Good morning and welcome to the Edgewell conference call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to the speakers. Please go ahead.

Good morning, everyone. This is Chris Gough, VP of Investor Relations. Thank you for joining us this morning as we discuss Edgewell's Third Quarter 2020 Earnings and the CREMO acquisition. With me this morning are Rod Little, our President and Chief Executive Officer; and Dan Sullivan, our Chief Financial Officer. Rod will kick off the call and he will hand it over to Dan to discuss our results, and we will then transition to Q&A. This call is being recorded and will be available for replay via our website, www.edgewell.com. In addition to the comments we're making on this call, we have posted several supplementary slides to our website that provide additional information on our quarterly results and the acquisition of CREMO. During the call, we may make statements about our expectations for future plans and performance. This might include future sales, earnings, advertising and promotional spending, product launches, savings and costs related to restructurings, changes to our working capital metrics, currency fluctuations, commodity costs, category value, future plans for return of capital to shareholders and more. Any such statements are forward-looking statements, which reflect our current views with respect to future events. These statements are based on assumptions and are subject to various risks and uncertainties, including those described under caption Risk Factors in our annual report on Form 10-K for the year-ended September 30, 2019, as may be amended in our quarterly reports on Form 10-Q. These risks may cause our actual results to be materially different from those expressed or implied by our forward-looking statements. We do not assume any obligation to update or revise any of these forward-looking statements to reflect new events or circumstances, except as required by law. During this call, we will refer to certain non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures are shown in our press release issued earlier today, which is available at the Investor Relations section of our website. Management believes these non-GAAP measures provide investors with valuable information on the underlying trends of our business. With that, I'd like to turn the call over to Rod.

Thanks, Chris, and hello, everyone. I hope everyone is doing well and staying safe and healthy as we work our way through this pandemic. Today, I'll begin my remarks by providing an update on the current environment and its impact on our results. I'll then discuss our third quarter performance and the progress we continue to make on our strategic initiatives before finishing with the announcement we made earlier this morning about our intent to acquire CREMO. Dan will then review our financial results in more detail, provide further details on the planned CREMO acquisition and share some thoughts on how we are approaching the final quarter of our fiscal year. Since we last spoke, the pandemic has spread across the globe with far-reaching impact in the categories in which we compete, and therefore on our business, as you saw in our results posted earlier this morning. COVID-19 had a considerable impact on our sales in our core categories in the quarter. The difficult conditions we saw in April worsened in the month of May with some moderation in June. Within this challenging environment, characterized by significant declines across all of our categories, I'm encouraged by many elements of our relative performance. In the U.S., we saw a strong market share gains in our Sun Care and preps businesses and stabilization in branded wet shave. And as the market leader in the category, Wet Ones saw another quarter of accelerated growth and market share gains. Internationally, we drove gains in our Wet Shave business in Japan, which is our second largest market as well as improving share performance in Europe. As we described a quarter ago, we remain focused during this challenging period on 3 key priorities: first, the health and safety of our colleagues; second, ensuring the continuity of…

Thank you, Rod, and good morning, everyone. As Rod discussed, within this highly uncertain environment, we continue to manage the business with discipline, focused equally on near-term efficiency while taking the right steps to position Edgewell for sustainable growth. As we navigate this challenging environment, we remain focused on our core priorities: first, execution, against our commercial and operational opportunities, both short and long term; second, strengthening the balance sheet, by ensuring a strong liquidity position with an emphasis on maximizing cash and reinforced by our successful high-yield refinancing and upsizing in the quarter; third, maximizing our brand-building investments, by optimizing our media mix and improving in-market execution to prioritize those investments with the potential to generate the highest returns; and fourth, executing on Project Fuel, where we delivered another quarter of meaningful growth savings. While the results for the quarter reflect the unique circumstances of this COVID-19 environment, we continue to make solid progress against each of these core priorities. Our top-line performance in the quarter was largely the result of COVID-related systemic category declines across most of our segments. We are cautiously optimistic that April and May will prove to be the most significantly impacted months of the fiscal year. And the sequential improvement we saw in June and into the start of Q4 offer us some confidence that the worst of the impact in fiscal 2020 maybe behind us. Organic net sales in April decreased 15%, followed by a 19% decline in May and an 11% decline in June. July trends have further improved with net sales running down in the mid-single-digits year-over-year. While we continue to see strong performance in both Wet Ones and Men's Grooming, the foreshadowed distribution losses in Wet Shave at Sam's Club and in Fem Care at Walmart, combined with the initial…

