Good morning, and welcome to Newell Brands' Fourth Quarter and Full Year 2020 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded. A live webcast of this call is available at ir.newellbrands.com. I will now turn the call over to Sofya Tsinis, VP of Investor Relations. Ms. Tsinis, you may begin.

Thank you. Good morning, everyone. Welcome to Newell Brands' fourth quarter earnings call. On the call with me today are Ravi Saligram, our President and CEO; and Chris Peterson, our CFO and President, Business Operations. Before we begin, I'd like to inform you that during the course of today's call, we will be making forward-looking statements, which involve risks and uncertainties. Actual results and outcomes may differ materially. I refer you to the cautionary language and risk factors available in our earnings release and our Forms 10-K and 10-Q available on our Investor Relations website for a further discussion of the factors affecting forward-looking statements. We assume no obligation to update any forward-looking statements. Please also recognize that today's remarks will refer to certain non-GAAP financial measures, including those we refer to as normalized measures. We believe these non-GAAP measures are useful to investors, although they should not be considered superior to the measures presented in accordance with GAAP. Explanations of these non-GAAP measures and available reconciliations between GAAP and non-GAAP measures can be found in today's earnings release and tables as well as in other materials annual on the Investor Relations website. Thank you. And now I'll turn the call over to Ravi.

Thank you, Sofya. Good morning, everyone. Happy New Year and happy Lunar New Year, and welcome to our call. I sincerely hope that you and your loved ones are staying healthy and safe. While there's no doubt that 2020 was a very challenging year, I am immensely proud of the results our team delivered as we quickly adapted to the evolving environment. At the same time, we remain focused on ensuring the safety and well-being of our employees carefully operating our plants and distribution facilities while [indiscernible] our capacity and maintaining financial viability and business community. We closed this to start the year on an exceptional manner with fourth quarter and full year results ahead of our expectations across the board. This is a testament to the incredible resilience, fortitude and commitment of our employees who execute with excellence. In fact, in first quarter, we pivoted to accelerate the turnaround plan and drove significantly stronger underlying performance in the business in the second half of the year across all key value drivers, top line margins, earnings per share and cash growth. We also achieved meaningful progress against our strategic priorities in 2020. First, we strengthened and diversified our team as we broadly worked with our leaders from the outside into our clients, commercial food and outdoor and recreation businesses as well as the driver functions. They hit the ground running. As COVID certainly hit off, did not allow for any down time. They complement our strong existing leaders across the remaining 4 businesses. The leadership team and I are focused on building a winning one new culture focused on trust, transparency and teamwork. A diversity inclusion belonging efforts are our top priority as we continue to gather our employees and unify everyone behind the common purpose of delighting consumers with…

Thanks, Ravi, and good morning, everyone. The team delivered an outstanding finish to the year with Q4 results ahead of our expectations across every key metric, including top line operating margin, EPS and operating cash flow. In fact, our 2020 results exceeded or were in line with the initial guidance we laid out a year ago despite the significant disruption from the pandemic. We are now 2 years into the turnaround and have come a long way in strengthening the financial performance and operational effectiveness of the company. Last year, we drove excellent progress on each area of the turnaround plan and gained significant momentum in the second half of 2020. Before getting into the financial results and outlook, I want to spend a few minutes on operational highlights. We made significant progress simplifying the organization. For example, on SKU count, we exceeded our target a year early and exited 2020 with 47,000 SKUs as compared to our goal of 50,000 by the end of '21. We have eliminated 54% of our SKUs over the past 2 years with a 37% reduction in 2020 alone. Effectively, we have doubled our revenue per SKU over the past 2 years. We've also meaningfully strengthened the quality of our inventory, cutting our excess and hostile inventory by more than half since 2018. We are not stopping here, and we'll continue to simplify the SKU portfolio across each of our businesses. Over the past 2 years, we've also significantly simplified our IT architecture as we rationalize nearly 90% of IT applications, ending 2020 with less than 800 apps; successfully implemented 8 ERP migrations, including the October 1 move of Coleman North America to SAP, which went smoothly. We expect to get 95% of our business on 2 ERP systems over the next 2 years.…

Thank you. [Operator Instructions] We will now take our first question from Bill Chappell from Truist Securities.

