CLX
#Good morning, everyone
I'm glad to be back in IR and I certainly look forward to working with all of you in the future
But before we jump into results, let's remind you of a few things
We're broadcasting this call over the Internet and a replay of the call will be available for seven days at our website, thecloroxcompany
com
On today's call, we will refer to certain non-GAAP financial measures, including but not limited to free cash flow, EBIT margin, debt to EBITDA and economic profit
Management believes that providing insights on these measures enable investors to better understand and analyze our ongoing results of operations
Reconciliations with the most directly comparable financial measures determined in accordance with GAAP can be found in today's press release, this webcast's prepared remarks, or supplemental information available on our website as well as in our SEC filings
In particular, it may be helpful to refer to tables located at the end of today's earnings release
Please also recognize that today's discussion contains forward-looking statements
Actual results or outcomes could differ materially from management's expectations and plans
Please review our most recent 10-K filing with the SEC and our other SEC filings for a description of important factors that could cause results or outcomes to differ materially from management's expectations and plans
The company undertakes no obligation to publicly update or revise any forward-looking statements
With that, I'll cover results
For the total company, fourth quarter volume and sales grew 3%, with sales growing all across all segments
Our sales in the track channels remain healthy
We continue to see particularly strong growth in non-track channels including growth in e-Commerce, Home Hardware and Club
Turning to results by segment; in Cleaning, Q4 volume grew 4% and sales increased 2%
Cleaning segment topline was driven by Home Care behind record quarterly shipments of Clorox disinfecting wipes, early successes of new Scentiva wipes and sprays, as well as broad-based strength across the Clorox equity portfolio
We are especially pleased with the growth of our wipes business this quarter, given we have fully lapped last year's distribution gain in the Club channel
Overall, Home Care delivered a third consecutive year of very strong market share growth, hitting 20% on a 52-week basis, its highest share in six years
Our Professional Products business volume increased, although sales were flat following double-digit sales growth in the year ago quarter
Volume gains were broad-based with contributions from a number of recent innovations in the surface disinfecting space
Lastly, within our Cleaning segment, laundry sales and volume declined, primarily due to category softness
Positively, however, we continue to grow our premium Clorox Splash-less Bleach resulting in share gains on total Clorox liquid bleach
Turning to Household segment; fourth quarter volume increased 5% and sales grew 4%, reflecting strong topline growth in Renew Life, Cat Litter and Glad
Starting with Cat Litter; sales grew double-digits behind innovation and strong merchandising support
This also was the third consecutive quarter of market share growth for litter supported by our prior launch of Fresh Step with Febreze
Our Glad bags and wraps business saw solid topline growth behind ongoing success from our premium OdorShield trash bags, particularly in the Club channel, which more than offset the decline on our base business
Although overall track channel market share for Glad was down in the quarter, we continue to see – we continue to gain share consistent with our strategy in the higher-margin premium trash bag segment and our OdorShield trash bag delivered all-time record volume in fiscal year 2017. In addition, we continue to see strong growth in non-track channels, including Club, Home Hardware, and notably, e-Commerce
Fourth quarter non-trackable shipments were flat, in line with our expectations
We continue to feel good about our plans for this business going forward and the category is on track
Finally, we remain excited about Renew Life
Our distribution expansion plans remain on track with gains in the Food/Drug/Mass channel and behind dual placement strategies at key accounts as well as very strong growth in e-Commerce
We will continue to focus on expanding distribution in fiscal year 2018. And we've begun supporting this business with a new national marketing campaign
Turning to Lifestyle; volume declined 1% and sales grew 2%
Burt's Bees delivered solid topline growth this quarter on top of double-digit topline growth in the year ago quarter
The business also drove share gains behind incremental distribution and merchandising activities in lip care
We have a strong innovation lineup for fiscal year 2018 with some of these items already on shelve
In our Food business, volume declined slightly due to lower shipments of KC Masterpiece barbecue sauces
That said, consumption and shares in our key segments remain healthy and we are especially pleased that our Hidden Valley equity delivered a tenth consecutive quarter of share growth
To wrap up the Lifestyle segment, Brita sales were flat in Q4 as gains from innovation behind our Stream pitcher were offset primarily by strong competitive activities and a strategic choice to rationalize a lower margin part of our portfolio
Finally, turning to International, volume and sales were up in Q4 despite more than 3 points of FX headwinds, and slower category growth in countries like Argentina and Peru due to macroeconomic trends
We continue to take pricing to offset unfavorable foreign exchange as part of our larger effort to improve margin
Now I'll turn it over to Steve, to provide more details on our fiscal 2017 performance as well as outlook for fiscal year 2018.
I think we have one more question after this
Thank you
