Good day, ladies and gentlemen, and welcome to The Clorox Company Fourth Quarter and Fiscal Year 2020 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. At the conclusion of our prepared remarks, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded.

I would now like to introduce your host for today's call, Ms. Lisah Burhan, Vice President of Investor Relations for The Clorox Company. Ms. Burhan, you may begin your conference..

Thanks, Hillary. Welcome everyone and thank you for joining us today. We hope you and your family are safe and well. On the call with me today are Benno Dorer, our Chair and CEO; Kevin Jacobsen, our CFO; and Linda Rendle, our President and CEO-Elect.

Before we go through our Q4 and full year results, I'd like to turn it over to Benno to say a few words about the leadership changes announced today.

Benno?.

Thank you, Lisa, and hello everyone. You've likely seen this morning's announcement about my decision to step down from my role as CEO. With our current President, Linda Rendle, being named my successor, effective September 14. I will continue to serve as Executive Chair of the Board.

It has been my great privilege to carry forward the legacy of generations of strong Clorox leaders in my pursuit of Good Growth. Growth that is profitable, sustainable and responsible.

The idea of Good Growth was created based on the very strong belief, that companies can deliver great results the right way, and that's serving employees, communities and the planet as a whole is as important as serving shareholders, and that's how we generate profit matters.

I am proud that as a company, we have always been strategy led and committed to our values, both of which have guided us successfully in making the right choices on behalf of our shareholders and all of our stakeholders.

After 15 terrific years at the company, I am particularly grateful for my teams of 8,800 strong, and especially for the current executive team. I have great confidence in them.

I also want to thank the Board of Directors for their support of a guy who ventured out of a small town in the German Black forest, 35 years ago to pursue a dream that let me to places and allowed me to do things I could not have possibly imagined.

My thanks also go out to everyone in the investment community around the world for your support, helpful perspective and of course, your candor, which I look forward to momentarily. I appreciate all of you, and I particularly appreciate the wonderful friendships that I've been able to make along the way.

On September 14, I could not be more pleased to hand over the reins to Linda and I look forward to supporting her and her team. I've worked with Linda for 13 of her 17 years with the company.

She is an exceptional leader, with an outstanding track record, the right leader for this great company and I cannot wait for all of you to be able to see what she can do. Linda is joining us today and will participate in Q&A and also say a few words towards the end of the call. Thank you. It's been an honor and a privilege.

And with that, I'll turn it back over to Lisah..

Thanks, Benno. I've really enjoyed working with you since I started at Clorox on the Glad business more than 15 years ago. And I look forward to working closely with Linda as well. A few reminders before we go into results.

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. Today's discussion contains forward-looking statements, including statements related to the expected or potential impact of COVID-19.

These statements are based on management's current expectation, but may differ from actual results or outcomes. In addition, we may refer to certain non-GAAP financial measures.

Please refer to the forward-looking statements section, which identify various factors that could affect such forward-looking statements and the non-GAAP financial information section, including the tables that reconcile non-GAAP financial measures to the most directly comparable GAAP measures, both of which are located at the end of today's earnings release, which has also been posted on our website and filed with the SEC.

Turning to today's discussion of our results. I'll start by covering our top line commentary as usual, with highlights in each of our segments. Kevin will then address our financial results as well as outlook for the fiscal year 2021. Finally Benno will offer his perspective and we'll close with Q&A.

For the total company, Q4 sales increased 22%, reflecting double-digit growth in all four reportable segments. Full year sales were up 8%. I'll now go through our results by segment.

As you may have seen in our press release, we have made some changes to our reportable segments with a newly formed Health and Wellness segment replacing our Cleaning segment, and the realignment of several business units. In our health and -- Health and Wellness segment, Q4 sales were up 33% for the quarter and full year sales grew 14%.

Cleaning which merges Home Care and Laundry is our largest business unit in the company representing about 30% of total company sales in FY '20. The business had another quarter of double-digit sales growth behind continued elevated demand across the portfolio.

While we've been able to add significant capacity, demand still far exceeds supply, leading to continued out of stocks for many products. This coupled with our focus on assortment simplification to increase output and our prioritization of Healthcare facilities is impacting our market share and distribution points especially in tracked channels.

We expect to improve our share of assortment over time as we expand production. On a full year basis Cleaning sales also grew by double-digits behind a very strong back half performance.

Our data continues to show that the majority of sales increased we've seen since March has been from new users, leading to an unprecedented growth in household penetration for the Clorox brand. We're excited to continue to drive our categories and maintain momentum by increasing our investments in brand building and innovation.

However, our most urgent priority remains to continue aggressively expanding our production capacity to meet consumer demand, which we anticipate will remain elevated for some time.

These investments support our IGNITE Strategy to strengthen our core and continue to leverage the Health and Wellness megatrend at a time when our brands are more relevant than ever.

Our Professional products business, making up about 7% of total company sales in FY '20, also has double-digit sales growth for -- in Q4, supported by strong shipments across all of our disinfecting platforms. Full year sales also grew by double-digits, fueled by an exceptional performance in the back half.

As a reminder, the main source of revenue for our professional products comes from providing commercial cleaning and disinfecting solutions to both the health care and janitorial channels.

Our broad range of solutions include platform such as the Clorox Total 360 system, which uses an electrostatic technology to deliver disinfectants to large hard-to-reach areas as well as Clorox germicidal bleach, Clorox hydrogen peroxide disinfecting cleaners and Clorox disinfecting wipes.

We believe our brands has broader reach beyond the channels we're in today, and that this business will continue to have significant growth opportunities.

We're proud that our products can help support public health and we're excited about the recent strategic partnerships we've established with Uber Technologies, United Airlines, AMC Theaters and Cleveland Clinic.

Lastly, within the Health and Wellness segment, our Vitamins, Minerals and Supplements business combined RenewLife and Nutranext representing about 4% of the total company sales in FY 20. Sales in our VMS business decreased by double-digits this quarter. There were two main drivers for the decline.

First, our Neutranext brands continue to experience a supply disruption related to COVID-19 in a third-party fulfillment center that prevented us from meeting what has been a healthy demand. We're currently transitioning to a new provider and expect the situation to be fully resolved in the fall.

Second, Renewlife based ongoing category and competitive challenges. Looking forward, our full brand relaunch remains on track for FY '21, and we're continuing to work on partnering with retailers to reinvigorate the category. Full year sales for the VMS business also declined double-digits due to similar drivers as in Q4.

Turning to the Household segment. Q4 sales were up 17%, reflecting growth across all three businesses, and full year sales grew 1%. Glad sales were up by double-digits in Q4, behind strong demands for our products as consumers continue to stay at home.