I just trying to -- I understand forecasting this year is more of an art than a science. But can you kind of walk us through -- on the -- I guess, the comparison, just understanding, I guess, 3 things. One, being a year ahead of expectations, what the SKU count reduction does to expected revenue to the Yankee store closures? I mean I know it won't have as much impact on first quarter, but certainly on the back half. So just trying to understand what that does. And then third, I can't remember or I don't remember exactly what it was in terms of -- last year, you had a fair amount of plant closure around COVID that created shortages and out of stocks. Any idea of kind of what you can make back as we look at the first, second quarter of this year. Sorry, that's a lot.

Yes. No problem. Let me try to address those. So We are very excited on the SKU count progress that we've made. As I said in the prepared remarks where we've gotten to our goal a year early. One of the things that we've done is we've put in place a systemic process that we call a Magic Quadrant analysis that looks at revenue per SKU and gross margin per SKU. And as we've gotten into that and systematized the process, we think we've got opportunity to go further on SKU count reduction going forward. We don't believe that this is going to be a revenue headwind. We actually think that this is going to be a revenue health for the company and a cost help because it allows us to improve our customer service levels. We're in the process of setting new targets, and we'll share more probably at CAGNY next week with regard to the out-front targets, but very encouraged by the results so far, and we see it as an enabler for both revenue growth and continued productivity. On Yankee stores. We ended 2020 by closing, I think, 77 stores in 2020. Our store count was 398 stores. I think our plan for '21 is to close somewhere about another 80 to 100. Most of those will happen, and in fact, most of those happened in January. So it's very part-of-the-year loaded. That does not have a significant impact on the company's revenue because we're growing very fast in that business on the e-commerce side, with the wholesale business and in the international markets. And so we believe that we're going to see a profitability benefit as we make that transition from retail to more online and wholesale in that business. And then on the plant closures. You're right, in the second quarter last year, of our about 135 manufacturing facilities and distribution centers, we had 20 that were closed via government mandate. As we sit here today, all of our facilities are open, largely operating at full capacity, and we have largely caught off across the majority of our product categories. That being said, we do have some product categories where we're still supply-constrained. And those tend to be the product categories where we've seen outsized consumer demand increases. But we are working hard to catch up and add capacity in those situations.

Well, that's great. And one just follow-up on Writing, and you're talking about kind of tougher comparisons for the overall business in the second half. I've got to think Writing is set up for a gangbusters. You had third and fourth quarter, assuming schools are back open, offices are back open. Are you preparing for that? Or how should we be looking or thinking about that as we move to the third quarter, fourth quarter?

Yes. Bill, let me tackle that. But the first piece of good news in terms of the resilience of the portfolio when you look at 2020 with all the headwinds we had on Writing that we were able to do as well in the second half and actually contain the decline for the full year to a negative one is testimony to how we're beginning to get resilience with other brands. So that may mean comforting from a long term. Writing is a very well-managed business for us. It's just the macro has been what it has been. When we look at '21, I think what we're assuming is that schools will go back to reopening are these the [indiscernible] in the second half of the year. And we've taken that into consideration. We're preparing for it. We think it will be a more normal back-to-school season. And I think some of the universities as well. The big unknown at this stage is the commercial business. Because when you look at offices, the prediction I had thought that most of the offices would head back in by July, but everything we're reading and hearing is that until you get hurt in early, I think companies are low to sort of take that step. We have learned from Silicon Valley companies that they may actually remain closed not only into the fall, but the entire year. So that does get affected in terms of our commercial business, which is softer part of the business. So we'll have to see on that. Overall, do we expect the Writing business to grow in 2021 versus 2020? Absolutely. How much? I think second half will be the question mark. And look, the other thing I should say, which I've said in my prepared remarks, the share gains we've had in Writing are truly spectacular. And Sharpie's brand strength that it can go beyond markers and how it is doing in the pen side and all the innovations we are coming up. And lastly, we're really comparing for a different future with this business. We're now -- our team is very focused on innovations, which is there's more stay-at-home stuff that we have prepared to do that in the longer term. So it's still very -- feel good about this business and -- but the other businesses are picking up as well.

We can now take our next question from Olivia Tong from Bank of America.

I was hoping to talk a little bit more about the margins, particularly gross margin. You mentioned the commodity pressure, of course, and some pricing. So perhaps could you give a little bit more detail in terms of where you think you could potentially price. And then just sort of marrying all the different things, the puts and takes from margin. You recognized pressure, potentially some offset from pricing, maybe a little bit less leverage but hopefully, an improved sales mix relative to last year. So just think me through all these different pieces. And if you could just give us a little bit more color on that in terms of the puts and takes there.

