Good morning, and welcome to Newell Brands' First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After a brief discussion by management, we will open up the call for questions. [Operator Instructions] As a reminder, today's conference call is being recorded. A live webcast for this call is available at ir.newellbrands.com. I will now turn the call over to Sofya Tsinis, Vice President of Investor Relations. Ms. Tsinis, you may begin.

Thank you. Good morning, everyone. Welcome to Newell Brands' first quarter earnings call. On the call with me today are Ravi Saligram, our CEO; Chris Peterson, our President; and Mark Erceg, our CFO. 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, and we undertake no obligation to update forward-looking statements. I refer you to the cautionary language and risk factors available in our earnings release, our Form 10-K, Form 10-Q and other SEC filings available on our Investor Relations website for a further discussion of the factors affecting forward-looking statements. Please also recognize that today's remarks will refer to certain non-GAAP financial measures, including those referred 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 that were furnished to the SEC. Thank you. And now, I'll turn the call over to Ravi.

Thank you, Sofya. Good morning, everyone, and welcome to our first quarter call. I'll keep my remarks brief. As Chris and Mark will take you through our results and outlook for the balance of the year. This is my last earnings call with Newell Brands. As many of you know, in February, we announced that I'll be retiring on May 16 and Chris will take over as the next CEO of the company. This is a historic event for us, as Chris will be the first Internal CEO successor in Newell’s recent history. In fact, in the last two decades and it's a testament to well thought out, well planned succession planning process. Over the past several months, our partner closely with Chris to ensure a seamless, smooth and orderly transition as well as a successful execution of Project Phoenix. I'll also spend time in our international markets and I'm encouraged by the long term opportunities for our key brands. I'm confident that Chris, along with the world-class management team, we've assembled over the past couple of years will get us through this difficult environment and take Newell to the next level. While the macro environment has put considerable pressure on our business, I'm optimistic about the future of Newell brands. Over the past several years, we've come together as One Newell, but we are still in the early stages of truly leveraging the scale of the company. We have a strong world-class executive leadership team with great brands that consumers love. With both e-commerce and omni-channel prowess, we have excellent customer relationships and are reigniting the processes and passion to drive meaningful innovation. Our team has done a superb job on systematically reducing complexity and we are gaining momentum on driving operational excellence through Project Ovid and automation. Our talented employees are our number one asset, and we are grateful for their continued efforts resilience and dedication, as well as their support and execution of the change agenda we've implemented as part of Project Phoenix. Phoenix is not just about efficiencies and cost savings. It is truly a new operating model. I'd like to thank our employees for their trust in me and thank the entire leadership team. It has been a distinct honor and privilege to lead the company over the last several years. I'm confident that our best days are truly ahead of us, onwards and upwards. And I now turn over to Chris.

Thank you, Ravi, and good morning, everyone. First quarter results were largely in line with our expectations. As anticipated, this was a very difficult period for the company to top and bottom line under significant pressure. The headwinds Newell faced in the back half of 2022 from normalizing category trends, constrained consumer spending in discretionary categories, retailer destocking, fixed cost deleveraging, inflation and foreign exchange persisted into Q1. However, there were several bright spots, including stronger cash flow performance relative to last year. During Q1, we also continued to build operational excellence across the organization and made meaningful progress operationalizing the distribution and transportation benefits associated with Project Ovid and implementing Project Phoenix. Let me provide additional perspective on both initiatives. As you may recall, on February 1, we implemented the second go-live wave of Project Ovid across the remaining food categories as well as the Writing, Outdoor & Recreation and commercial businesses. The conversion has been very successful and our distribution and transportation organization is now fully centralized. We are currently operating in the new go-to-market model, utilizing both East Coast and West Coast ports via a nationwide multi node network of mixed distribution centers including the two new DCs we stood up in Pennsylvania and North Carolina. While it's still in the early days, we are beginning to realize benefits from the new model and in the first quarter, we meaningfully improved fill rates relative to last year, reduced delivery times and have a clear line of sight to cost efficiencies. First quarter represented a crucial period in the implementation of Project Phoenix, which is expected to simplify and strengthen the organization by leveraging our scale to further reduce complexity, streamline our operating model, drive operational efficiencies and unlock significant savings. Although, there is certainly a lot more…