We're also pleased to see share growth in our Glad trash bag segment, driven mainly by strong innovation. We launched a new experiential Glad ForceFlex Trash Bags featuring unique fragrances and colors in Q3 and early reception has been positive.

For the full year, Glad sales grew slightly, reflecting sequential improvement throughout the year, ending with a very strong Q4. We're focused on building on this momentum and investing further behind our differentiated platform with more innovation plan for FY '21.

Grilling sales grew by double-digits in Q4, fueled by strong consumption both due to increased grilling occasion among existing users as well as new users entering the category. We're also pleased to see share and household penetration growth this quarter, supported by our new Kingsford strategy.

Collaboration with our retail partners has been strong and growth this quarter was broad based. Our Q4 performance was especially notable, because it was delivered without aggressive holiday price discounting during the peak Grilling season.

The Kingsford pellet innovation continues to build distribution and share, and we're excited to lean in further to invest in long-term profitable category growth. For the full year, we saw solid sales growth as our efforts to turnaround the business started to bear fruit and consumption increased strongly in the back half.

Cat Litter sales grew in Q4, driven by innovation and strong online shipments, partially offset by lower consumption in traditional channels following consumer pantry loading that we saw last quarter.

For the full year, Litter sales grew behind strong back half performance, partially offset by a more challenging, front half performance as we lap the initial pipeline shipments of Fresh Step Clean Paws.

Clean Paws continue to perform very well, with strong growth in its third year after launch and we'll keep investing in this innovation platform in FY '21. We're also encouraged by the strong start of Fresh Step gain original scented litter with the a power for Breeze, which just launched in June.

In our Lifestyle segment, sales grew 16% and full year sales grew 10%. Brita sales were up by double-digits in Q4, behind continued elevated consumption of our water filtration systems and filters. This unprecedented level of demand started in Q3 and continued in Q4, resulting in out-of-stocks that impacted our share this quarter.

Full year sales also grew by double-digits, reflecting healthy momentum in the first half and heightened consumption in the back half. We're encouraged by the fact that the majority of its recent sales have come from new household, just like what we see -- what we've been seeing in many of our other categories.

Our priorities going forward will be to increase supply. Convert these new users to loyal consumers and continue to support our brand with a focus message around Brita's value proposition during this recession.

The Food business saw a double-digit sales growth in Q4, mainly behind very strong consumption of Hidden Valley Ranch bottle dressing benefiting from more at-home eating occasions. The brand grew share for the 22nd consecutive quarter and increased household penetration.

Full year sales increased behind solid growth in the first half and elevated consumption in the back half. We'll continue to invest to drive brand awareness and trial behind our innovation and capitalize on this momentum as consumers are eating at home over an extended period of time, especially during the recession.

Burt's Bees sales were down by double-digits this quarter, as the overall category consumption was negatively impacted by ongoing store closures and stay-at-home measures. Regardless of the decline in Q4, this business had solid sales growth for the full year, reflecting strong growth behind innovation and enhanced leadership in lip balm.

In Lip Care, Burt's Bees grew share for the 22nd consecutive quarter and widened its market leadership status as the number one overall lip balm in the US. While we expect the category wide challenges to persist in the short-term, consumer preferences for natural products and more specifically Burt's Bees remain unchanged.

And we're confident in the brand's long-term growth trajectory. Our FY '21 plan includes a robust innovation line up, including a new squeezy lip color lines that launched in July and CBD personal care products launching in the fall. Lastly, turning to International.

Q4 sales grew 12%, mainly driven by continued elevated demand for our cleaning and disinfecting products as well as essential household products. Sales were also impacted by unfavorable foreign currency headwinds of about 12%, partially offset by the benefits of pricing that was implemented before the onset of the pandemic.

For the full year, sales were up 5%, reflecting about 10 points of unfavorable foreign currency exchange rates. Additionally, it's worth noting that profit for International was down this quarter due to costs associated with the product we call improved [ph].

Like other businesses, where there has been increases in household penetration during this period, we'll be focused on converting those new households into loyal consumers.

We're also continuing to explore international opportunities and today announced the acquisition of a majority stake in our long-standing joint venture in the Kingdom of Saudi Arabia. In its long 50-year history, this business has offered consumers in the Gulf region, a range of cleaning and disinfecting products.

During that time, they have shown not only steady growth, but also strong profitability. Consistent with our IGNITE Strategy goal, this acquisition will help drive long-term profitable growth in our international segment.

Now, I'll turn it over to Kevin, who will discuss our Q4 and full year financial performance for FY '20 as well as our outlook for FY '21..

Thank you, Lisah. And thank you everyone for joining us today. We hope you and your families are well. I'm proud of a very strong performance in Q4 and our overall results for fiscal year '20.

As we continue to navigate the global pandemic, our team has been unwavering in our efforts to maximize supply disinfectants and other essential products needed by Healthcare workers, consumers and our communities. In the fourth quarter, COVID-19 continued to have a significant impact on our results.

In addition to double-digit sales growth in all four of our reportable segments, we delivered our seventh consecutive quarter of gross margin expansion and another quarter of strong cash flow, all of which contributed to strong fiscal year '20 performance.

As you saw in our press release, we are providing a financial outlook today, because, despite the increased challenge of anticipating how the full year will play out, we believe that in this period of heightened uncertainty, it's important to provide investors with as much transparency and perspective as possible.

That said, we anticipate a higher level of variability than what you might normally expect, as the results will be heavily influenced by the depth and the duration of the ongoing health crisis. I'll comment more on our outlook shortly. Turning to our fourth quarter results.

Fourth quarter sales were up 22%, driven by 21 points of volume growth and 3 points of favorable price mix, partially offset by 2 points of FX headwinds. Gross margin for the quarter, increased 170 basis points to 46.8% compared to 45.1% for the year ago quarter.

Fourth quarter gross margin included the benefits of higher volume as well as 170 basis points from cost savings, and 120 basis points from favorable mix.

These factors were partially offset by higher manufacturing and logistics cost which included temporary spending related to increasing our production capacity and expediting transportation of our products.

Fourth quarter gross margin also reflected ongoing cost favorability in commodities, more than offset by the impact from foreign currency headwinds. Selling and administrative expenses as a percentage of sales came in at 14.1% compared to 13.3% in the year ago quarter.

This higher rate primarily reflects increased year-over-year incentive compensation, consistent with our pay-for-performance philosophy. Advertising and sales promotion investment levels as a percentage of sales came in at about 11%, about 0.5 point higher than the year ago quarter.

