Good morning, and welcome to Newell Brands' Second 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 your questions. [Operator Instructions]. As a reminder, today's conference call 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, Vice President of Investor Relations. Ms. Tsinis, you may begin.

Thank you. Good morning, everyone. Welcome to Newell Brands' second quarter earnings call. On the call with me today are Chris Peterson, our President and CEO; 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 Web site 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 Chris.

Thank you, Sofya. Good morning, everyone, and welcome to our second quarter call. Second quarter results were in line with or ahead of our projections on all key metrics. As expected, top line results were pressured by normalizing category trends, constrained consumer spending on discretionary products and retailer inventory destocking. Operating margins, earnings per share and cash flow were all well ahead of expectations as we made meaningful progress on productivity initiatives and working capital reduction. While our results met or exceeded our expectations for the quarter, on an absolute basis, we aspire for significant improvement going forward. That is why we recently created and deployed a new corporate strategy based on a comprehensive companywide capability assessment with an integrated set of where to play and how to win choices. We're very excited about the clarity this work is bringing to the business and the value creation opportunity ahead of us. But we also recognize that the path forward will not be a straight line. During our first quarter earnings call, we laid out five key priorities for fiscal 2023 which are all progressing nicely. Let me say just a few words regarding each of them. First, starting with an operating cash flow. Year-to-date, we have driven a year-over-year improvement of over $700 million, largely by right sizing our inventory levels through improved forecasting and supply planning processes. Second, gross margin performance improved sequentially behind our ongoing fuel productivity program and Project Ovid which you will recall completely transformed Newell's domestic go-to-market operations. We are on track for a record high year on productivity savings across the supply chain. Third, Project Phoenix is simplifying and strengthening the organization by leveraging scale, reducing complexity, streamlining the operating model and driving operational efficiencies. The program is pacing well, and is on track…

Thanks, Chris. Good morning, everyone. As Chris indicated earlier, our Q2 results continue to reflect the significant macro-driven top line pressures we have been contending with since the third quarter of last year, namely soft consumer demand as inflation continued to put pressure on discretionary spending and subcategories continue to normalize, along with trade inventory destocking and the bankruptcy of a major retailer. Thus, while the 13% contraction in net sales of $2.2 billion and the 11.9% decline in core sales might on the surface be discouraging, we believe a more thorough examination shows the interventions we have made to improve the underlying structural economics of the business and strengthen operating cash flow are working as intended. For example, normalized gross margin and operating margin both improved sequentially due to enhanced productivity efforts and Project Phoenix savings, which were critical in helping mitigate the significant 400 basis point headwind during the quarter from inflation. Nonetheless, Newell's normalized operating margin contracted 490 basis points versus last year to 9.1% as normalized gross margin declined 320 basis points versus last year to 29.9%. And top line softness resulted in 160 basis point increase in the normalized SG&A sales ratio. In addition, during the second quarter, net interest expense did increase $21 million to $76 million, reflecting overall higher debt and interest rates versus year ago, but the decision to right size the dividend in a nearly $700 million year-over-year reduction in inventory allowed us to lower debt levels versus last quarter by nearly $300 million. Our effective normalized tax rate of 13.7% was slightly below a year ago, which when combined with the other elements we just reviewed, brought normalized diluted earnings per share in at $0.24, which was considerably better than the $0.10 to $0.18 outlook we had previously provided. Turning…

Certainly. [Operator Instructions]. And our first question coming from the line of Bill Chappell with Truist Securities, your line is open.

Thanks. Good morning.

Good morning, Bill.

I guess trying to understand the front-facing moves right now and in terms of it's looking more or sounding more with brand managers and focus on core brands, kind of a P&G model. And I guess historically, a lot of the Newell's categories don't have a whole lot of marketing or advertising or promotional support. And so it was kind of deemed as not always that necessary. So I'm just trying to understand going forward, you're going to be stepping up and doing more merchandizing, marketing, stuff like that when a lot of your competitors won't. And so I'm just trying to understand how useful this will be. It certainly will help, but how you kind of looked at the categories when applying this model to it?