Thanks, Chris. Good morning, everyone. Let's jump straight into our Q1 results, which were largely consistent with going in expectations, with core sales and normalized earnings per share both landing within guidance, albeit at the lower end of the range. Net sales contracted 24% year-over-year to $1.8 billion, reflecting an 18% decline in core sales, a 2% headwind from currency and a 4% impact from the divestiture of the CH&S business and certain category exits. While we are clearly not happy with an 18% decline in core sales, it does bear mentioning that this was against a particularly difficult base period comparison. Since core sales grew 6.9% in Q1 of 2022, and 20.9% during Q1 of 2021. Therefore, on a stacked basis, core sales were up versus 2019 levels. Newell's normalized operating margin contracted 820 basis points versus last year to 2.4%, as normalized gross margin declined 410 basis points versus last year to 27.1%. Fixed cost deleveraging due to a softer top line along with inflation including carryover inflation costs from last year were the largest drivers of margin pressure in Q1. These factors more than offset the favorable impact from pricing, Project Phoenix and our fuel productivity efforts, which are tracking slightly ahead of our going in expectations. Net interest expense rose $9 million versus last year to $68 million, primarily due to increases in debt and interest rates and the normalized tax benefit was $1 million all of which netted out to a normalized diluted loss of $0.06 per share for the quarter. From a cash flow standpoint, operating cash was a use of $77 million during the quarter, which while still negative was an improvement of nearly $200 million versus last year. Inventory was a big part of the improvement coming in $150 million lower than…

Yes, sir. [Operator Instructions] Our first question or comment comes from the line of Peter Grom from UBS. Your line is open, sir.

Hey, Thanks, operator and good morning, everyone. So Chris, I guess I just wanted to get your perspective on just kind of underlying category growth, but more in the context of really what's changed since we last spoke in February. You discussed discretionary spending pressures, but it seems like those were already there or occurring back in February. So just any commentary just in terms of what's really changed, where it's really got worse. And then I appreciate all the building blocks around hitting the back half guidance, but if we do go into a recession, is that outlook still so feasible?

Yeah. Sure. Thanks, Peter and good morning. From a consumer and sort of macro environment, as I mentioned in the prepared remarks, really what we're seeing is continued pressure on the consumer in discretionary and durable categories. And that's a function of inflation on food, housing and energy causing the consumer to prioritize more essential items and deprioritize spending on durable and discretionary categories. Coupled with that, our -- many of our categories have longer purchase cycles. And when stimulus money came into the market a year or two ago in a big way, a lot of consumers bought product categories that effectively took them out of the market for a period of time. And so I don't think there's a meaningful change on that fundamental dynamic, which is why we're maintaining the range for the year. I will say that we've gotten, I guess, in terms of what's changed in the last two months since we talked, specifically, we did come in at the lower end of our guidance range, minus 18% on core sales growth. That was really driven by Outdoor & Recreation, which got off to a slower than expected start to the season, primarily due to wet and cold weather in the western part of the country. We've seen, as I mentioned in the prepared remarks, one of our major retailers declared bankruptcy that we do expect to have a temporary sort of disruption in the market. We expected that on the year, but that -- the timing was not certain. And then from a retailer destocking standpoint, I think in our first quarter results, probably of the minus 18% core sales growth that we reported about half of that was underlying sort of consumer dynamics and the other half of that was really retailer destocking roughly. And so that's part of the reason why we think that retailer destocking were largely true, although we do expect it to continue to have an impact on Q2. But we think by the time we get to sort of midyear that will largely be behind us.

No. That's the problem. So just to clarify that last point, so around roughly half of the minus 18 was related to retail destocking and roughly half was just kind of what you're seeing in terms of underlying demand?