We're spending for our US retail business coming in at about 12% of sales for the second consecutive quarter.

For additional perspective, we invested $70 million more in the back half of fiscal year '20, compared to the same period in fiscal year '19, reflecting aggressive investments consistent with our ambition to accelerate long-term profitable growth.

Our fourth quarter effective tax rate was about 22% compared to about 17% in the year ago quarter, due to lapping tax benefits in the year ago period. Net of all these factors, we delivered diluted net earnings per share of $2.41 versus $1.88 in the year ago quarter, an increase of 28%.

Commenting briefly on our fiscal year results, I'm pleased with the progress we made in our core business prior to the impact of COVID-19, plus our teams dedication to respond to unprecedented demand resulting in very strong results for fiscal year '20. We delivered sales growth of 8% and on our organic basis grew sales 10%.

Gross margin expansion of 170 basis points versus fiscal year '19, supported by strong volume growth and another year of robust cost savings. These factors enabled us to close out the overall fiscal year delivering diluted EPS of $7.36, an increase of 16%.

As you saw in our press release, fiscal year '20 net cash provided by operations was $1.5 billion versus $992 million in fiscal year '19, an increase of 56%. Our accelerating cash flow and strong balance sheet, give us the flexibility to continue investing behind long-term growth opportunities. Now I'll provide more perspective on our outlook.

Starting with our key assumptions for fiscal year '21.

First, we expect the impact of COVID-19 to be with us for the bulk of fiscal year '21 resulting in our expectation for ongoing elevated global demand for our Cleaning and Disinfecting products, particularly through the first half of our fiscal year, Next, we expect the US and many parts of the world to face an ongoing recession that will reduce consumers' disposable spending and increase the importance of providing superior consumer value.

And we plan to aggressively invest behind the momentum we're seeing in our global portfolio, including increasing production capacity to address ongoing elevated demand for our products. Our outlook also assumes minimal disruption through extended supply chain over the course of the fiscal year.

And finally, we are assuming about a 40% devaluation of the Argentine peso which is materially less than the potential devaluation if the currency moves to the country's parallel rate. For our fiscal year sales outlook.

We expect fiscal year sales to be flat to up low-single-digits, reflecting our expectation for continued elevated demand for the first half of the fiscal year and a deceleration in the back half as we lap the initial spike in demand from COVID-19.

As you saw in our press release, we have acquired a majority stake in our Saudi Arabia joint venture, which we anticipate will contribute about 1 point of growth to our fiscal year '21 sales. We expect this to be offset by about 1 point of foreign exchange headwinds primarily in Argentina.

On an organic sales basis, our outlook assumes flat to low single-digit growth. For additional perspective on our fiscal year sales expectations, we anticipate strong growth in the front half of the fiscal year, including double-digit increases in Q1, although decelerating from the 19% sales growth we delivered in the back half of fiscal year 20.

In the back half of fiscal year 21, while we expect strong performance relative to our pre-pandemic sales levels, we expect sales to decline as we lapped the initial impact from COVID-19 in the year ago period.

We expect fiscal year selling and administrative expenses to come in at about 14% of sales as we continue to invest aggressively in long-term growth initiatives.

Additionally, we are increasing investments in our brands to address this unprecedented demand for our products from existing and new consumers with plans to increase advertising spending to about 11% of sales, to build loyalty with many new consumers entering our categories for the first time, in addition to continuing to deliver superior consumer value, which is more critical than ever as we navigate the global recession.

As I mentioned, we will continue to invest in expanding our production capacity to address our expectation for ongoing elevated demand for our products and support new longer term growth opportunities.

In the near term, we will continue to expand our use of third-party manufacturers to increase our production capacity, while this comes at a higher cost we believe is an important action to take while our internal expansion efforts come online.

We expect our fiscal year tax rate to be in the range of 22% to 23%, closer to our long-term tax rate assumption. Net of these factors, we expect fiscal year '21 diluted EPS to be down mid-single-digits to up mid-single-digits.

Our fiscal year diluted EPS outlook includes an estimated contribution of $0.45 to $0.53 from our increased stake in our Saudi Arabia joint venture, primarily driven by a one-time non-cash gain associated with a fair market value adjustment to our previously held stake in the joint venture.

This one-time gain is projected to be recognized in Q1 and on a full year basis offset by our expectations for a high tax rate and foreign currency headwinds for the company.

Before I turn it over to Benno, I'd like to reiterate how proud I am of the Clorox team for delivering strong performance in fiscal year '20 and the role we're playing to help fight this global pandemic.

Our Disinfecting products continue to support public health and other essential products continue to make a difference in the day-to-day lives of people as they spend more time at home. Consumer interest in our categories has never been higher. And a robust fiscal year sales results, provide a strong foundation for ongoing momentum.

We certainly plan to build on that by aggressively investing in our IGNITE Strategy to drive long-term shareholder value. And finally, I also want to say how much I've enjoyed working with Benno over the years. I'm also looking forward to Clorox' next chapter with Linda, who will be a strong CEO for the company.

And with that, I'll turn it over to Benno..

trust, vision, growth, products, culture, ethics and citizenship. Now and in the future Clorox will remain focused on Good Growth. Growth that's profitable, responsible and sustainable. And with that let me turn it over to Linda..

Thanks, Benno. And hello to everyone on the call today. First, let me start off by saying just how excited I am to be Clorox' next CEO. After 17 years with the company, what makes me most proud about taking the reins from Benno is that Clorox is truly a special company.

We have iconic brands people love and a wonderful values-led team that takes to heart our role in making people's lives better. Second, I'm optimistic about the company's future and look forward to working with the executive team to accelerate growth. This is a pivotal time for the company and there is no better time to be CEO at Clorox.

What's become even clearer during this pandemic is that we're a Health and Wellness company at heart.

Whether through our disinfecting products that support public health, our Vitamins, Minerals and Supplements that enhance wellness, or other essential products that people count on for their families and homes, I firmly believe that our global portfolio of trusted brands is in a strong position to address the shifting consumer mindsets and behaviors related to health and wellbeing.

What's also clear is that we have a big opportunity to build on our momentum from fiscal year '20 for long-term value creation. And we're investing behind this momentum to support our ambition to accelerate profitable growth in fiscal year '21 and beyond.

And finally before we begin Q&A, I want to take the opportunity to thank Benno for his just terrific leadership as CEO. Under Benno's guidance, Clorox more than doubled total shareholder return by putting innovation front and center, recognizing it's critical role in differentiating our products and brands to deliver superior consumer value.