Yes. Let me try to provide a little bit of perspective. One of the things that we identified when we did the capability assessment was that because we're coming from a place where every business unit and every category was operated sort of independently, we did not have centralized standardized processes and approaches on the frontend capability like we've been driving over the last four years on the supply chain and the backend. And so when you look at the company's performance, you can see pockets of good performance. So if you look at the most recent periods, we're growing market share on brands like Sharpie, on Rubbermaid, on Expo, on Crockpot, but we're not growing market share on a wide swath of other brands. And we believe the reason we're not growing market share broadly across the company is because we don't yet have the capability in place on consumer and customer understanding, innovation, brand building, brand communication and retail execution consistently across all parts of the portfolio. We do believe, because we're starting from leading brands, in our top 25 brands over two thirds of them are leading brands in the categories in which we compete. We do believe that this model applies broadly. We've seen examples based on all of the businesses that were in. The people that are growing market share are in fact applying this model. And so we think as we begin to drive and standardize and build this capability more broadly across the company and apply the same amount of operational rigor to it that we've done over the last several years on the supply chain and the back office, we think we can have a meaningful inflection point in terms of getting to a more sustainable top line growth algorithm.

Got it. And I can't remember if I'm allowed to follow up, but I'll ask one anyways. Mark, can you just maybe give us a breakdown in terms of the guidance what like Buybuy Baby, what the change in terms with retailers in terms of inventory, just kind of roughly how that's negatively impacting in buckets the guidance for the top line for this year?

Yes, let me help you out with that. So you might get a little bit more than you were anticipating here, but let's be clear on this point. So our prior range was $0.95 to $1.08 and we said we'd be towards the lower end of that range. So let's just take $0.95 as the starting point. From there, Chris enumerated a number of items that are going to lower our sales in the back half. So I won't repeat those here. But that's obviously fairly consequential. Along with that, we have chosen to take our inventory levels even lower in order to ensure that we can maintain our cash flow range for the full year. In addition, we have some capability investments that we are making, which recited some A&P investments that we talked about as well. And then there's a little bit of other items in there that are kind of mixed related. Those items are only partially offset by the meaningful progression in our programs related to costs takeout. This year will be an all-time high. We actually expect to take out about 6% of COGS through the fuel initiative programs that we have in place. And then there'll be a little bit of resin held, a little bit more transportation, a little bit of positive FX in the second half of the year. So taking all those elements together, that will take you from roughly $0.95 let's call it down to $0.30. And then we have a tax benefit that we have contemplated and put in that's worth roughly $0.15. That brings you to $0.85, which is the midpoint of the new range that we provided of $0.80 to $0.90.

And Bill, on the top line, of the three factors I cited, I would say that the student loan repayment and the more conservative stance on discretionary products as the first item, and the direct import to domestic shift are the two biggest of those items. The Buybuy Baby is a little bit smaller relative to the top line guidance change.

Got it. Thanks so much.

Thank you. And our next question coming from the line of Olivia Tong with Raymond James, your line is open.

Great. My first question is on gross margin. You gave a lot of detail on the changes to your sales outlook, but hoping to get some color on gross margin, which continue to show some sequential progress. And assuming you continue to see that sequential progress, should we expect it to turn positive in second half? Is that a fair assumption? And if so, could you talk about some of the drivers that better underlying that? Thank you.

Yes, thank you. We feel really good about where we are with gross margin right now. If you looked at our first quarter results, gross margin was roughly 27%. And the print that we just issued, gross margin was 29.8%, so meaningful progression. And as we think about the first half versus the second half dynamics, we're very confident that the second half gross margin will be several hundreds of basis points higher than where we were in the first half, probably 300 to 400. What's driving that is a fuel productivity program that has been placed for a number of years now. But that program has only increased in its intensity now that we have consolidated the supply chain behind the Phoenix organizational changes. We are literally on pace to take about 6% of COGS out of the gross margin line this year alone, which is quite important, because we're still dealing with a lot of the after effects of inflation. Inflation in the first half of the year is probably running around 400 basis points, but negative in the second half, we think it'd be more like 100 basis points of compression because of inflation itself. The other things that we're doing that we talked about in the past are DC consolidation work where we're going to be going from effectively call it 1.9 million square feet of space down to maybe 1.5. The network might go from 30 DCs down to something more like 20. We talked about it in the script the fact that we have just recently done a four wall cost assessment that will save on an annualized basis over $50 million by getting after overhead -- in plant overhead and indirect operational elements, along with some direct shifting crews. And there's just a whole range of other things on the [indiscernible] side that we're also getting after. So we feel like the productivity program is only gaining strength. And that's one of the reasons we feel good about gross margins. Also, there's a lot of other things at play, like the pricing effect that we just put in 471 [ph], which will bring a bunch of additional pricing into the second half. So we feel very good about where we are with gross margin. I think as you know, we've had a gross margin compression every year since the Jarden acquisition. And this is the year that we're hoping to turn that around.