That's right. And that underlying demand, I would say is, as a result of the base period, as a result of the pressure on consumer wallets and normalization of some of the categories from COVID peak levels, but that's accurate.

Great. Thanks so much, Chris. I’ll pass it on.

Thank you. Your next question or comment comes from the line of Kevin Grundy from Jefferies. Mr. Grundy, your line is open.

Great. Can you guys hear me, okay?

Sure. Okay. Good morning, Kevin.

Hey, good morning, guys. Sorry about that. My line kind of like this for a moment. I'd like to pivot to cash flow. So better versus last year, 1Q is, of course, sort of a seasonally light quarter and typically tends to be a cash use for the company. How did -- so a few questions, all pertinent. Number one, how did cash flow come in relative to your expectations for the quarter? Number two, what's kind of the visibility or the level of confidence you have on the $700 million to $900 million? I think the comment was around guidance broadly, it's appropriate and reasonable. I'd sort of push a little bit and say, is it conservative? And then lastly and certainly importantly, given where the dividend yield is, maybe just some updated thoughts on ability to fund it. And I think when you kind of look at the guidance a little bit and look at where CapEx could be, if you kind of come in at the low end of the range, you're kind of right there. There's not a lot of wiggle room to fund the dividend. So I think an understanding it's a Board decision, I think some your updated thoughts there would be appreciated. So thank you for all that, guys. I appreciate it.

Let me jump in and help with the cash flow piece, and then Chris can talk about the second part of your question. So in Q1, you're right. It's always a cash take quarter, but we did have really good progress there, basically being up about $200 million year-over-year. If you want to get into the bridge items that relate to that, the biggest part of it was better working capital performance that was about $400 million better, almost all of that was driven by inventory. We did have a lower incentive comp payment, cash payment for incentive comp for management that was about $100 million. Lower operating income was probably a $200 million (ph) differential negatively year-over-year. And then we had several items that combined for another 100 downturn, which was the Phoenix restructuring, the Brazil tax payment and some higher cash interest. So if you do that bridge, you'll find yourself comfortably at that $200 million, which was the improvement that we saw. If you think about the full year, again, it's going to be a story of basically working capital improvement because if you look at the operating cash flow from the prior period, it was down roughly $300 million. If you take the midpoint of our $700 million to $900 million range, that puts you at $800 million (ph). So we're basically looking to bridge about $1.1 billion of improvement. And effectively, all of that comes from working capital. I mean operating income is about $100 million take year-over-year, but the working capital is the $1.1 billion positive movement with inventory being about $700 million of that and then AP and AR accounting for the balance of the differential with AR being a little bit of a hurt in AP being a pretty big size help. From where we sit right now at the end of Q1, we're expecting another $400 million to $500 million to come out of inventory throughout the course of the year. Our inventory performance in Q1 exceeded our expectations. And as you heard in my prepared remarks, the in-transit inventories already $250 million down versus the prior period. So we feel pretty good about the operating cash flow elements. We're watching it very closely, but we have a high degree of confidence in it.

Yeah. And Kevin, to your -- maybe I'll just take the question on the dividend. To your point, the operating cash flow range, which we kept unchanged at $700 million to $900 million on operating cash flow is sufficient to fund the current year CapEx and the dividend and have a small amount of debt pay down. That being said, as I mentioned in my prepared remarks, we are taking as part of the strategy refresh, we are going to look at the capital allocation strategy for the company going forward. And certainly, the dividend is going to be part of that capital allocation strategy look. And so we haven't made any conclusion on that yet, but the strategy work will incorporate a view on that and we will share that when appropriate once we've gone through a discussion with the Board.

Thank you very much. I appreciate the color.

Thank you. Your next question or comment comes from the line of Chris Carey from Wells Fargo. Mr. Carey, Your line is open.

Hi. Good morning.

Good morning, Chris.