By investing in digital consumer engagement as a means to interact with people on their terms and through more personal experiences, and by taking ESG to the next level, challenging each of us to demonstrate its value to our business and society. Benno talked earlier about our commitment to Good Growth.

Growth, that's profitable, responsible and sustainable. What he didn't say is that he was the one who introduced this. It captures most simply what we're all about. Profitable growth achieved the right way for our consumers, our shareholders and society. I've been very fortunate to work closely with Benno over the years.

He has been a great mentor, and I look forward to continuing to partner with him to drive the business when I step into my role as CEO. Operator, you may now open it up for questions..

[Operator Instructions] Your first question does come from the line of Andrea Teixeira of JP Morgan..

All right. Thank you. And Linda congratulations on your promotion and Benno, thank you for the great leadership all these years and significant time from your business agenda. So with all investment community over the years. So it's good to see at Clorox [ph], that you likely have more time to dedicate to strategic topics way forward.

So I wanted to -- if you can talk about a bit with those agreements and you or Linda with the 10 new production partners on board and also the partnership with the Cleveland Clinic and the business partners like Uber, United and AMC Theaters. So I was hoping you've seen size this opportunity.

I understand it's now about 7% of your sales, but I remember being like just about 6% in the prior fiscal year. So if you can give us kind of idea how you can continue to outpace this growth. And if we -- with this debottlenecking capacity? And how we could be thinking of the B2B against the B2C going forward, that will be great.

Thank you again, and congrats to both..

Thanks, Andrea. I'll get us started here. So as Benno mentioned earlier, we're very serious about the role that we play in public health. And as we look at our cleaning and disinfecting portfolio, we see opportunity broadly in the US and International across several spaces and I'll outline high level what those are.

The first is continuing to delight people with products in the retail space. We know that we are not able to meet the demands and that is priority number one is getting much supply as we possibly can into the retail space to ensure that consumers have products they need during this time.

The same is true in our traditional professional business, which you highlighted is about 7% of sales in fiscal year '20 and has been a high single-digit grower for us over a number of years. So working on supply in both of those.

With the opportunity that you highlighted is one that we're aggressively pursuing and that is the merger of those two areas. As people re-enter public life, they are looking to be reassured that the spaces they enter are clean and disinfected.

And what they would be reassured by as a trusted brands like the brand Clorox, is to ensure that that space is clean. They have that reassurance in their mind. And we're helping businesses do is welcome people back, whether that would be their employees or their guests and by using and partnering with Clorox's protocols and brands.

They can offer their guests that reassurance that the space is safe. That's how we're thinking about that broader what we're calling out of home opportunity. We staffed a dedicated team to go after these partnerships and have resulted in things like you highlighted with United Airlines, Cleveland Clinic, AMC Theaters and Uber Technologies.

What will be really important for us moving forward though is getting supply. So these are in initial stages of agreements, and what we're looking for is increase supply before we continue to expand the test markets that we have today, but we're seeing very good consumer and business response in the initial days.

And if you think about our B2C and B2B in total, I think the thing for us to consider is those lines will continue to blur as we move forward, and that's what we are really well suited to do with all of our technologies and capabilities..

No, that's great. And can you also like the capacity growth, I think you exit the last quarter with growing like 20%.

I see debottleneck your capacity, how you're tracking now as you exit the quarter?.

Yes. Our plan is on pace to increase supply versus what we committed in Q4, but what Benno highlighted is the key, the demand that we're seeing is significantly higher than we had expected in Q4, and we expect that demand to remain elevated as we head into fiscal year '21.

Our increase that we were able to deliver on supply did support strong double-digit growth in our Cleaning businesses. But to be clear, we're not satisfied with our service levels right now, and we have the absolute highest urgency to improve.

Some of the things we're pleased to see though and will give us confidence as we move into the fiscal year '21 is that our state -- our supply chain remains very stable. So we have had very few COVID related disruptions. We were able to bring on more than 10 new suppliers.

The majority of those in disinfecting to help us to support the increase in demand. We had anticipated that some businesses would begin to recover quicker, and we have seen that in the case of bleach where in stock levels at retail are looking much stronger than they had been, despite the fact that we've been prioritizing Healthcare.

And the key message for takeaway is we are aggressively investing to expand capacity. We are working across the entire supply chain all the way back into raw materials, up through manufacturing, packaging and conversion. And we expect sequential improvement in fiscal year '21 in meeting that increase in demand..

That's great. Thank you again, and best of luck. I'll pass it on..

Our next question comes from the line of Wendy Nicholson of Citi..

Hi. Congratulations to both of you, and Benno we will miss you. My question had to do with advertising.

I'm a little bit surprised that you're increasing or you're targeting right now sort of 100 basis point increase for fiscal '21, number one, because I assume as your revenues to those partners grow that's actually revenue that you don't need to spend advertising behind. And I know that's kind of a rounding your probably in the great scheme of things.

But still that's a big increase. It would be the highest level of ad spending that we've seen in a long time for you. And it's coming at a time where you are having a hard time meeting demand. So I would buy Clorox Life, whether I saw an ad or not.

So can you talk a little bit more about the decision to increase ad spending by that magnitude, maybe which businesses you're targeting it to, and whether this is a new level going forward that we should expect or is there something specific in 2021 that that's driving that increase? Thanks..

Yes. Thank you, Wendy. What you should takeaway is that this is an aggressive investment that is into the momentum that we have in the business. It also signals confidence in our strategy. And of course, as always with our company that's done with an eye on the long- term.

For us advertising sales promotion is not a quarterly expense, it's a long-term investment in the health of our brands. And while 10% continues to be the level long-term that we're comfortable with, we see a particular opportunity at this time to invest in this pivotal opportunity that we have for our company to accelerate growth.

It will go into demand building across all businesses both in the core as well as in innovation. I mentioned earlier, we have a very strong innovation program, in spite of the supply challenges right now, that we have great confidence and we have so much opportunity ahead. So we feel like this is the right thing to.

It is an investment in the long-term health of the business. And, if you look at the fundamental business drivers of our business; as I mentioned them in Q4 with rising market shares, with household penetration growing or stable in north of 90% of our US portfolio.

With market shares growing in International, with further opportunity to build out our International business to serve more consumers in the face of the pandemic. With consumer value perception being at its all-time high with well north of 50% of our portfolio being seen as superior.

All those things are particularly strong indicators of future business momentum.

So, against all of that and in particular also with the looming recession, which we think is going to be significant and is perhaps underestimated or somewhat overlooked at this time, in particular here in the US, we think this is simply the right thing to do, and it's certainly part of our recession playbook that we've successfully apply once before about 11 years ago.

