot of SG&A leverage over the past few years.
But part of our long-term model is, we tried to grow [to] our operating margins 50 basis points annually.
And the way you're going to get that is the lion's share of it from gross margin will be 25 to 35 basis points and the rest is going to come from SG&A.
And as we saw this quarter, if you hold SG&A dollars flat you're going to get leverage.
You have 15 basis points of leverage in the quarter.
So, yes, you have to be vigilant about how you manage SG&A.
We're not going to get the 50 or 60 basis points a year from that line item.
Acquisitions obviously can help because you know our acquisition model is essentially we buy marketing contribution which is gross profit minus marketing.
So that gives you instant leverage on your SG&A.
And that has been part of our story historically.
So there's lots of leverage to go in there.
I hope that's helpful to you.
Thank you all ---+ good, thank you.
I'd like to thank you all for tuning in today.
Another great quarter from Church & Dwight.
A great first half of the year despite the problems we had on vitamins and a lot of great things coming in the future.
So thank you all for your great questions and give any more questions, give <UNK> or <UNK> or me a call and we'll do our best to answer them.
So thanks, everyone.