Yeah. Just from a gross margin standpoint, right, a little bit of a step-up sequentially, but obviously, still under a lot of pressure. You're looking at taking pricing in the back half of the year now, which should give a little bit of a lift. Can you just clarify how you expect the gross margin to trend sequentially? And then just on the new pricing, I'm sorry if I missed it, but how are you factoring the macro backdrop. So if the consumer starts to get weaker, do you still go through with the program? Are you going to need to offset it with any incremental promotions if that environment seems to play out from a macro standpoint? So just how you thinking about the sensitivity of this new pricing plan that you have for the back half of the year? So things on the gross margins and the pricing.

Yeah. So let me help you on the gross margin, and I'll even help you on the operating margin line as well because obviously, the two are highly correlated. It's not lost on us that the guidance that we're providing is kind of a tale of two halves. And if you look at the operating margin in the first half, we're calling for it to be mid-single digits. And then for the back half, we're calling for the operating margin to be in the low-teens. And that obviously implies a big reversal from the first half of the second in both op margin and gross margin. But if you look at all the elements that we have in flight, I think you'll see that the splits we have are reflective of what we're seeing on the underlying trends of the business itself. So for example, if you look at the Phoenix if you look at the fuel productivity initiatives, and if you look at the net pricing that we discussed, roughly 60% of the benefit that comes from those three programs will fall into the second half of the year. Similarly, if you look at inflation in FX, roughly 70% of the hurt from those two things falls in the first half. And then, of course, you have to look at the comps on the base periods. In the first half, we're going up against plus 4% in the prior periods. In the second half, we're going against minus 10. So obviously, that's a big factor as well. From a trade destocking standpoint, we think most of our large customers are at their target weeks of coverage now. We think there might be a little bit more that kind of comes out through the second quarter. But at that point, we think we're in pretty good regard as it relates to that. We talked about normal business seasonality, where the second half historically has been just the larger dollarized value than the first half and we talked about the shift that we see in back-to-school from Q2 to Q3. And then finally, I guess, I'd offer that in Q1, we did have some additional E&O charges as we work down our inventory levels, and that actually cost us a couple of pennies on the quarter. So if you really look at the underlying pieces that drive the first half, second half splits on gross margin as well as operating margin, we think they're reasonable and appropriate. And on the pricing piece, I know Chris wanted to add a few thoughts on...

Yeah. On the pricing piece, one of the things that we did and actually when Mark came in, we initiated this work, was because we've been able to reduce the company's SKU count from 100 in 2000 when we started the SKU count reduction effort at the end of 2018 to 28,000 last year, we initiated a look at profitability and inflation impact at the SKU level in the U.S. business. And what came out of that work was that there was a number of SKUs that we had in the U.S. business that were structurally challenged and where we hadn't fully priced for inflation. And so we are -- we've announced -- we are announcing pricing in the U.S. that will be effective in the third quarter, it's largely -- it's on about 30% of our U.S. business, as Mark mentioned. It will be effective in the third quarter. And where we're taking the pricing, it's going to be sort of a range between high-single digit and low-double digit percentages. And we think it's appropriate and warranted because we haven't fully priced for inflation on these SKUs. I'll also mention that this is a good example of simplification helping us because if we had tried to look at the profitability by SKU three years ago, it would have been virtually impossible for us to do it because of the number of SKUs that we have. We’re now getting much better visibility at a much more granular level that’s allowing us to go after this. So we think it’s warranted. We think that it’s the right thing to do for the long-term health of the business. Of course, we’re going to monitor the trends carefully. As the pricing gets put into the market with regard to the consumer response, and broadly speaking, in our guidance, we have not assumed that the pricing adds to the top line in the back half. We’ve largely assumed that the pricing is offset with volume loss. And so this is more about improving the structural economics of this business than it is about driving short-term top line growth.

Thanks a lot Chris. Thank you.

Thank you. Your next question or comment comes from the line of Andrea Teixeira from JPMorgan. Ms. Teixeira, your line is open.