So, we have great confidence in this choice as part of a long-term growth strategy for our company..

And specifically, just first half versus second half. so to those comments, specifically, if the economic environment really deteriorates is there a scenario where you would say, wow, these marketing dollars would be better spent in price rollbacks or promotional spending.

How much of the ad spending itself are you expecting first half versus second half or kind of no difference?.

Typically we don't provide quarterly outlook. But it can certainly vary by quarter depending on, for instance, the timing of innovation launches. So you should expect that variation. Based on what we know today, even though you can never say never, right, in this business.

But I cannot see us touch advertising sales promotion because like I said, it's not a tactical expense. It's an investment in long-term growth. So we will remain committed to spending the dollars.

And frankly, if the recession gets worse, that's even more of a reason for us to spend in advertising sales promotion, in particular at this time, when people are looking at trusted brands to meet their needs. And as you know, we have many of those trusted brands that people rely on in particular doing a recession..

Got it. Thank you so much. And again, best of luck..

Our next question comes from Nik Modi of RBC Capital Markets..

Yes. Good afternoon, everyone. Benno kudos to you for a remarkable career, and Linda congrats on your appointment. The question I had was on capacity.

And I guess Clorox, like most CPG companies is in a really tough spot in terms of how do you make a decision on long-term capacity decisions, when the category growth profile two years out is very uncertain.

So I guess, I'm just asking, like how you guys at Clorox with all of your analytics are thinking about longer term category growth and how that's feeding into your decisions on capacity? I'm not just talking about disinfecting, because obviously that's going to remain elevated for a long time, but I'm also talking about charcoal and Hidden Valley Ranch and it's clearly at home food consumption is also elevated at the moment and may continue in the future? Thanks..

Hi, Nik. Thanks for the question. So you're right, we're at a time where it is not a precise science right now to predict what the future is going to whole given what we're facing, but we are putting our analytics hard at work to understand what we think that future will look like.

And if you take cleaning and disinfecting for example, we do strongly believe the category will remain elevated for the mid to long-term future and we're building capacity to address that.

But how we're taking the approach on this one is to make sure that we build the right mid to long-term that allows us to have flexibility, and whether we in-house or we use co-packers for that production.

So right now, as we've said we've added 10 new suppliers to help us with this incremental production and over time, if it's appropriate, we can insource that production, which helps us balance quality and cost, and also gets us to the right ratio from an efficiency perspective.

So I feel really confident about our ability to do that and we're making choices that allow us to pivot depending on where this all shakes out..

And Linda, if I could just follow-up on that. How long do you think it will take for Clorox to catch up with your expected level of demand over the next -- over fiscal '21.

I mean is it going to take three quarters to get to where you want to be, or is it two quarters or any perspective around that?.

Yes. For a good portion of our businesses, Kingsford, Brita, Glad, Nutranext, for example, we feel like will be normalized by the end of the calendar, where we have a really good supply and demand match. From cleaning and disinfecting perspective, we do expect this to continue to be a ramp-up over the entire fiscal year.

And we'll see sequential improvement throughout the fiscal year, but given the fact that cold and flu sits in the middle of the year, and then we expect the pandemic to be with us for the entirety of the year. It will take the full year to get up to the supply levels that we need to be at..

Great. That was very helpful. And good luck to the both of you..

Thanks, Nik..

Our next question comes from Kevin Grundy of Jefferies..

Thanks. And Benno and Linda, I want to extend my congratulations to the both of you as well. My question is -- pulls together a couple of elements from Wendy and Nik's question. But tying it into the longer term outlook for the company.

So beyond fiscal '21 and really looking beyond, so the current outlook is for 2% to 4% of core sales growth, but as you look at that target the low to mid-point certainly seems to be inadequate given a lot of the dynamics that we've spoken about, increased structural demand in some of these categories, particularly around Cleanliness and Health and Wellness.

You're clearly investing a lot of capacity as Wendy rightly pointed out, the advertising and marketing we're tracking this correctly. We haven't seen any sort of levels as a percent of sales since fiscal 2003 for the company. So there is an awful lot of investment, both OpEx and CapEx going into the business.

So it does certainly seems and certainly what's reflecting the stock right now is nothing in the 2% to 3% kind of range.

So with all of that being said, when will the company be prepared to provide an update to investors or to the extent you can comment today, what are you thinking as part of your planning around capacity, around other investments in the P&L. So any commentary there would be helpful? Thank you..

Hey Kevin, it's Kevin. And I can take that question. And you're right. Look, we have a -- an outlook right now as part of our IGNITE which is 2% to 4% growth. But what I think you're hearing from myself, Linda and Benno today, it is clear, our aspiration is to accelerate the profitable growth of this company. And we are leaning in.

We have millions of new consumers coming into our categories. We have new growth opportunities, particularly out of home and we are leaning into these opportunities with the intent to accelerate the performance of the company. It is too early for us to raise our long-term goals. Remember, these goals go out over five years.

So it's -- I would say it's in the early innings of the work we're doing. But that certainly is our intention. And at some point, we'll come back to the investor community and update you on our expectations, but I'd say a little too early for that right now.

But trust, what you're hearing from us is our intent to accelerate performance and we're leaning in to do that..

Okay, fair enough. Thanks, Kevin. I'll pass it on..

Thanks, Kevin..

Our next question comes from Olivia Tong of Bank of America..

Thank you. Good afternoon and congrats Linda and Benno. It's been a pleasure. All the best to you guys. And Benno in your next endeavors with you. Wanted to talk a little bit about the performance of your categories in recession, because obviously you're leaning into quite a bit of spending.

And if you could provide a bit more specificity on your expectations by segment. Because, you're looking for -- obviously a pretty rapid deceleration against the COVID backdrop.

And you talked about new customers without losing the old, the potential to further expand your professional partnerships which seems obviously pretty meaningful in this environment. And you seem more amenable to potential international expansion to with the Saudi JV and obviously there's innovation.

So on top of that still catching up to demand, so if you could just talk through how drastic maybe the last recession was in some of your categories or what you had to do in terms of promotional advertising to help us understand the outlook a little bit better. That would be super helpful. Thank you..

I'll start and then Kevin can build on that. So typically what we see in a recession, if you take the last recession. You see about a 0.2 growth in our categories lower than what you'd see in an average year.

And then if you double click, there is a number of categories in a normal recession and again right now you have the pandemic, of course, as an additional impact. But you have a number of categories that actually see stronger sales doing a recession.

And intuitively that makes sense to see businesses like Kingsford, as people grill more at-home, Brita as people use less bottled water and move to filtered water for it's much superior value, Hidden Valley for more at-home eating occasions, those categories have historically performed very well. And we'd expect to continue that.

