Rick Dierker: Yes, in terms of, I guess, cadence and reliance on new products to kind of hit our outlook on revenue, I would say, we give revenue ranges for a reason. And there’s lots of things in play there, whether it’s how fast our recent acquisitions grow, how fast our categories grow and competition. We’ve mixed all that together, and we’re very confident in hitting the 4% to 5%.
Chris Carey: And just one quick one as well. Just with the balance sheet going to where it is, your capacity to do deals has accelerated. 2023 is the first time in 20 years you haven’t done a deal. Can you just talk about the tension of not doing a deal, cash burning a hole in your pocket, what do you do about it? Would you just rest on that cash and make money because it’s a high interest rate environment? I don’t know where — but six months from now, we don’t have a deal. Are you starting to get anxious about that? Or just how are you thinking about that in the context of shareholder returns are number five on your TSR accretive M&A priorities. So any context to that.
Matt Farrell : It’s only been 12 months though. We did have — early on, we had a bit of a drought. I think in 2008 we acquired ORAJEL, and 2011 we acquired BATISTE. So I know we had some small deals in there but businesses we don’t talk about are very small brands. So as far as decent-sized transactions, we’ve had seen a drought in the past. And yes, I get the whole — it’s a burn a hole in your pocket, and this is — or what do you do with the cash? We did a large buyback. I can’t remember what year was. It’s quite a while ago pre-COVID where we had a lot of cash building up the balance sheet. We hadn’t done a sizable deal in a while, and we wound up increasing our authorization to buy back and we bought back more shares. So that’s always available to us.
But like I said, we looked at four deals this past year and some had pretty good economics but we just didn’t think long term that they were going to be able to be sustainable. So no, we don’t ever get deal momentum in the company. So we — like I said, we’re really fussy. But we do recognize the fact that we have an unlevered balance sheet. It’s pristine. We could be building up a lot of cash if we don’t do that. So this time next year, we haven’t done a deal. Obviously, we’d be looking a lot harder at buybacks.
Rick Dierker: Yes. The only thing I would add is we’re in a great position, like we never chase after a deal just to do a deal. And we say no a lot. We have a lot of rigor around that. This team on the stage spends a lot of their time doing due diligence, and Brian leads that in a big way. So when you have a great performing business, you’re never forced to reach for a deal. And so we — again, just the rigor around that. So we’ll let the cash build, as you said. If it builds for a period of time, then we’ll look at doing a buyback. Meanwhile, at 5% or 6% interest, it’s fine to be in the balance sheet.
Matt Farrell: And you might be encouraged by the fact that we’ve doubled the size of our M&A team. So for — so I joined in 2006, and Brian joined in 2006. And in 2023, we added another person.
Rick Dierker: We’re very lean. Matt, you might one-up that. We’re tripling it in 2024 with our European footprint.
Matt Farrell: No, that’s true. We’re in the hunt to hire somebody in Europe and also in Singapore or in Asia Pacific so we get deal flow outside the US because historically, it’s more US-centric, our focus, but it is true. And this is — by the way, this is the team that goes through the diligence meetings. All the gray beards, old people with better experience. And so Brian is very grateful. Okay. I think that Andrea was going to be next, then Peter.
Q – Andrea Teixeira : Thank you. Andrea Teixeira from JPMorgan. So my question, Mike, I have a question on the organic growth into 2024 and then one on follow-up on M&A. First on the organic growth for 2024. I understood you mentioned, Rick, two-thirds coming from volume. So if my math is correct, it’s about 3% volume growth for 2024. And with your — and so kind of like with your cadence of EPS being zero in the first half and the first half is the easiest comp for volume, can you walk us through, number one, point A of that question, getting HERO and THERABREATH and all of those with more ACV? And then having the easy comps for VMS and then the launches of laundry, how we should be thinking of that cadence for organic volume? And then the follow-up on M&A is that like what are the categories that you believe you should better buy growth over greenfield? Thank you.
Matt Farrell: I’ll do the M&A one, so is your question of what categories would be focused on?
Q – Andrea Teixeira : Yes.
Matt Farrell: Yes. Well, I mean, look at the — you can only buy what’s for sale. And we venture into lots of different categories. We will not venture into devices. But we look at household or personal care. Again, it has to be how good is the brand? How good is the brand equity? The economics obviously matter, but what do we bring to the table? Are we a good owner? So we have a pretty wide lens of the types of brands and products that we’ll look at. But again, it’s got to be a fast-moving consumable. But we don’t have — we don’t target. It’s one thing we don’t want to. So Brian doesn’t spend all day long, looking at categories and say, wouldn’t it be wonderful to own that brand? Yes, but they’re not for sale. So we don’t spend any time on those PowerPoints. What we want to make sure is that we’re in the deal flow that anything sets for sale, we know about. So we can look at it. That’s most important.
Rick Dierker: Yes. In terms of cadence for organic, it’s pretty — our expectation is pretty consistent throughout the year, right? Our outlook is 4% to 5%. Our Q1 number’s 4%, but in general, it’s pretty consistent throughout the year. There’s lots of things underneath that, whether it’s comping round two of concentration in laundry and when that happened, whether it’s the vitamin category and assumptions and — so there’s a lot of puts and takes. But I’d say in general, it’s a pretty consistent growth throughout the year.
Matt Farrell: Okay. Peter, you’re next, so let’s keep it at that table we have to…
Unidentified Analyst: Maybe just following up on the phasing but more on the gross margin side. So 50 to 75, still above your new evergreen target, but just in the context of exiting the year with 200 basis points-plus, can you maybe just give us a sense for how we should be thinking about gross margin expansion kind of through the year? Is it more front half weighted versus back half? Just any color there. And then last year, you delivered upside, like sales came in better, gross margin came in better, but you chose to reinvest some of that back into marketing. If that were to play out again this year, how should we think about the balance of reinvestment versus dropping more of that to the bottom line?