Chris, would don't you take that?

Yes. Sure. So if we think about the margin guidance, the operating margin guidance in particular, gross margin impact for next year, for 2021, basically, there are 2 primary headwinds. The first is inflation, which, as I mentioned in the prepared remarks, is due to resin wage rates; the sourced finished goods, primarily due to the strengthening of the Chinese currency and transportation costs. We expect that inflation pressure based on what we're seeing today to be almost a 200 basis point headwind for the company for next year, which is a significant ramp up from prior years. We also are planning to increase our advertising and marketing cost as a percent of sales in 2021, given that our innovation pipeline has strengthened in 2021 as we've brought new leadership on and they've begun to develop stronger innovation plans. So those are the 2 headwinds. We're guiding to operating margin growth because we have benefits that more than offset that. And the benefits that we're seeing are -- the biggest one is productivity with the fuel savings program. And so we're using that productivity drive to basically offset -- largely offset the inflation pressure. We also have -- we are going to take selective pricing. We're not taking pricing to fully offset inflation, but we are taking selective pricing in those categories that have seen the biggest inflationary pressure. We also expect business unit mix benefit. As Ravi mentioned, we are expecting the Writing business to come back and be a meaningful growth driver for the company in 2021. Actually, we're expecting the Writing business to grow starting in the first quarter from what we've seen. And then the last thing I would mention is continued focus on overhead cost reduction through our simplification initiatives. So those are sort of a walk through the puts and takes. I think when you net it all together, we're expecting to drive gross margin improvement in 2021 despite the inflation environment because of the productivity efforts the pricing and the mix from the business unit forecast.

Can I ask you one about how you're thinking about channel exposure, probably for the business going forward? Obviously e-commerce has been growing pretty substantially. So as you expand online, can you talk about the margin implications of that? And then where are you focusing on distribution expansion more acutely? Like which segments do you think you have more opportunity in terms of distribution expansion?

Yes. Let me quickly get back to this. So we -- I think e-commerce is here to stay. It's going to continue to grow, and we're going to be advantaged because we have got strengths. As I mentioned, 22% global net sales penetration; and e-commerce growth, high 30s. And for us, that business, our e-com growth business is quite profitable. And it's not something that is -- it's a very good margin business. So I don't think that's a concern, and we'll continue to grow there. Second, in terms of channels. As I mentioned, where the big thrust for us is the grocery business, the dollar stores, the drug stores. And we're making already good progress, especially our Food business really had a good year on the grocery side. We're putting together now a very focused sales team on this channel. We think that there's a lot of opportunity One, we continue to do well with our strong mass merchants or our biggest customers, so continued focus on that.

And our next question comes from Kevin Grundy from Jefferies.

Congratulations here on the recent momentum. It's great to see. First question, perhaps for Chris on the margin opportunity, and I have one for Ravi on the geographic opportunity. So first, on the margin opportunity. Chris, as you're well aware, the 600 to 800 basis point opportunity with respect to combined gross margin and overheads, understanding those figures are gross and ex, any sort of reinvestment concerns? But frankly, it's pretty unique and rather substantial within the consumer space. So the long-term guidance calls for 50 basis points of improvement each year. You guide this year is 30 to 60 basis points. The question is, what's the organization's ability to lean in and accelerate the pace of that margin enhancement and unlocking that value for shareholders while balancing versus the investment needs and cost inflation that you'll encounter in any given year? So your comments there would be helpful. Then I have a quick follow-up on opportunities outside the U.S.

Yes. So let me start on the margin question, Kevin. So if you look at the underlying trends of what we're driving this year, the organization is driving sustainable margin improvement progress on both gross margin through the fuel program and on overhead reduction through the complexity reduction that dramatically exceeds our guidance of 30 to 60 basis points in operating margin improvement. The reason why we're guiding to 30 to 60 basis points is because we have an inflationary environment, which I mentioned is about a 200 basis point headwind. And we're planning to increase advertising and marketing costs as a percent of sales significantly in 2021. And so if those 2 things were not there, you would see our ability to fundamentally be driving operating margin improvement be higher than the net guidance. I think the evergreen model that we've put out of 50 basis points improvement each year, our guidance is very much in line with this year. So we're excited that our guidance this year has us fully on all metrics in line with the -- with our evergreen model. And we think that the company has really turned the corner in regard to delivering against that evergreen model. So in any given year, we'll guide as appropriate when we get there. But I feel very good about the underlying capabilities of the company to continue to drive margin improvement, primarily in the gross margin and overhead area.