Got it. Thanks. And then given your updated views on resource allocation across brands and categories and geography, can you give us some idea on whether there are brands that are potentially seeing more spend rather than less, and then the level of divergence you're expecting versus where it currently stands on the brands that are going to see less support?

Yes, we are -- as part of our plan, we are spending more money on A&P. So the A&P spend that we planned in the back half of the year is up versus last year and significantly up versus the front half of this year. And it is disproportionately focused on our leading brands. So for example, we feel -- and part of the reason we feel very good about the back-to-school period, which we're just entering, is that our customer service results have improved markedly, as Mark mentioned, from fill rates in the low 80s to fill rates in the mid to high 90s on the writing business. We've had a terrific sell-in and back-to-school. The writing business -- despite the core sales for the company being down in Q2, the writing business was up in Q2 on core sales. Our share of retailer assets is improved this year versus prior year. And because of that, we are planning to spend more money in A&P this year than last year against that, because we believe we're well positioned for the season. We obviously haven't seen consumption yet. But we believe that's a good use of investment dollars. At the same time, we said when we rolled out the strategy that we have 80 master brands and there's 25 that represent 90% of the sales and profits that we're going to be focusing on. So at the same time, we are de-prioritizing spending on those bottom 55 brands, because we believe the return on investment is much higher on the top 25.

Thank you.

Thank you. And our next question coming from the line of Andrea Teixeira with JPMorgan, your line is open.

Thank you. I wanted to go back to what you just said to Olivia's question on the 55 brands, Chris. And of course this company has been through a huge transformation in kind of optimizing and selling brands and doing all of that amid all kind of deleveraging that you went through. I wonder if there is any thoughts to be made on some of those brands being divested. And conversely, I would just want to think about like was this sell like some of the -- as you go through this or this is something that you're going to reassessed post all this transformation process that this project are still giving you and starting to give you this year. And then on your comment and just a clarification, your comment about back-to-school, of course you haven't seen consumption yet. Is this category also going through in your view some of the reductions that retailers have been going through for inventory or this is pretty much more immune given that this still -- is still positive impacts on reopening and office and all of that? Thank you.

Yes, so let me start with the back-to-school question. The writing category is a little different. It is not going through the same dynamics on retailer destocking, consumer discretionary, pullback, et cetera. The writing business is much more normalized. We feel very confident that we are set up to gain market share during this back-to-school period, depending on which projection you look at. Some people project the writing category to be slightly down versus last year. Some people project it to be flat and some people to be up slightly. I think we're trying to take a middle of the road view on that. But we're very confident that we're set up very well to gain market share during the period. On the 55 brand question that represents 10% of the company's sales and profits, I would put those 55 brands into three buckets. The largest bucket of the 55 are brands that we are going to continue to sell. But we just are going to support less, so to speak, in terms of innovation resources. We will continue to support them fully in terms of sales resources, but we think our innovation resources, our A&P dollars are better spent on the top 25 than this other category. So consider that sort of a milk [ph] type column, if you will, for those brands. There's a second category of brands that we are going to proactively look to discontinue. And these are brands that represent a very small percent of the company's revenues and profits, and frankly are a distraction. And we believe we're better off just delisting them because we don't believe they're saleable. We don't believe they're significant. And we don't think it's worth it to even go through the effort of trying to sell them. So there'll be some brands in that category. And then there's a third category where we're going to look to do something different. And that could be a divestiture or a licensing type opportunity. That'll be a small subset. I don't think you're going to see massive change like we've had in the past from an M&A divestiture standpoint. That is not our strategy. We believe that we have a strong portfolio. We just want to focus our efforts and our resources on the biggest brands that are market leading, which represent 90% of the sales and profit of the company.

And Chris, just a follow up on that. So thinking about the 10% headwind that eventually we're going to see happening, of course we don't know the size of each of the buckets you just described. But assuming that there's like, call it mid single digit potential headwinds if you were to simply delist some of these to your second bucket or potentially sell, like is that something that we should be worried about into 2024 that could be a headwind or you're going to manage these gradually?