So, Chris, can you hear me? Yeah, everybody, it sounds like we've lost Dan. I'm going to pick up where he left off and then close out before we go to Q&A. So where Dan was going as well, the heightened level of uncertainty in today's environment likely suggests a wider range of potential outcomes than normal. This trend is a reasonable proxy for the organic top-line run rate for the quarter. And additionally, while we expect to continue to see headwinds in gross margin associated with COVID-related costs and negative category mix, we also anticipate tailwinds from further fuel savings, favorable commodity costs and lower promotional intensity. Importantly, in the quarter, we will also continue to invest behind our key strategic priorities to ensure that we are creating and solidifying our platform to support sustainable growth. In summary, we are operating in this business with great discipline, tightly managing expenses and capital, strengthening liquidity as we continue to generate savings from our Project Fuel work in making strategic and thoughtful reinvestments in growth, both organically and inorganically. So with that, I'll go ahead and close this out. So I think you can tell from everything that we're talking about here, we have been working tirelessly to reposition the Edgewell business. We've stabilized the underlying top-line and gross margin profiles. And we've been improving our execution on-shelf. And while the headwinds associated with COVID-19 significantly impacted our reported results in the quarter, our underlying progress has continued, and it starts with the commitment to discipline and execution across the organization, something that we've increasingly focused on over the last year, and is seen not only in our continued fuel results, but also in our seamless operational performance during this COVID environment and our efforts to strengthen our balance sheet. Our…

Thank you. [Operator Instructions] Thank you for holding. We will now proceed with the Q&A session. Our first question comes from Bill Chappell, SunTrust Securities. You may proceed.

Thanks, good morning. Can you hear me?

Yeah, hey, Bill. Good morning.

Sorry, it seems like a couple of the technical difficulties, just checking in. Hey, Rod, I guess, on Wet Shave, and I understand that you're going to unveil broader plans for the strategy in a few months. But I mean, can you just help us understand how CREMO kind of fits in? Is this the last piece of multiple acquisitions to kind of fortify the business? Do you need to do more? Are there other more organic plans expected? Or - I'm just trying to understand maybe a little bit of a preview of what you're expecting for Wet Shave kind of long-term strategy?

Yeah, thanks, Bill. And apologies to you and others on the line with the technical difficulties. I was concerned for a moment that Dan wasn't going to be able to rejoin and I was going to have to like go back to my CFO chair days, which is maybe a more difficult position on calls like this, but I think we're all back on and good now. But we're confident that Wet Shave in particular, and then broader grooming, so the Skin Care regimen and that whole category is still a great place to play and a good place to be in business. We are seeing, and I think Procter alluded to this as well, we had not only some stock up in quarter 2 that negatively impacted this quarter in Wet Shave, but you can see it when you around or see in the Zoom calls, there's less shaving happening right now. I think we're confident based on everything we see, studies we've done that this is a temporary situation in terms of shave incidents declining during the work-from-home in more restricted environment. We think that the category will return to normal, which normal would be a flattish to maybe slightly positive. Sales line for blades and razors in that Wet Shave definition with continued very fast growth across the balance of the grooming segments that are more around men's skin care, beard care, preps, moisturizers, any perspirant deodorant. There's a lot of growth in those grooming categories as more and more men use more products in their daily regimens. So you balance that out. We think the growth across broader grooming, inclusive in blades and razors, returns to normal, has growth in it and structurally from a structural profitability and economic standpoint is highly valuable. And we think we've got the right capabilities to win. And so, this is an acquisition into that area around grooming. And we like our portfolio that we have and think it's differentiated to hit all the key consumer segments. The leaky bucket we've had in blades and razors, primarily in the men's category, which I'm not happy with our performance and where that business has been, we're addressing. And we're addressing it with urgency around building brands that better resonate with the consumers, having new innovation coming that's going to be a lot more interesting, and ultimately, building better retailer relationships and having better outcome at the shelf in terms of our placement and positioning. So the strategy is going to be focused on doing all of those things. And again, CREMO is a key piece to expose us to the fastest-growing part of the grooming segment.