Got it.

And do you have a follow-up?

Yes. I got a follow up. I'm sorry?

Yes. The follow-up, go ahead.

I do. Yes. Ravi, just very quickly on the opportunity outside the U.S. for the business. I think it's probably been a little bit lost in the company's efforts to stabilize and put processes in place, which you've had success doing. But now it's about roughly 30% of the company's mix. Could you spend a moment on the international strategy? How big of a priority it is to grow the business outside the U.S.? Where you see the greatest opportunities? And as we think about the algorithm for the overall portfolio, how should we think about the core sales growth rate for your businesses outside the U.S.? And then I'll pass it on.

Yes. So thank you, Kevin. As you may know from my background, I've been President of International [twice] in my career. So obviously this is something that is near and dear to my heart. But our first priority was to really get U.S. focus, which we are now beginning to get traction. So we're telling more of our attention on that for '21 and beyond. I think there is a lot of opportunity. The key is debt, not breadth. We are not into branding drags, which has been the issue in the past as where I think in a lot of places, that the overhead in the international business are higher than U.S. So we've got to get -- it's very fragmented. So if you take the U.K., we have many businesses that are in different offices, there's not the synergies. So we've got to get focused. So what we're doing is focusing on sort of top 10 countries and saying how do you get after them and how do we create longer-term a country management system, more of a one-year approach rather than everyone doing their own thing. Having said that, the teams have been still doing pretty well. And when you look at the fact that overall, international actually grew pretty well and slightly better than the U.S. in 2020. And when you think about appliances where Latin America is the strongest, it was double-digit growth -- strong double-digit growth in Latin America. So it's all positive. I just think there's a lot of opportunity, and we're going to get after it with a very well-articulated strategy. COVID's also made it difficult to get to these countries. But this year, this is one of my big priorities as we go forward.

And our next question comes from Wendy Nicholson from Citi.

Two questions, please. First is just in the very short term, we've read some reports about the port of Los Angeles having backlog issues. And Chris, I was just wondering if you had any issues given that you import some of your goods from China or your materials in China. Do you have any issues or bottlenecks there? And then second, question. Actually, that's on the margins, but looking at it from a different perspective. My take is that the biggest hindrance to your overall margin is how low your margins have been in appliances and cookware specifically? And I know there's been a lot of lumpiness quarter-to-quarter. But with new management there, how long do you think it will be until that specific segment can firmly be in double digits from an EBIT margin perspective?

Very good. Thanks, Wendy. So on the port of Los Angeles, I'll just give a few comments. We do import a significant amount of containers through the port of Los Angeles from Asia and primarily China. That has been a backlog and a source of supply disruption for us. So earlier in the pandemic, as I mentioned, in the second quarter of last year, it was about our manufacturing facilities and our distribution facilities. Now the disruption is more related to that port. We are getting products through there. We're also shipping through other ports on the East Coast and other places in the West Coast. The prices for containers have gone up dramatically. We are a large-scale importer from a volume standpoint. That gives us some advantage in the marketplace because we have contractual commitments for volume and pricing that I think advantages us versus many of our smaller competitors. So we don't see it as a major headwind for the quarter or for the year, but it is something we're sort of battling every day as we go along here.

Great.

And then let me address Appliances there. So look, yes, we recognize that the Appliance business, we need to work on the margin structure here. There's no question. So the big issue is gross margins. And part of the issue for us is we deal with sort of the OPP and FPP segments. And so we've got to get more innovations out, which then can be at high gross margins. The good news is when you look at our brands, which are more premium outside of the United States, like Breville in Europe or Oster in Latin America. The gross margins outside of the U.S. are actually quite good. So what the charge -- Chris often say, we've got to get that gross margin up over the next several years. And also, as we get out of these scale businesses, some of these we are finding were gross margin-negative so we really need to get out, if you are giving out sort of dollar bills with some things. It's no good. So we're being very hard headed about looking at these categories. And while in the sharp down, that might have a little revenue shortfall. It's okay. We need to get the margins up. So very, very focused on gross margins on this business.

Next question comes from Joe Altobello from Raymond James.

Just a question on the guidance. Given the momentum that you guys saw in the second half, and I know you assumed some of those consumer trends that we saw last year, have started to normalize and there's a lot of uncertainty. But why would sales in 2021 be below 2019? I mean other than Writing on the commercial side, what businesses might be lagging from 2 years ago?