Yes, I think we're going to manage it gradually. I don't expect it to be that high. I think, could there be a period in the future where we have a low single digit headwind from this? Possibly. But I think this is going to be an over time thing. I don't think it really will rise to a mid single digit type level in any given year.

Thank you.

Thank you. And our next question coming from the line of Peter Grom with UBS, your line is open.

Thanks, operator. Good morning, everyone. So thank you so much for the color on the building blocks for guidance this year. But I was just hoping to understand the implied ramp in the fourth quarter just in terms of operating margin, it just seems -- the outlook implies several hundred basis points of operating margin expansion. So you sounded quite optimistic on gross margin. So can you just unpack that or what's implied in the fourth quarter a bit? And then back in June, you kind of mentioned core sales below algorithm, operating margin expansion on algorithm for the next year, I think it was 12 to 18 months, but just seems that the exit rate would be implying something well ahead of that. So is there anything specific about 4Q that we really shouldn't be extrapolating in terms of thinking about operating margin expansion into next year? Thanks.

It's a great question. So look, I guess this is what I'd offer and this is what I would say. Without getting bogged down in quarter dynamics, as we think about the first half versus the second half, and as I just mentioned earlier, we think gross margin is going to continue to grow sequentially through the balance of the year. And we actually expect the second half gross margin to be roughly 400 basis points above the first half for all the reasons I cited, the fuel productivity efforts and everything that's going along with it, the pricing effects that are in place, there's some normal business seasonality where we tend to have a slightly higher percentage of our total year sales in the back half. We think the trade destocking will abate as we go further along. Our comps get easier. We have more in the first half than the second half. There's a whole litany of reasons why we're very, very confident that we have that progression right. With gross margin growing so strongly, we also see operating income percent of sales following along as well. And we have that roughly the same amount by about 400 basis points. One of the things I think is notable as we talked about the capability investments we're making, I think we've demonstrated the ability to affect cost in a very positive way and you're seeing that through the gross margin line. If you think about what we're doing as it relates to overhead, however, overhead dollars in the first half versus the second half will be roughly comparable, because we're choosing to make investments in talent upgrades, change management capabilities, process improvements, data and technology enhancements. And then on the A&P side, you heard Chris mentioned it earlier, we're…

That's super helpful. And then, Chris, I just had a question on visibility. Kind of the second straight quarter here where things are moving a bit lower, particularly around the core sales outlook and you've historically been very pruning. So I guess I just -- has visibility improved to the point where you feel like you can kind of get back to that conservatism, if you will, in the outlook so that we don't really see another call down or does it still remain a bit murky?

Yes. What I would say on visibility is it is a challenging visibility period, primarily because we're dealing with the normalization from a once in a lifetime pandemic of COVID, we're dealing with this massive inflation that's starting to come down and the impact that that's having on consumer purchases, we're dealing with retailer patterns on inventory that are unusual in nature as a result. The visibility is getting better. I will say that we were encouraged that we came in right in the middle of our top line guidance range for Q2 on core sales growth. So we hit the mark on the Q2 guidance. Obviously, the further out you go, the more challenging it is to provide top line guidance. The thing that we're focused on is what's in our control? And we are moving at pace on the capability investments. We have brought in new talent, a President of Brand Management and Innovation, a new Head of Consumer Insights. We've changed our leadership in the outdoor and recreation segment. And we have chartered projects specifically to go after improvement in the areas we talked about, consumer and customer understanding, innovation, brand building, brand communication and retail execution. And we are driving a pace on that. And we believe that those things will play out over the next 12 to 18 months. They're not going to happen immediately, because these things take some amount of time. But when we -- the thing that we're excited about is as we begin to make those improvements, when you couple that with a very high performing supply chain and back office organization that's delivering record cost takeout levels, we're very optimistic about where we can take this business over the next couple of years.

Thanks so much. I'll pass it on.

Thank you. And our next question coming from the line of Lauren Lieberman with Barclays, your line is open.

Great, thanks. Good morning. I know it might seem crazy to want to look way further out at this point. But I guess I was just curious, you guys have talked about evergreen 50 basis points on average margin expansion. But what about the conversation kind of longer term P&L benchmarking, because I understand unequivocally the opportunity that could be ahead in terms of positive operating leverage with all the structural costs takeout that you're doing, getting to a more stable and stronger and predictable top line. But I'm just kind of not sure how to think about the reinvestment and capabilities as well. And so even like if I look at just playing with my numbers right now, if I look at general expense, like should I be thinking about '24 as kind of reaching a benchmark level of proper investment in the business. And that you're making that step change this year or I guess over a four quarter period probably, or does that keep building? So just anything you can offer on maybe longer term benchmarking on structure of the P&L would be helpful if you're willing to go there. Thanks.