Thank you very much and good morning. Can you comment on what are you hearing on the back-to-school? I guess you mentioned -- Mark, you mentioned that it seems like normalized -- you're seeing normalized inventory levels. And Chris, you said the same with the retailers. But I'm just thinking in terms of the timing of shipments as well because I think it moved, as you said, last year. And if you can comment on both the Writing division as well as the Outdoor going to peak season. With that [indiscernible], what does that mean embedded in your guide for gross margin? I'm assuming, obviously, those two are higher-margin businesses. And then as we think about what's embedded in your gain in terms of the resin. I understand that you don't buy the resin directly, but you will eventually get the benefit from that as you lap the couple of months of -- in this case, in the case of resin (ph) is a substantial decline more than a year ago. So I was wondering if you're starting to see the benefit, and that's embedded in your guide? And if that anything has changed to better worse since you got the last? Thank you.

Very good. All right. Thanks, Andrea, and I'll try to hit the business unit questions and then maybe give -- let Mark get the resin question. On the Writing business and back-to-school, we feel very good in the first quarter, Writing was effectively flat from a core sales standpoint. So despite the company being down 18% in Q1, Writing was not down. And that's important because Writing is our most profitable business and Writing being flat in Q1 means that we're meaningfully up versus the 2019 base period because we have built market share during that period from 2019 until today. As we head into back-to-school, we're just in the sell-in period. As you know, we don't really get a read on the consumption of back-to-school until kind of the July, August, September period. But I will say from a sell-in perspective, retailers are planning for a pretty normal back-to-school year. I think in general, people are expecting back-to-school to be relatively consistent with last year's back-to-school. We feel very good about our plan heading into the back-to-school period because if you recall last year, we had a little bit of supply challenge on some subsegments of our business. This year, we do not have that challenge, and we are fully available from a supply standpoint and recovered. We also already have visibility to the vast majority of the back-to-school seasonal orders, and we feel very good about our in-store display positioning in the marketplace with the leading retailers. And so we are optimistic as we head into the season. Final thing I'll say on back to school and this is true for a lot of the seasonal businesses that we're seeing in our business is that because the supply chain has improved so rapidly, retailers are now not ordering…

And then as you -- relates to your question on resin, resin has been a help for us since the third quarter of last year, and we expect it to remain so for ’23. We think about COGS inflation in totality, we expect it to be low-single digit for '23 versus what was high-single digit in ‘22.

Super helpful. Thank you.

Thank you. Your next question or comment comes from the line of Bill Chappell from Truist. Mr. Chappell, your line is open.

Hey. Good morning. This is Stephen Lengel on for Bill Chappell. Thank you for taking our question.

Good morning, Steve.

Hi. Good morning. On the gross margin side, thank you for some of the color you guys gave, and sorry if I missed this, but understandably left the guidance unchanged, but kind of mentioned some fuel savings from Phoenix. Can you kind of talk more about your freight assumptions and how those have changed over the course of the past few months and kind of how do you see it evolving over the next 12 months to 18 months?

Yeah. We are seeing a noticeable drop in transportation cost. And it's really driven by a couple of things. And so I'll parse it into sort of three parts. First is the ocean freight market for inbound freight has dropped dramatically back to close to pre-pandemic levels. And I think as I've talked before, the contract years for ocean freight go May 1 to May 1, and we're seeing -- we've now concluded the negotiations for this upcoming contract year and we're seeing ocean container costs back close to pre-pandemic levels, which is a noticeable retreat from where they were last year and the year before. So that is a big positive. The second part of this is trucking cost in the U.S. And what we're seeing there is full truckload cost is coming down significantly as diesel fuel costs are coming down as well as demand for full truckload capacity is coming down in the U.S. market. And so that is -- that's another sort of tailwind. Interestingly, we're not seeing the same thing on less than truckload freight, which is remaining sort of stubbornly high. The third impact that's driving our transportation costs down is the Ovid implementation. And so as we've implemented Ovid and gone to the mixed distribution centers, we are seeing a meaningful opportunity for us to move from less than truckload shipments to full truckload shipments. It takes work to operationalize that, but we're making very good progress with some of our top retailers at driving big shift from less than truckload into full truckload. And for perspective, full truckload cost about half the amount for similar volume versus less than truckload. So if we can convert the business from less than truckload to full truckload for the portion of the business we convert, transportation cost goes down by 50% through that effort. And so that's sort of where we are on transportation costs broadly.