Okay. And then, Dan, if you're on the call, just a follow-up on Sun Care and how it kind of works through the P&L, I'm just trying to understand, did the June quarter - I mean, do you have excess inventory that now sits through next year? Did you accrue for returns that will happen this quarter? And just kind of understand if there's any lingering impact for the weak Sun Care season and how that carries over into 2021?

Sure, absolutely, and good morning, everyone, and again, apologies for the technical difficulties. No, look, Sun Care is always a difficult category to model and trying to get sort of the peak consumption period right, which we know the sell-in we have lags that. So, there's always a difficulty in the model, obviously, made harder by COVID. But we feel really good about our inventory position. We feel really good about sort of the state of the product at trade. We don't anticipate heightened returns, risk or accruals. We've been monitoring this obviously quite closely over the course of the last 6 to 8 weeks, in particular, and we'll continue to do so. So, no, we don't anticipate Q4 or looking into 2021 with heightened risk. We've taken the appropriate provisions.

Great. Thank you. Yes, go ahead.

Yes, Bill, if I could add to that. Not only do we feel good about where we are in the season here in terms of financial exposure and how we're operating with retailers and retail trade, very simplistically, what happened in Sun Care this year is we lost the first part of the season by and large. Spring break didn't happen like it normally does. That Easter period, which is a heavy beach vacation season, didn't happen. And then by and large, Memorial Day, didn't happen like it normally did. And so, you saw the category very depressed through that early to mid-June period. As we got into later June, and then into July, and now the beginning of August, we've actually seen the category recover from being down in some weeks as much as 60% at the beginning of the season to even having growth in some more of the recent weeks that we've seen. And so I think we're ending the season in a way where a lot of the inventory that was placed in is now moving and turning, in fact, ahead a year ago in some cases. And so, not only do we feel like we're ending the season in a clean way, we're quite optimistic as we look forward to next year as we figure out how to move around and be outside safely that will return to not only more of a normal sun season, but we Edgewell and our brands enter that in a real position of strength with our performance this year and the share growth as we work with retailers and partner on the sets for next year.

That's great. Thank you for the color.

Operator, next question, please?

Our next question comes from Kevin Grundy, Jefferies. You may proceed.

Hey, good morning, everyone. Thanks for taking the question. So I wanted to start off with the decision not to formally reinstitute guidance this year and understanding, I don't want to get too hung up on one quarter. But appreciating the volatility with COVID, Rod, you talked about some recalibration in the Wet Shave strategy, which I think people appreciate. But at the same time, given a challenging quarter, and we've seen a number of HPC companies reinstitute the practice of providing guidance and instilling some confidence, I think, to the shareholder base. I just was hoping for some of the key areas of variability. Dan, I think you talked about mid- single-digit declines in June, which seems representative of what you're seeing. Rod, you talked about Wet Shave being on more solid footing and feeling better about where you are with retailers. Maybe just to push here a little bit, maybe talk about the biggest areas of variability and the decision not to formalize guidance here for the remainder of the year? And then I have a follow-up.

Yeah. Dan, go ahead.