Sorry, did you say 2021 versus -- can you repeat the -- we couldn't hear you very well. Sorry about that, Joe.

Yes. Outside of Writing on the commercial side, what businesses might be lagging from 2019?

Yes. So I think -- I don't think we're -- our guidance is implying [indiscernible]. Let me try to just address the top line guidance and give some color to it. So I think, as you all know, the company turned positive on core sales growth in Q3 of last year. We had a very strong Q3. We're reporting today a strong Q4. We're guiding to high single-digit core sales growth in the first quarter and some low single digit for the year. And I think when you look at that and you look at the -- like if you were to look at our 2-year stack growth rates, returned positive on a 2-year stack basis in Q3. We were positive on Q4, we're guiding positive on Q1, and we're guiding positive for all of 2021. If you look specifically at the categories, I think the categories -- the category that has been most negatively impacted, as we've talked, has been Writing because of the schools and office closures. But as Ravi mentioned in the prepared remarks and as we alluded to on the Q&A, we are exiting 2020 in a very good position from a retail inventory perspective. And we expect the Writing business to be back to growth in 2021 starting in the first quarter. So I don't think we're seeing categories that we're expecting to have declines heading into 2021.

So let me just add one thing to that, which is the first half, look, we have better visibility because no one knows what's going to happen. And the first half, we are pretty bullish. I mean, we have given you a pretty good sense of first quarter. We had a great second half. We also take into consideration a Food business that grows 25% last year on core sales. It's got to lap and that was big in the second half especially. So you've got to lap that. So when you look at stacked growth, I think we're doing pretty well. So we actually feel pretty strong. But even coming out of COVID, this business is beginning to turn around and get growth momentum.

That's helpful. I appreciate that. Just one quick follow-up for Chris. You mentioned that there's more opportunity on SKU count. You're at 47,000 now. How low do you think that number could ultimately get?

Yes. So we're -- as I mentioned, we're excited about getting to our goal of 50,000 a year early. We're going through that analysis as we speak. And I think we're doing it in a database fashion. Just as a little bit of background. 2 years ago at CAGNY when I first presented as the CFO of Newell Brands, we were over 100,000 SKUs. And so we've been able to go from over 100,000 down to 47,000. And we set our 50,000 goal based on just sort of a thumb in the air. What we've got now is a much more databased way of tracking and measuring it. We're finalizing our objectives, and we'll share a revised out-front target next week at CAGNY as we get there. But there's no question that we have further opportunity for SKU reduction. And that further opportunity, I think, is going to enable us to both accelerate revenue growth and drive strong gross productivity and cost of goods savings and margin -- gross margin improvement. But we'll share more next week.

Next question comes from Lauren Lieberman from Barclays.

I was hoping we could talk a little bit about Baby. You called out very strong performance in the fourth quarter. And I was just thinking forward some of the headline risks or realities about the birth rate. I know that over time, innovation for Trump's birth rate dynamics, but I was just curious what you were seeing in terms of how you're projecting the category, how you're thinking about innovation in the pipeline and what may be developing from a competitive landscape standpoint?

Yes. Lauren, so one of the -- U.S. birth rate itself is of high, but you also have continued immigration. And so growth rates, depending on within the U.S. population, may be higher in certain groups and stuff. So -- but also, really, it's a global business for us, and there's opportunities elsewhere in the globe. And we have both the gear business and our care business. And we think, in the care business in the U.S., we have a lot of share opportunities with our NUK brand, and we're driving innovation to put out that temperature-controlled bottle, which has really done well, both in the U.S. and Germany. And in year, we continue -- there are still certain segments. While we have Graco's, the overall leader and had a tremendous share improvement this year, there's still more to go. So we think that there's just -- this business is a good, steady business. It's got good operating margins, good cash flow. Overall, a solid business, and we're quite confident that this will we -- continue to be a good part of the portfolio.

And the only thing I would add on that, as Ravi alluded to, we've done actually a fairly deep dive into the category growth rates. And the U.S. birth rate is not indicative of the category growth rate because of the immigration point that Ravi mentioned. What we're seeing is that integration is as big a driver in the category growth rate as the U.S. birth rate. And what we're seeing is the immigration trend is more than offsetting the U.S. birth rate dynamic so that the category is actually growing even on volume basis, because of the net of those 2 dynamics, which may be a little bit counterintuitive to those that are just thinking about the U.S. birth rate, not that you are, Lauren, but for other people haven't asked us that question.