And then you mentioned the fuel productivity program. I just want to offer a few additional thoughts on that because it's been one of the areas that's really impressed me when I've been joining up here at Newell Brands. If you look back at 2019 and 2020, as an example, we sold $250 million averagely on CapEx during those two years. And in those two years, we spent a little less than 20% of our capital on productivity projects. If you look at '21 and '22 capital program, which was roughly $300 million, over 40% of our capital is spent on productivity projects. So the fuel program has really started to ramp up. You're seeing that through increased automation and the move that we made as part of Project Phoenix to basically bring the supply chain management to the center following on the success of Ovid gives us huge opportunities because at this point, across our 49 plants, 90% of those are single node sites. We have an opportunity to manage that much more effectively across the entire renewable network. And if you look at the $4 billion of direct and sourced finished goods, only 60% of that right now is single source, right? So 60% single source, 25% dual sourced and up 15% is dual qualified. So we have a tremendous opportunity going forward, and we only see the fuel productivity savings just increasing over time as we sit here today.

Awesome. Thank you guys very much.

Thank you. Your next question comes from the line of Filippo Falorni from Citi. Mr. Falorni, your line is open.

Just a quick follow-up on pricing. Have you -- first, what has been the reactions from your retail partner to your additional price increases? And have you also seen your competitors take prices up or are you assuming they're going to take prices up? So that's the first question. And then longer term, just in general, can you give us some sense on the path to operating margin recovery to the mid to high-teens? Clearly, you're doing a lot of progress on the cost savings front. But the external environment is essentially removing a lot of those benefits. So what do you think is the path to get to those targets? Is your time line delayed because of the macro environment? Can you give us some sense on the timing there? Than you.

Okay. Let me start with the pricing. We are just -- we've just announced or just announcing the pricing as we sit here today in the U.S. So it's too early to give a full view of the retailer reaction. What I will say is that the pricing that we're putting in place effectively today, which is about 30% of our U.S. portfolio that we're pricing on is cost justified. It is on the part of the business where we haven't fully priced for inflation. And in the past, as we put pricing in over the last several years, we've generally seen competition largely follow the pricing that we put in. Of course, we don't know what they're going to do on this one. And the reason that we believe that the competition has largely followed it's because they're seeing the same inflation cost pressure as we are. Frankly, we've been focused on not overpricing given the macro environment from a consumer standpoint because we wanted to offer the consumer great value. And we're encouraged that we are not meeting the take pricing on 70% of the U.S. portfolio because we think the pricing that we've historically put in has already gotten us sort of caught up. And so it's this 30% of the portfolio where we haven't fully priced for inflation and where the business is structurally challenged in some cases that we believe we really don't have a choice. We will monitor the situation. We, as always, work with our retailers on implementation of this. But I think the retail environment in general has been relatively receptive when you have a cost based story to accepting pricing. As you've seen from many of the other consumer product company reports that have come out over the past week or so. From a longer-term perspective on operating margin, we continue to believe that we've got a significant opportunity to improve the operating margin of this company. And we think that the opportunity is largely gross margin based, which is why we've got the fuel productivity savings going, why we've got the Ovid initiative going, the automation initiative and we're attempting to drive gross margin accretive innovation to help us mix up. We also think we've got continued opportunity on overhead to simplify the company to drive productivity across the company. It is being masked somewhat in the short term because of the top line pressure, but our guidance implies a pretty significant bounce back in the back half of the year, as Mark went through.

Great. Thank you. Very helpful.

Thank you. Your next question comes from the line of Olivia Tong from Raymond James. Ms. Tong, your line is open.

Great. Thank you. First, I just wanted to ask a follow-up on pricing. If you could talk about any SKU versus on categories that we'll see price hikes in? Any SKU in terms of more premium or more value to your products? And then as you think about, I know you mentioned that these are cost justified, but what happens if others don't follow? How comfortable are you with wider price gaps as you try to rebuild the profitability? And then I have a follow-up. Thank you.