Yeah, I think it is simply a recognition that the uncertainties that surround COVID far outweigh the knowns and the certainties. And that's the reality, particularly as we head into the back end of the summer and the Sun Care season. But just to kind of reiterate, our line of sight to the quarter, we did provide some color to that in the call, and I'll just - I'll sort of tick through it because I think it's helpful. You hit the first point absolutely right, Kevin. We do see a sequentially improving top-line. We think that we cycle through the lowest of the low of COVID-related impacts in that May time period, saw the exit rate on the quarter strengthened, and that's continued in July. So we're pleased about that mid-single-digit declines is a good proxy. We also are seeing a bit more stability in the margin profile of the business. There are still headwinds related to COVID, for sure, onetime and other. We anticipate slightly less impact from category shift in the margin profile. And as we start to cycle through the Q2 pantry loading, there's less of an effect in shifting of segments, less volatility in margin. We obviously have the price increase, we have the full savings, and we continue to anticipate positive tailwinds from commodities. So again, I think while difficult to quantify, we're seeing a more stable margin profile than we exited Q3, which - and we're going to continue to invest in this business. We feel like we spent extremely efficiently in Q2 behind our priorities in Japan, in Women's, in Sun, and we're going to continue to do that in Q4. So that's how we're thinking about the quarter sort of in high level points, but again, shying away from trying to quantify it because the range of outcomes is still too wide.

Okay. I appreciate the color. I'll pick up with Chris off-line. Just while I have you guys on the CREMO deal, can you offer a little bit how that came about maybe some financial information, EBITDA in that business? You did mention it was profitable growth rate, what you think you can do with this in terms of revenue and cost synergies and where you see sort of the biggest opportunities from a distribution perspective, both from a channel and perhaps even geographic? And then I'll pass it on.

Yeah. Kevin, I'll start, and I'll throw it over to Dan for some of the specifics. How it came about? We had the FTC block our transaction with Harry's back in the winter. And coming out of that is we've done the strategy work, again, which we'll be prepared to talk more about here in a few months in detail. And it's really about getting the bottom-up 2021 planning work done to have a solid basis in place for that. But we were always very interested in increasing our exposure around men's grooming, the non-Blades and Razor segment where there's significant double-digit growth happening across the category. And a big part of the rationale, the Harry's transaction was not only the portfolio that existed there, but the ability to grow and drive that part of the business. And we very much see this as a pure-play grooming execution where that category growth is the fastest with CREMO. And so again, it's - you're seeing us just follow through ultimately on what was a failed transaction with what we're confident will be a successful transaction to really grab that growth in a bigger way. So that's how it came about. Dan, you want to take the rest?

Sure. Yes. I mean, I'll probably shy away from giving specifics, but I'll add certainly some color. The top-line of this business is extremely attractive, you had a very healthy growth rate. You saw the numbers, $58 million TTM sales in June. It's growing by both velocity and distribution gains. It's the largest niche brand in its space, ex-razors and blade. So it's a healthy book of business that has a really attractive growth algorithm to it. It is profitable. It has a gross margin profile that's accretive to the Edgewell portfolio, which we're excited about. And in terms of expansion, we see quite a bit of opportunity for this brand. At the channel level, reasonably well distributed in mass, but certainly opportunities there as well as drug grocery and online, where its business is quite small today. And also geographically, we're quite excited about the opportunity to bring this brand into our international portfolio. So there's a lot to like about this acquisition and about the business model.

Okay. I appreciate the color, guys. Good luck.

Thank you.

Thank you.

Operator, next question, please?

Next question comes from Mr. Jason English, Goldman Sachs. You may proceed.

Thank you. Hey, good morning, folks. Hope all is well.

Good morning, Jason.

Good morning. So the underlying market share trends are encouraging. And you're clearly expressing narrative of a lot of confidence that the base business you have today is turning around, stabilizing and improving from here. Meanwhile, it doesn't appear reflective in your valuation. And with the amount of cash you spent on CREMO today, you could have purchased probably around 15% of your shares outstanding. So it's a pretty high bar in terms of the accretion math or the value that must come from CREMO to match that. Quick back of the envelope math suggests you need to scale that business to north of $200 million to match that same type of return of just buying back yourself at this current valuation. So a couple of questions. And I guess the redundant a bit to what Grundy asked, but you didn't give a lot of specificity, so I'm going back at it. One, do you generally agree with that sort of conceptual math? And two, do you think that's possible that you could scale that size? And three, what's the pathway? Like, where is it distributed today? Where can you get it to? What are the revenue synergies? Help us get confidence that this is the best use of the cash and at least as good, and hopefully, if not better, than just buying back your own stock at this valuation? Thanks.