So there will be puts and takes, and again the difficulty of course, for this outlook is in the volatility created by recession, but also the pandemic as an outlook. And of course, fiscal year '21 back half that will lapse some pretty formidable numbers.

But what's been part of the recipe last time in 2008 - '09 was to really focus on investing into the consumer, play offense as we call it, which is our intention now. The playbook includes innovation and we have a strong innovation portfolio in fiscal year '21.

And the playbook includes to emphasize consumer value and of course, we're going into this recession with a lot of momentum being seen as superior value on so many of our brands at this point. So we have a strong recession playbook.

Our portfolio typically has been recession-resilient, and importantly, we have a very experienced team where nine out of 10 BU General Managers have been with the business at the time of the last recession and a very experienced Senior Management team knowing how to handle this.

So we feel like we have an established playbook, and we will certainly continue to invest in the long-term health of the business and the elevated advertising sales promotion spend is certainly part of that. Kevin, any additional thoughts from you..

Hey, Olivia. Maybe just a couple other thoughts as it relates to the recession and how we managed through the last recession about 11 years ago. So as Benno said, our belief is, and what we've seen as our categories tend to be fairly resilient.

If you look at our business performance in the last recession, I believe 8 of our 10 business units grew sales over that period. So not only have the categories been resilient, but our brands have also been resilient during that period of time.

And what I'd also have you note is, you always have to think about what drove the recession back in '08-'09, that was a financial crisis. This is a healthcare crisis. So it's very different. We have much more engaged consumers in our categories than we did back in '08 and '09.

In addition to that, if you look at our CVM, we're at an all-time high with about 59% of our portfolio identified as superior relative to competition. And we've got the highest household penetration either stable or growing that we had in the history of the company.

So you never look forward to recession, but I can tell you having been through three at Clorox, this is the strongest our portfolio has been going into a recession.

And then, the only other item I'd offer is what may be different about this recession is, the government as obviously stepped in and this is the most support we've ever seen for consumers during this recession right now in terms of unemployment benefits. We'll have to see how that plays out.

But if you assume that government is going to continue to actively support consumers through this process that will certainly help us as well. And so we'll see how that plays out. But I feel pretty good about the overall health of our portfolio heading into this recession..

Thanks. That's helpful. And then Linda, you're obviously taking over arguably with a lot of growth priorities today versus history.

So I'm wondering if you could talk more about how you're prioritizing them relative to one another? I'm sure, obviously the first order business is increasing the capacity for Cleaning and Disinfecting, but there is e-commerce stepping up support for professional, obviously driving the rest of the business as well.

So how are you thinking about allocating those investment dollars that you're planning for next year? And then with that JV acquisition, does that in any way signal how open you are to M&A in support of some of the initiatives? Thanks..

Thanks. Yes, you hit it on the head. The absolute number one priority is executing with excellence this year and increasing supply to meet the demand. We will be focused on delivering the plan that we put in place, which we have passion and conviction around. The business fundamentals are strong across categories.

But we must do better on supply to meet demand. Second, IGNITE for us is the right strategy. I was the Lead Architect of that, got to lead our team in creating that and what it has done for us over these last many months as helped us lead through really troubling and volatile times.

And what that strategy commits us to us putting people at the center of everything we do, knowing consumers and the people we serve in communities better than anyone, innovating great experiences for them with our products, and that's what we're going to continue to lean into.

And we have a team of 8,800 people and an executive team that's passionate and own that strategy, and want to accelerate it. And that gets me to my third point. Where we place investment is in those IGNITE areas that we have passion and conviction around.

We're going to lean into our global portfolio, and given the strength of it across the board, we will do what we always do is, we'll follow the money and where we think the best long-term value creation opportunities exist. Cleaning is certainly one of those areas and we've talked a lot about the opportunities we have there around the globe.

And then last, what I'll leave you with is, we're committed to how we work. This pandemic has allowed us to re-imagine work quicker than we had ever imagined. Moving our people to work from home, keeping our essential workers healthy and our manufacturing running at full speed.

But now what we imagine work will turn to is playing offense 100% of the time. That will be our focus.

We use technology to do that to make quick decisions and pivot to put investment where we'll get the highest long-term return, but we feel really confident about those choices and we've managed a number of categories and brands for years and we always feel like we are able to put the investment where it's best suited and we'll do that again this year.

And then NASA is a continued focus actually on the core, excuse me, Saudi Arabia is a continued focus on the core. We've been in that business for 50 years, and a joint venture with a family-owned business. It is core to our Cleaning business where we serve many countries in the Gulf region.

And we have tremendous confidence in the ability for that business to continue strong growth in the future. It's core to Health and Wellness. We know that consumer has high demand for those products today. We saw double-digit growth in our Saudi Arabia business in fiscal year '20, and it's margin accretive to the company.

So to us this isn't a right churn, but this is just a focus on what we talked about in International, which is accelerating profitable growth and leaning into areas that are stable and that we can ensure have long-term growth run rate for us..

Thanks very much. All the best..

Our next question is from Jonathan Feeney of Consumer Edge..

Thanks very much for the question. And let me add my congratulations to both Benno and Linda. Thank you. I wanted to follow-up on -- last quarter you gave us some very, very helpful breakdowns of household penetration versus retail. I guess two questions in there.

First, can you tell us -- can you give us any more update about how much of your growth this quarter in Cleaning particularly has been household -- new households, new claim behaviors? And now to worry about -- I don't know, a few months into this and you have some new users.

Any additional [indiscernible] give us about repeat -- particularly among new users, new cleaning behavior, people buy more wipes. Are those people coming back to the store for a second, third and at what rate? Thank you..

Yes. Thanks, Jonathan. Double-digit growth in Q4 in all four segments, and certainly seeing elevated consumer demand across the majority of our categories.

Consumer fundamentals as we've noted and as you picked up on are very strong and certainly fueled by the incremental $70 million that we put in in advertising sales promotion in the back half of last fiscal year.

But I would say in the vast majority of categories, if you double-click on the consumer behavior, leading to such strong growth, it's very, very strong. What we're seeing is more usage occasions in many categories caused by the pandemic, of course, but also by people staying at home.

And we're seeing household penetration increases in most of our categories, and that's really been the major growth driver here. And then we're also seeing, which is very encouraging a higher purchase frequency in several categories indicating that it's more people using our product more than they ever have.