Yes, let me try to provide a little bit of help. So let me start with '24. I think in '24, we're likely to have -- we've got a number of things that are effectively one-time in nature in '23 that should allow '24 to be a bit of a bounce back year in terms of operating margins. And I'll just give you a few of them. Inflation, which is significant particularly in the first half of this year, largely because of capitalized variances that are rolling off, should be behind us. And as a result, based on what we're seeing today, we expect inflation to be a much smaller number and '24 than it was in '23. We also expect fixed cost absorption to be a materially smaller impact in '24 than '23 because recall that this year, we're dealing with the revenue decline plus we're taking inventory down on top of that. And so that fixed cost absorption number is somewhat one-time in nature. We also mentioned that our productivity is ramping up and we've got a very strong funnel that we believe is going to continue to drive very strong productivity next year. In addition to that, this year as we're reducing inventory, we are being aggressive on what we call excess and obsolete inventory so that we end the year with a clean inventory level and some of that excess and obsolete inventory we are liquidating at a discount that we don't think we'll have to do as we head into next year as we've gotten our inventory levels better. And then obviously, the retailer inventory destocking is somewhat one-time in nature. And so all of those things would tell you that in '24, we should have an above algorithm year certainly on margins. And that's what we're shooting for. I don't believe that '24 is the end of the margin story though. I think we have a significant opportunity going forward to continue to build operating margins for the next really three to five years. Because a lot of the front-facing capabilities that we're putting in place is also in addition to getting top line growth going, going to get margin going. Because when you develop category driving innovation that is focused on large leading brands that is targeted for the MPP and HPP segments, which our strategy calls for, those tend to be gross margin accretive initiatives. And that is our strategy. And so as we put this consumer-facing capability in place, we believe that our innovation pipeline will get stronger. We believe the innovation pipeline will lead to better category growth, better market share gains and gross margin improvement from a mix standpoint. And so all of those things have us confident that the longer term margin opportunity in this business is significantly higher than where we are today.

Yes. And Lauren, if I could add just one point to that, it makes relevant. We had gross margin right around 30% in Q2. We talked about the fact that the second half is going to be considerably stronger for the reasons that Chris just reiterated. So our exit rate will be several hundred basis points beyond that. And that's when we're still operating 46 manufacturing sites, with capacity utilization frankly now given where we are probably in the low 30s, 90% of which are single sourced and many of which aren't in the right geographic locations to really optimize the global supply chain. So we think we have tremendous opportunity on the cost takeout side as well as all the innovation that will be brought forward, there'll be more MPP, HPP to push that meaningfully forward which will give us I think the ability to spend more in A&P, also expand our operating margins considerably over time while we get more efficient on the overhead line as the sales revenue starts to come back to us. So we feel very good about the proposition of us monetizing this business over any reasonable period of time.

Okay, thanks so much. It was really comprehensive. I appreciate it.

Thank you. And our next question coming from the line of Stephen Powers with Deutsche Bank, your line is open.

Thanks very much. Okay, so everything you just articulated makes good sense to me and is exciting. I do want to kind of circle back to what Peter was asking about in terms of the commentary a few months ago about the next 12 to 18 months not being a straight line. Everything Chris and Mark you just described about exiting '23 and then the bounce back year in '24 seems to run counter to that next 12 to 18 months being a lot more grounded. So maybe it's just a change in kind of macro assumptions, but just seems like a very different message as to how we think about back half '23 and '24 grounded in June commentary versus grounded in your recent commentary. So if you can just square that circle for me.

Yes. If you step back, I think that -- we're trying to drive significant capability and improvement in a turnaround situation that the company is in, in a tough macro context that is hard to predict. And when you put those things together and you say, the macro environment currently is a headwind, we think it's going to turn to a tailwind or at least moderate, but it's hard to predict exactly when that's going to happen. We know that we're on the right track from the strategy that we've just deployed six weeks ago. But we also know that it's going to take time to drive these capability improvements, because they are significant changes to the way the company operates. And we're moving the company into a new operating model with Project Phoenix. And so it's hard to predict exactly which quarter do those capability investments show up. We're very confident that they show up in the financial results two to three years from now. But whether they show up next quarter, the quarter after or the quarter after that is hard to predict. And so I think the message that we were trying to deliver on the path forward not being a straight line is we believe that the line is going from the lower left to the upper right. We just don't know -- I can't tell you on a quarter-by-quarter basis exactly what the slope of that line is going to be. But if you look back a couple of years from now from where we are today, we believe that we're going to have seen significant and material improvement in the performance of the company.