Yeah, good morning, Jason, fair question, right. And as we look at capital allocation, I think we've talked about our relative priority around organic needs of the business, smart, disciplined acquisitions. And then you look into share repurchase, potentially dividends, right, all of those things are things we're looking at are on the table as we look at our strategy going forward. I don't think we're ready to declare all of those today, but that's something more formally and more specifically we'll have a point of view on when we have more time with you all and the investors in Q4 as we think about Investor Day and telling the story in a more detailed way. Relative to CREMO, I'm not going to get into more specifics on the assumptions other than to tell you, because I don't want to give away, specifically our plans. Other than to tell you, we see significant upside in the brand, in the business itself in terms of distribution expansion, where it's not today, but also there's an interplay here with our base Edgewell brands and business. And this is part of the story to regain credibility and to regain our footing with not only end consumers who interact with and use our brands, but also with retailers who, frankly, over the last couple of years, had lost confidence that we could be a legitimate partner in Wet Shave and Grooming. And as we rebuild that and we build back our position, not only with better brand building capabilities, better omni-channel execution, better retailer relationships, this is one piece of the arsenal to go do that, and it's a big piece because it signals we're serious about winning and being successful in our primary category here. And so again, we've done the math, and I'll tell you, we're confident we can create a lot of value here. And we spent a lot of time looking at that and going through the assumptions and to the comparable choices. And we feel like this is the right choice today for our shareholders.

Okay. I appreciate that. That's helpful. And just going back to the market share performance, the figures you gave on at least the U.S. razor and blade market share, I think you said the last 12 weeks, down 120 basis points or so look worse than what we've seen in the Nielsen data. I'm guessing that the differential is your private label business as probably what does appear to be losing share in the U.S., is that right? Is it your brands are doing better, but private labels, the negative offset? And if so, what do you believe is driving the private label share weakness? And any thoughts or anything we should contemplate as we think about the forward trajectory for that business?

Jason, we have private label down 6% in the quarter. It was up 2% in the first half of the year. So it stepped back a little bit, but it's still beat the category, which we had at down 10%. And so Private Label did not perform worse than our branded business. There's a couple of things going on, I think there's specifically the biggest change in the business is we lost distribution at Sam's Club in the February, March planogram resets, actually a little before that, where we lost a big chunk of systems business. And again, I don't know how that's flowing through the share reports. And that's the single biggest drag. Absent that, we're actually growing share in other channels with other customers that then holds the share relatively flat overall in terms of the trajectory that it was on. Dan, I don't know if there's anything else you would add to that.

Yeah. I think good comments. Maybe, Jason, for perspective, our total portfolio share in the quarter was flat, which I think is a significant statement. It was actually up 100 basis points in unit share. You saw the strong performance in Sun and Shave perhaps still challenged result in Fem, for example. But we knew the impact on the branded side of the business that was coming from the distribution losses in Sam's on both men's and women's. Not that I'm trying to isolate that. But if you exclude the Sam's distribution loss, Hydro Men's and Hydro Silk both gained 40 to 50 basis points of share, strong performance at target, strong performance in food. So again, we have a lot of work to do here, but I think a more stable share results in our branded business is what we take away from the quarter as encouraging signs.

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

Thanks, Jason.

Operator, next question, please?

Our next question comes from Faiza Alwy, Deutsche Bank. You may proceed.