We see very, very little stock-up, the exception maybe is, Burt's Bees, where store closings and lower food traffic and beauty care, but also less usage in some categories like facial towel lets and color cosmetics, which makes sense as people stay home has led to a pressure on sales and litter, where we're seeing a category-wide trough from initial pantry loading, but more broadly this is all fundamentally healthy growth with higher household penetration and higher purchase frequencies.

I want to maybe point out Kingsford, as an example, beyond cleaning and disinfecting where it's quite obvious, I think that we are seeing particularly strong household penetration increases, but also strong increases in usage frequency.

Kingsford for the first time in a while is going household penetration again and all the fundamental underlying indicators in the category is very healthy. We are seeing people buy more Grills, and of course, that Grill purchase increase leads to more consumption of consumables like charcoal. We are seeing millenials come into the category.

A big reason why we've been able to grow household penetration is that millennials now come back into the category, so we're seeing incredibly strong growth even with a complete assets. John I don't know if that's you with we need a phone on mute. Thank you.

But we're seeing new people come in, we're seeing millennials enter the category and we're seeing them use the product often. So lot of positive underlying metrics behind our Q4 sales growth and we expect this to continue for sure mid-term..

Our next question comes from Lauren Lieberman of Barclays..

Thanks. Good morning and congratulations to both of you also. I wanted to talk a little bit about International. I know that the Saudi Arabia joint venture is something that Clorox has been very proud of for many years. But you mentioned -- Linda, I think you mentioned the word global.

There has been international few times and the company I think has for the last several years has been more about the go lean, get tight control cost and really focused on right models from where you were playing.

But to what degree does -- I guess, the current landscape, both in terms of consumer need and in terms of the strength of the Clorox brand and the sort of flexibility you presumably have on profitability, does that enhance your international growth aspirations? Maybe Linda if you were looking at IGNITE and setting the strategy today versus 12 months ago, do you think International would play a bigger role and if not, why not? Thanks..

Thanks, Lauren. So we absolutely have the opportunity to meet more consumer demand in the US and International. And we're moving quickly with supply chain investments to support expansion in both. What I want you to take away is, we don't see a fundamental change in the composition between the percent of our business in the US and International.

We see the ability to grow both strongly. But if you think about the International opportunity specifically, there are three things that we're focused on. The first is, we just need to increase supply to meet the demand that we have in the markets we're already in and the products that we already have in those locations.

And we're focused on that just like we are in the US. The second is, we absolutely have an opportunity to expand our product forms in countries we compete in today.

So for example, there are many places around the world where wipes have low penetration or we don't play and we see that as being an offering that consumers might be ready for in different areas of the world.

And then the third, we are evaluating expansion into new geographies and we certainly see very high interest from consumers in different parts of the world for the Clorox brand in particular.

And whether it's interest, we will look and see if there is long-term disciplined approach we can take to entering that market where we see strong return on investments. So that will be very consistent with how we've approached International to date. And that's what I would leave you with is, definite opportunity in International.

No change in terms of how we think about the role it will play in our overall portfolio. And we'll be aggressive in pursuing opportunities when we have confidence in them..

Thanks. And then, if I may just also a question on competition.

So I think you went -- you've all went through very clearly reasons why market share performance at least in tracked channels is what it is, and it may be not the best gauge of kind of what's materially going on in your business, both curious still how you were thinking about an increase in competitive dynamics, more players, more brands with really reasonable and strong brand equities, looking to play in some of your phases.

Historically, actually part of the hallmark of Clorox has been that sort of big share brands and in kind of midsized categories. Your categories aren't going to midsized anymore possibly with where we're talking today. So what do you do in the dynamics those categories change, the competitive landscape changes.

What -- how are you thinking about that?.

Thank you, Lauren. I mean look our competitors -- our categories, have always been very competitive. They are competitive and they will be competitive. There is no question. And we also can assume I think that reasonably assume that in the disinfecting space in particular, it's an attractive space.

Looking at the growth and the profitability and the ability to make a difference to so many consumers around the world we can expect that that will be more competitive. But for us that's our daily bread and has been our daily bread for very long time. And how do we go about that? We build leading brands.

And as we've commented a few times those brands generally are in a great shape. We invest behind them. We invest with an eye on the long-term. We keep the value sharp and we've also commented how that's in the best shape it's ever been, and we innovate, innovate, innovate.

So we're not waiting for competition to come in and we are certainly used to competition to try and come in and disinfecting and without sounding arrogant, a lot of times the competition came and went, and we will defend our home turf and importantly as Linda said earlier, we will play offense a 100% of the time.

So, we can assume that this business is going to continue to be very competitive. But we're ready for it and we certainly as you noted, are taking the stance and have the financial flexibility to invest in our business in order to ensure success with an aspiration of accelerating long-term growth for the company..

Okay. Thanks so much and congratulations, again..

Our next question is from Steve Powers of Deutsche Bank..

Thank you. And sincere congratulations from me as well Benno. And Linda obviously big congratulations you're way too.

I guess, I was hoping you could talk more about the biggest drivers underlying what I see is a fairly wide bottom line range for fiscal '21 relative to an arguably more narrow top line range and I guess I'm specifically interested in how you're thinking about gross margins.

I missed the demand volatility and supply constraints, recessionary pressures that you've alluded to as well as some of the competitive dynamics that Lauren just called out.

So is there a way to talk about gross margin as a driver of '21 guidance?.

Steve, this is Kevin. And I can talk about both our EPS range and gross margin. I'd say, to your point, our EPS range we're providing this year is wider than what we typically provide on a normal year end. And I'd say that that wider range is really driven by two areas that we expect to see increased variability in our results.

The first is the top line, and I think that's probably pretty obvious. The ongoing impact of COVID-19. The impact of the recession, how that will play out on our portfolio will clearly be difficult to predict over the course of the full year. I think we've got decent visibility as we look out over the very near term.

But as we get into the back half of the year and we're lapping the 20% organic growth from last year, more difficult for us to determine exactly where that will play out. And so there will be some level of variability from the top line.

I would say in addition to the top line variability, when you look at our supply chain, where I expect to see increased variability from previous years is specifically in manufacturing and logistics in terms of the impact we're seeing from COVID-19 and maybe to dimensionalize that, in our fourth quarter, we had about a $30 million of up charges we incurred in our supply chain related to COVID-19.

And now as I look forward into '21, we expect those to be temporary charges and we expect them to diminish over time. But a lot of that will be driven by how the pandemic plays out, which is clearly outside of our control. And so it's difficult to call exactly where our gross margin land.

And if you think about it $10 million change in profitability is worth about 1 point of EPS growth for this company.