No, that's great. It's really helpful. And just anything on innovation? Sorry, that was a kind of a category growth piece. I know we're late in the call, but I was just curious about innovation and competition.

Yes. I think, look, we're -- I talked about the slim car seat. I think that is great on the whole sensory side where -- that we launched last year, which we're continuing to look at innovating, which in terms of cradles, bassinets, all of that is very positive for us, I think that technology. So I think when you look at those, the new cradle thing that really is a Japanese-sold innovation and that came in, I think. So we're continuing to innovate. I mean this group -- and then we launched the Century brand and which has been really a great more -- it's really minimalistic, appeals to millennials is more value-based. And we think that will have a lot of traction going forward. And then we're working on a lot of innovations on Baby Docker. So that should come out in '21 and '22.

We only have time for one more question, and that's from Steve Powers from Deutsche Bank.

Appreciate it. Actually, if I could squeeze in 2, that would be great, but I think they're both relatively straightforward. First one is just as you think about '21, balancing expected store closures that you called out versus some channels maybe reopening and your own efforts to expand points of distribution online and into driving elsewhere. Can you just plan how you're expecting actual end-market consumption to trend across the portfolio versus the low single-digit core sales guidance that you issued today? I just want to square that circle, if I could.

Yes. I'll do a quick one on that, Steve, which is the -- look, as we look at our various categories, we do think, at least in the first half, which we have more visibility, there's continued growth. And I think some of these trends that came out in the pandemic, there's been a real interest. What started as home cooking as a security measure, not to go so much to restaurants, they have done them to -- from a hobby to really a home check. So I think you'll continue to see these, which brings many of the categories we compete in, are going to handle growth. And -- but importantly, we're also taking share. I mean this is the first year in '20, where we got shared in a number of categories. And Writing, we feel very good that we're pushing the share side. And second half, we'll just have to see. So I think overall -- and then I think one of the comments for some store closures which is really more of a -- it really affects 2 things, right? Yankee Candles where ourselves closing and the D2C business for us has been very strong, so it's absorbing that. And on the specialty side, clearly, that affects our Writing business. And so the commercial business is affected there a little bit. But overall, I think we're hoping that the strength that we have both in terms of our brands will -- if this category growth will grow ahead of it or it flat, we will go after share so.

Okay. But I guess if I summarize, it sounds like you're assuming that overall consumption kind of trends more or less in line with core sales. Is that fair?

Yes. Yes. I would say that's a fair comment.

Okay. Cool. And then, Chris, this is maybe something that you'll talk more about next week. But just the working capital drivers that you outlined on Slide 15, you gave us some color on your '21 expectations. But I guess just stepping back, I'm curious how you view the longer-term opportunity on those metrics and just the pacing by which you think you might be able to make ongoing improvement there. So maybe any color.

Yes, sure. So -- and you're right, I'll cover a little bit more on this next week at CAGNY. But just as background, I think 2 years ago, when I -- as I mentioned when I first showed up at CAGNY, with 2 months at the company, and I reported that we were -- our cash conversion cycle was 115 days, which had us as the worst company in the industry. And we set a goal of 70 days where we wanted to get to. And the 70 days was really based on looking at the categories that we compete in and trying to say if we could get to the median level based on our peer group, what would that look like, and that was 70. We ended this year at 72. So we've gotten there very quickly. I think the move from 115 days down to 72 has been phenomenal. I'm not satisfied with being at median. I think that we aspire to be best-in-class, not just median. And so we're working through similar to the SKU count, now that we've achieved the initial target that we've set, I think we're likely to set a more aspirational target that's more aggressive because we continue to see opportunity ahead of us for cash -- working capital takeout and cash conversion cycle improvement. Similar to SKU count, I'll share more detail on what that looks like next week when we get into the strategy discussion.

Steve, one quick follow up. Also, I forgot to mention in January, consumption, it was really looking strong and across most of our categories. And RPRS is really doing well so that bodes well.

This concludes our questions-and-answer session. I will now turn the call back to Mr. Saligram for closing remarks.

Thank you very much. We feel very good as we go into 2021. I apologize to those who couldn't get their questions. We ran out a little bit. But thank you for that and onwards and upwards.

Thank you. A replay of today's call will be made available later today on our website, ir.newellbrands.com. This concludes our conference. You may now disconnect.