Yeah. Hi, good morning, everyone. So I wanted to talk a little bit about investment spending and sort of where you are in that process. And I'm wondering if you can give us a little bit of a preview as you talk about your strategy. Because it seems that so far, a lot of your competitors within household, personal care have been spending significantly behind the category, just overall across categories. So it seems like the cost of growth is increasing. And I wonder how you were thinking about it? And whether you think there is more that you can do in terms of expanding project, if you will?

Yeah. So I'll take it in 2 parts. On the investment side of the business, we obviously had to make significant steps to prioritize in the quarter given the COVID-related pressures we felt in the top-line. We prioritized against our strategic priorities. And I think I referred to those in my comments. So Japan and Hydro Schick 5 launch in China, the women's shave business in the U.S. and, of course, Sun Care. If you look at our spend overall, though, our advertising dollars as a percentage of net sales were actually flat year-over-year. Where you saw the lion's share of the declines was in the promotional end of the spend, if you will, which is not surprising, right. You see less display activity, less merchandising, less consumer promotions. So we did feel like we invested at the right level, but importantly, invested behind the right priorities, and we're going to continue to do that going forward. As far as are there further legs for Fuel, certainly, the answer to that is yes. And not so much because of the Fuel program, which technically has another year left in it. But just by the way we are running this business and the push that we have on productivity and efficiency. That is in the DNA of the organization that is not about a named program. And so we are going to continue to run this business with the same level of focus and effort on Fuel-like savings, irrespective of that program. We're confident there's continued runway there in terms of productivity gains and efficiency gains for the business.

Okay. That's helpful. But do you think for longer term, do you think that you need to further increase your A&P spending or just general investment spending overall?

We do. And in fact, if you remember, that was embedded in our outlook for 2020 when we began the year, we were leaning in on A&P spends and R&D spend to the tune of plus $20 million or so year-over-year. That's what we had anticipated, and we were on that path pre-COVID. We've made the necessary adjustments, given the pressures in the quarter. But we still maintain a leaning instance when it comes to investments behind the right strategic priorities.

Okay. Thank you.

Thank you. Operator, next question, please?

Our next question comes from Olivia Tong. You may proceed.

Great. Thanks. Good morning. First, I want to ask you about Wet Shave and just the competitive environment, whether you're seeing more from the main branded competitor? Or is it more coming from the newer disruptor brands? And then assuming that the COVID impact sort of turn into recession challenges over time, can you talk about your expectations of your business in terms of the branded versus the private label performance and then mix? Thanks.

Yeah. Thank you, Olivia. Good morning. On Wet Shave, the competitive environment is really high, right. It remains a highly competitive segment. There's no doubt. And Procter is very good at what they do. We have a lot of respect for them. And they're operating well in the category as the leader. We know the Harry's business pretty well by spending time with them. They're a talented group and have brought innovation and new thinking to the category, and you've got Dollar Shave there with Unilever, right, backing that when you put that all together, it's a highly competitive environment. Despite the competition and where it sits, if you look at the consumer, and you look at the totality of the portfolio that each of us have, we have a very interesting portfolio that has a right to win and exists with consumers in segments where we play. We've got great technology and quality. We - for the U.S. market, we grind blades in the U.S., like there's a lot of things we can play with as we move forward to be successful in these categories. And I think we're increasingly confident we can be despite the competitive environment. Okay. So that's what I would say on Wet Shave in the competitive environment. Again, increasingly confident given what we have line of sight to. On the recession, it's a great question because I think this is what we're all facing, and this is likely to come out of this. Again, I think our portfolio sets up well in a recessionary environment. We're not, in many cases, the price leader. We play more in mid-tier and value segments. And then we have the big Private Label piece of the business. And if you look back to past recession, you've seen trade down to Private Label. And so I would expect that to happen again. As you have more value offerings and better disposable options, I think those segments are also potentially net winners in this. So it's not just about Private Label. But again, I think we feel good about our portfolio and our price points. Not just in Shave, by the way, but in Sun Care, Hawaiian Tropic and Banana Boats are both right in the mid-tier pricing zone. We think that's part of why they're winning today versus some of the higher-priced alternatives. And so again, from a recession-proof portfolio, I think we've got one that is recession proof, is any other out there in the categories where we play.