And so it's not inconceivable that we could see $20 million or $30 million variability and the supply chain as it relates to the impact of COVID over the course of the year, that would generate 2 point to 3 point change in our EPS performance for the year.

And so I think when you look at the variability in the top line, you look at the variability on the COVID cause hitting our supply chain, that's the reason why we have a wider EPS range to start the year. Now as it relates to gross margin, I actually think gross margin be very much in line with where we land on EPS.

If we end up with negative EPS for the years because we had larger COVID cost and supply chain than we anticipated and likely declining gross margin. And conversely, if we generate EPS growth this year it will be driven by COVID cost doing better than we anticipated in growing margins for the year. And so that's how we're seeing right now.

It's obviously very early in the year, as we get smarter, we'll certainly update you as we learn more in terms of how we think it's going to land, but I think to start the year this feels like a prudent place to start with the range we said..

Yes, that's fair. Thank you for that.

I guess, kind of, while you're talking, is there a way you can put some numbers around your expectations for cash generation next year and also the uses of that cash, I'm particularly interested in CapEx, just given the manufacturing ramp that you've called out?.

Yes. So as it relates to cash and maybe specifically CapEx, with significant access of cash we're generating as a company. I think you saw in my prepared remarks, it's up about 56% for the full fiscal year, although I'd tell you in the back half year we had doubled the rate of cash we are generating over the last six months of fiscal year '20.

So the company is in very good financial position in terms of access to cash to allow us to invest in the business. And again what you're hearing from the three of us today is, we are doing just that, we're taking that cash and we're putting into the business with our intent to accelerate our performance over the long-term.

As it relates specific to CapEx, we are also investing in capacity expansion is the primary focus for us. Typically, as a company, our capital spending is somewhere between 3% and 4% of sales revenue each year. I'd say if you look back over the last few years, we've been closer to the low end of that range, a little over 3%.

We started investing in the fourth quarter. We invested about $100 million of additional capital in the fourth quarter and that put us just below 4% last year as a percent of sales.

As I look forward to '21, as we continue to invest in capacity expansion particularly in disinfecting, Steve, I think we'll end up somewhere between 4% and 4.5% as a percent of sales into capital spending and that puts us if you do the math, that gets us to about $300 million in CapEx spending for the year.

And I think that's probably a pretty good assumption for now to work with..

Makes sense. Congratulations again. Lisah -- I mean sorry Linda and Benno. Thank you..

Thanks, Steve..

Our next question is from Jason English of Goldman Sachs..

Hey. Good afternoon, folks. And I'll fill that last sentiment, congratulations Linda and Benno I wish you well and I'm going to miss your quarterly banter. So on to my questions. The guidance for a sequential deceleration, albeit it's still strong levels.

It is a little bit surprising context of what any of you guys say that your demand is massively outstripping your supply and your shipping pretty much -- you're selling everything you can and selling everything you could in the fourth quarter translated into 23% organic sales growth and nearly $2 billion of revenue.

Why couldn't you match that in the first quarter, if demand is so robust and so meaningfully outstripping supply?.

Yes. Jason, this is Kevin. I think your question is specifically really to Q1 and while we don't typically provide quarterly guidance, we thought it was helpful to provide some perspective front half, back half and what we said is, we do expect double-digit top line growth in Q1, to your point. We continue to see very strong demand for our products.

It is outstripping our ability to supply. In the near term, we expect that to continue and because of that, we do expect a very strong first quarter..

Okay. I'll try offline on that one later. On components of your growth, price was obviously a meaningful contributor to this quarter and I imagine promotions. I suspect a lot of that's trade spent with the promotional programs pulled out of the market, given supply-demand imbalance.

What is the cadence of that look like based on your expectations as we progress through the year.

Should we expect similar price contribution in the first quarter and waning over the quarter? Or could it moderate even faster?.

Yes. Jason there is -- there are clearly as you noted, there hasn't been a lot of price promotion in our categories for sure. It's part of what's encouraging for instance on Kingsford that we were able to grow double-digits without what is usually a pretty healthy price promotion during peak events or holidays like 4th of July and Memorial Day.

So that's all encouraging. But if you think about our trade spends, our trade spend, the vast majority of our trade spend is performance-driven, meaning it's tied to customer performance and the customer performance is there.

So there are -- there aren't a lot of savings in trade spend, because we're honoring the commitments and because for many of our customers the trade spend is rolled into everyday low pricing. And that's going to continue. So as you think about trade spend, there is not going to be a windfall over the next fiscal year.

It's been a little lower in Q4 as you will have noted. And that could continue. But it's also going to vary by quarter and trade spend is not going to be a big source of savings going forward..

Okay. Thank you very much. I'll pass it on..

And our final question comes from Linda Bolton-Weiser of D.A. Davidson..

Hi, thanks for taking my question. You made some comments about the general charcoal category and the growth there and what's driving it, but I was wondering if you could be more specific about your own share recovery that at least in the tracked channels it does look like your share is improving.

And was the hickory pellet launch important in share growth or is that just too small at this point? And when can we expect the next innovation in charcoal? Thanks..

Yes. Thanks, Linda and welcome back. That's a nice way to end it. I would characterize Kingsford as a good story in that we had implemented much improved plans, which led to a really strong retailer support and that came just in time as consumers were looking to Grill more in the face of pandemic.

So a really nice turnaround story with the second quarter -- consecutive quarter of growth, after certainly a weaker period and Q4 up double digits. Share was up strongly. It's one of our strongest growing businesses share-wise.

And if you look at the underlying factors, it is strong retailer support as mentioned, it's household penetration returning to growth. On the brand, it's a growing category, even without the aggressive peak holiday discounts, heavy Grill sales, all of it really encouraging. So the vast majority of the sales and share growth is just on the core.

And the good news is, there is so much opportunity left, given the performance in previous years, we are really just scratching the surface of what we can do to recover lost share growth, but also benefit from a category that clearly is on trend.

Pellets itself is off to a strong start, and also continues to build and will also keep building in the fiscal year '21 season. But really it has not been a strong factor in the grand scheme of things as we think about the sales growth. So really solid momentum on Kingsford as we enter fiscal year '21 with so much opportunity ahead..

Thank you and good luck..

Thanks, Linda..

Thanks, Linda and thanks to everybody. Thank you everyone again for joining us today. I hope that all of you and your families will stay healthy, and I also hope that our paths will cross again at some point after we get through this pandemic.

And in the meantime, please stay well and Linda, Kevin and Lisah will speak to you about Clorox's Q1 fiscal year '21 results on November 20 -- no, on November 2. Thank you, all..

Thank you. This concludes today's conference call. You may now disconnect..