Right. And if I could add one thing. And during that period, when we say core sales growth will be below the evergreen targets, because of obviously all the reasons that we've been discussing today, we were saying that look, cash is going to be our top priority and it's going to be moving forward above our target, and this year we're going to probably be 100% free cash flow productivity or better. And then the operating margin expansion is going to continue in part because the gross margin takeout is so big and so extreme, and we're very confident that it's going to come to pass. So we feel like over the next 12 to 18 months, sales might be a real challenge but margin will progress and cash will be our focus.

Okay. And I guess is there -- as part of the strategy, there was a lot of top line accelerators over the course of time and kind of margin expansion drivers. I guess I'm -- maybe at this point, is there kind of like a time order prioritization of where you think it's kind of more the low hanging fruit is versus more of the kind of longer term aspirational elements of that. But then as we go forward, do you anticipate we'll take some kind of scorecard against those we can track progress? Or how are you thinking about both achieving them and also kind of communicating your progress as we go?

Yes, I think it's a good thought. And we obviously have an internal scorecard that's very detailed that we have just sort of put together. So once we finalize the strategy, we effectively chartered capability improvement projects with clear KPIs, owners, timelines against each of them. And we are pursuing all of them simultaneously. They have different timelines relative to the execution. So the consumer and customer understanding capability improvement plan and timeline, for example, looks different than creating a brand management organization timeline. And so we will endeavor to provide some more clarity on that as we go forward. I think we're at the place where we've commissioned all the projects. We have owners. We have timelines. We have a clear plan. And we're off and running. We're not delaying on any project, which is why I mentioned in the prepared remarks that the pace of change that the company is accelerating dramatically, because we're taking on a lot in terms of capability improvements. The last thing I would say is that if you were to rate how difficult is it to do these capability improvements. Typically, when you think about capability improvement, oftentimes people think about changing the people, the process, and/or the technology. We've made dramatic improvement in the supply chain and in the back office and simplification that we've been talking about over the last couple of years, whether it be the ERP systems, the IT applications, the fuel productivity program, the SKU count, et cetera. All of that has gone well. That actually is harder to do than what we're talking about on the frontend. And the supply chain in the backend, oftentimes there's a meaningful technology component that is required that takes longer. In the frontend, it tends to be more people and process focused. So it doesn't mean it's easy, but it can happen faster. And so we have charted the projects and the owners on aggressive timelines to begin to make progress.

Okay. Thank you very much.

Thank you. And our last questioner comes from the line of Filippo Falorni from Citi. Your line is open.

Hi. Good morning, everyone. I know we covered a lot of ground. I just want to add maybe, Chris, you clearly announced a lot of strategic changes is coming on. The more recent changes on the frontend, kind of the restructuring programs, change in capital allocation. Any other areas where you think like there's more focus on your end, like in terms of potential further changes in the organization that we should be thinking about?

I think we're at a point where -- with the operating model change, with the capability assessment and the new strategy we've deployed, we're at a point where I think we've done all of the strategy work from a company standpoint at this point, or at least we've got the 90 for the 10, let's call it. Our focus now is shifting to drive that strategy into execution. And rather than sort of debate the strategy at this point, we think we've got the right strategy. And a strategy doesn't really come to life unless you execute it at the point of attack. And we need to drive that strategy and execution. And that takes time because you have to communicate it to the segments, you've got to communicate it to the geographies, you have to communicate it to the functions, you've got to make sure that as you're cascading that strategy throughout the organization, it ultimately gets into every individual's work plan. And as you do that, you begin to change the trajectory and the direction of the enterprise. And so I don't expect that we're going to have significant changes in strategy at this point. I expect what you're going to hear us talk more about is our progress at driving the strategy into action and execution.

Great. Thank you. That's helpful.

Thank you. 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 Web site at ir.newellbrands.com. You may now disconnect. Everyone, have a great day.