Got it. Thanks. And then just one follow-up. You mentioned your thoughts on the COVID impact of sales, but how much do you think COVID-related costs impacted SG&A in particular? Because the cost saves were pretty solid, the Fuel savings, but SG&A quarter was relatively in line on both a year-over-year and sequential basis despite the sales shortfall. So just wondering if you could talk a little bit about that? Thank you.

Sure. Yeah. I would say the COVID impact outside of sales, first of all, hit us most significantly in gross margin. We talked about that both the onetime costs and the channel shifting - segment shifting that occurred, which was negative to our margin profile. In terms of SG&A, we feel really good about our ability to pull back on non-discretionary spend and discretionary spend, prioritize where we want to spend behind the business. We essentially didn't hire headcount during the quarter other than key talent that we needed to bring into the organization. You heard Rod talk about that, for example, with Eric O'Toole. So we made conscious choices to both pull back where we thought it was smart and thoughtful to do so, but also invest in talent and capabilities, both in our North America leadership structure and also in our e-commerce and R&D organizations. And those are partial offsets for the savings that you're seeing as a result of COVID.

Thank you.

Thanks, Olivia. Operator, next question, please.

Next question from Nik Modi, RBC Capital Markets. You may proceed.

Thanks, good morning, everyone. Hey, Rod, I was hoping you can just talk a little bit about the share progress that you've made, maybe helping us understand some of the underlying dynamics there. I mean is this velocity? Is it distribution? Is this based on perhaps some delayed new product launches? And then I guess kind of dovetailing with that is distribution losses have been pretty common over the last several quarters. And I'm just curious, like when do you think the leaky bucket will kind of get stop leaking? Any perspective around that would be helpful?

Yeah, thanks, Nik. Good morning. The share position or the, let's call it, the share stabilization we're seeing, particularly in Wet Shave, has little to nothing to do with distribution gains. We've had none in Wet Shave. We've had some improved positioning here and there at a couple of retailers. We picked up a little incremental here and there behind some innovation. But largely, we've been donating shelf to the competitive set now for the last 3 or 4 years. And so, what we're seeing is better execution and performance within the space we have. So it's around velocities. Outside of measured share, it's around better communication programs and better innovation, particularly on our women's portfolio in the Hydro line, where we're growing share rapidly on Amazon around some of the Hydro Silk and Intuition lines. And so, I think it's better execution, it's better messaging, and it's all around velocity. In terms of the leaky bucket, the real chance to impact that, as you know, is - and here in the U.S. is in the spring planogram reset timing, in the late winter, early spring. And as you might expect, we've been hard at work on building plans that are better and more interesting than in partnering with retailers to stop the leaky bucket, but not only stop the leaky bucket, get some additional space back that we've lost over the last couple of years. And so, we're working hard on that. That's the next real opportunity in Wet Shave to stop the leaky bucket and move that forward. That applies to Fem-Care as well. The single biggest drag in our Fem-Care business over the last 3 or 4 years that perfectly correlates to the top-line decline is low shelf space and lost distribution. And we're cycling another one of those this year at Walmart in particular. Again, as we move forward off of the base that we have, I think we're increasingly confident that we can hold distribution and build some back as we move forward. And that's part of the confidence I think we have that the key driver of decline in this business has been around 2 things: engagement with the consumer, we're working very hard on that to have better engagement with consumers; and then, have a more real estate at shelf. It's that simple. And again, I think as we look to next year, we'll be proven on where we land, but I think we're feeling increasingly confident across the portfolio that we can land better outcomes.

Thank you, very helpful.

Thank you.

Operator, next question, please.

Next question comes from Jonathan Feeney, Consumer Edge. You may proceed.

Good morning. Thanks very much. I just wanted to clarify a comment earlier. When you said your portfolio share was flat, is that flat ex-distribution losses? Like across all of your brands and businesses in the U.S., you're saying your share was flat. Could you clarify that?