Yeah. So we can't get into the specifics given the breadth of the pricing. But as Mark mentioned in the prepared remarks, it's largely focused in the home and commercial segment. And so it is where the majority of this analysis showed that we haven't fully priced for inflation. And in some cases, we -- because of that, we've got structural profitability challenge. I think the other thing I would say on the pricing is we'll see as we go on. What we've seen generally today is, where we priced and pricing has gone into the market, competitors have followed, but they have followed on a lag effect. And so we've been [indiscernible] by competitors. And so in the short term, this may put some market share at, risk if we're trying to go out and take a price increase and competition follows us at some period in the future. Of course, we don't know what they're going to do. We're going to watch that. The reason why we feel like this is the right thing to do is even if competition doesn't follow us, because this pricing is geared toward products that are relatively structurally challenged, not all of the pricing but significant part of it. Even if we do have volume loss, it doesn't really cost us that much from a profitability standpoint, if you will. So that's why we're convinced it's the right thing to do and we'll report out as we go along here.

Great. Thanks. And my follow-up is just -- I know we're only one quarter into fiscal '23. But as you think about sort of the exit rate and your second half growth implications. Should we expect a similar run rate at the beginning of first half fiscal '24? I mean I know the business seasonality is going to flip, but if destocking will be in the base, the back-to-school timing base is clean, commodities get better, pricing is in place. I would imagine that first half of '24 should look -- the growth rates should look pretty compelling.

We appreciate the question. We do, but we don’t think it’s appropriate for us to comment on anything related to fiscal ‘24 at this time.

Got it. Thanks.

Thank you. Our final question comes from the line of Lauren Lieberman from Barclays. Ms. Lieberman, your line is now open.

Thanks. So I know you've touched a bunch of times on the price increases coming in the third quarter. But my question was actually more about the kind of SKU by SKU analysis and kind of thinking about structural economics across the business. I was curious how much of the gaps that you're kind of seeing or other spots maybe where you're not taking pricing, but that things sort of revealed themselves to you in that work and that suggested there's kind of structural dynamics to be explored to use your own words, to free up capacity for reinvesting for having a stronger and more an innovation pipeline. But this notion of looking at structural economics across the business, I found to be really interesting. And if there are things in play that aren't just about straight pricing that helped get it that maybe on a SKU-by-SKU basis. Thanks.

Yeah, Lauren. We have the same excitement that is in your question from this work because I think one of the things that we've been building and as we've been simplifying is a much stronger analytical capability to dissect to the business on many different metrics. And that capability, coupled with the complexity reduction is what has sort of revealed this opportunity, which the company really wouldn't have been able to do a few years ago. To the question of, well, are there other opportunities? I think the answer is going to be yes. And one of the things that I mentioned in my prepared remarks is that we're going through a refresh of the corporate strategy. And as part of that refresh, we're going relatively deep on all of the different capabilities that are required to win in this industry and how we stack up versus competition. We're also using this analytics to take a fresh look at the where to play choices and the how to win choices for the company. And then what we need to do from a sort of culture, talent standpoint to enable the execution of that strategy. So I think we're pretty excited about that work. We're not through it yet, which is why we're not sharing it here today. But I do think we're going to be in a position to share that in the next few months. And it's very much based on that sort of more detailed analytic look at how the business really breaks out across a whole variety of different vectors.

The only other thing I'd add is we look at almost 6,000 SKUs in the U.S. as part of this work. We are replicating that same analysis for Latin America for EMEA. We've been building out customer P&Ls, brand P&Ls. We've been doing 4-wall plant cost analyses. I mean the analytical capabilities are really ramping up, and we think it's going to provide us with tremendous opportunities in the future.

Okay. Great. It's a good place to end the call, I think. Thank you.

Yes. Yes, it is. Thank you. Thanks, everybody for joining, and we look forward to talking to you again soon.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. A replay of today's call will be available later today on the company's website at ir.newellbrands.com. You may now disconnect. Have a great day.