Yeah, that's exactly what it is. So if you take the U.S. portfolio in totality, the categories in which we compete, share was flat. And, that was obviously driven by robust gains in categories like Sun and shave preps, and then obviously, share losses in areas like Fem-Care which we talked about.

And that ties to, I believe, it was Rod's comment in the prepared remarks about 40 basis points of share gain for the Hydro franchise excluding distribution losses, is that right also?

Same math, same figures, slightly different, obviously, because we excluded from that calculation, the known losses at Sam's on Hydro, and said, absent of that we saw 40 basis points of gains, but same database and same math.

Got you. Okay. So it really seems like it's fair to say that when you lap these distribution losses, you're relatively happy or at least happy with the share progression within your businesses across the board. I mean, I guess, maybe I'm not going to just to ask you if you're happy. But how is that compared to your plan coming into this quarter? Like are you pleased with that relative to your plan?

Yeah. And maybe the way to think about it is if you look at the distribution losses that we saw in Sam's on both men's and women's branded, you look at a heightened competitive environment that Rod talked about. Obviously, we're cycling through COVID. You look at the channel shifting that took place, which was not favorable to our business. It moves into food, for example, and out of mass and drug. You put all of that together and you look on the men's side of the business at a share picture that's largely in line with our 52-week trend. So while facing those headwinds and the known distribution losses from Sam's, our share position was largely in line with longer-term trend. That's an encouraging sign for us as we think about the quarter. As Rod said, obviously, a lot of work remains, but I think an important point of context.

It makes a lot of sense.

Yes, John, if I could - yeah, John, if I could just build on that one point. I think are we happy about where we are versus plan ex-COVID around share? Yes, we are. Are we happy with much else relative to where we are overall? No, we're very dissatisfied, particularly in Wet Shave, and in the U.S. Men's business on where we are. And we're very hungry to change that and not only get to a place where we're growing market share across the portfolio, but we're creating a lot of value for shareholders. We're very cognizant that today we are not doing that, but that's what we're working to do.

And one unrelated question, if I might. When you think about Jack Black, Bullfrog (sic) [Bulldog] and now your latest acquisition, longer term, I mean, broadly speaking, how does the manufacturing and fulfillment overlap look? Is this a question of you can utilize existing capacity, which maybe utilization isn't where you want it to be? Or are these just - do you have to just keep these businesses completely separate forever and try to maintain the quality niche, whatever it is, just the nature of the business? Thanks.

Yeah, so, Jonathan, I'm going to correct one thing you said, because our brand team would not be happy. It's Jack Black, CREMO and Bulldog.

Oh, didn't I say Bulldog. I am sorry about that. Sorry about that.

It is not [indiscernible] Bullfrog, we have respect for Bullfrog too. But this is Bulldog.

It's pouring - it's pouring rain outside, so that's probably what made me say that, I'm sorry.

Yeah, that's okay. We've had our own technical issues this morning. No, today, these brands largely, as we've acquired them, manufactured via third-party outside manufacturing relationships. All formula cards owned, all the R&D product development, in-house owned, but executed via third-party manufacturing of typically a finished product. And so, as we look at that across the 3 brands, there's obviously opportunity to leverage scale across that. In fact, in some cases, the third-party manufacturers are the same. And so as we look at that and becoming highly efficient, but not losing anything around the formulation or the efficacy of the product that, frankly, is the magic here beyond the brand positioning, where consumers love the brands and the experience they have. We're not going to lose any of that. And that will be very unique, very distinct, different teams working on that, but there will be some backend efficiency we think we can drive.

Thank you very much.

Thank you.

Thank you, operator. Next question, please.

No more questions. I would like to turn the conference back over to the speaker for any closing remarks.

All right. Thank you, everybody. I appreciate your time and running a little longer today. And thanks for the interest in Edgewell. Again, I think dynamic times here, and I hope everyone stays safe and healthy, as we move forward, hopefully, to better times in not-too-distant future. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Have a nice day. Thank you.