Matt Farrell: Sure.
Dara Mohsenian: One follow-up there. Sorry. So HERO and THERABREATH, obviously, huge growth. Last year, you mentioned in your answer the acquisition contribution. Can you just give us a sense of your thought process in terms of growth for those two brands in 2024, maybe the distribution opportunity in the US and how big international is as you think about the growth opportunity for those two brands?
Matt Farrell: Okay. Well, I’m going to throw it to Mike to talk about international. I’ll let Carlen have a crack at how we’re thinking about it in the US.
Rick Dierker: Yes. Why don’t we give some good details on what the growth drivers are, we don’t get into what percentage growth that we’re expecting.
Mike Read: Yes, I can take that first from an international perspective, the — from a TheraBreath first perspective, I think any time you’ve got a great success story and a category grower that you take that story internationally, that holds well. And I think we’ve got a lot of proof points to that within our portfolio. I think what’s also encouraging on TheraBreath specifically is we have a very similar type of penetration success in South Korea, where the brand is equally developed. And so being able to take not only a great US story, but being able to take another market internationally and be able to take that story to the trade has been really positive. And Hero, the same thing. It’s been such a clear winner for the business. It’s a very simple thing to get. Retailers around the world are really excited about it. So both those brands provide scale and fairly easy entry points in the global markets. There’s a real demand for it. So we’re pretty excited about it.
Carlen Hooker: And then I’ll talk to the US. I would say similar story. I mean, retailers are incredibly excited about both Hero and TheraBreath. We’ve seen tremendous growth in distribution gains this past year. Obviously, based on the results, you saw that there’s a lot of runway to go on both of those brands in terms of — I mean, it’s nice to have a brand where retailers are actually calling you asking. So, we really see a tremendous potential for both Hero and TheraBreath across all channels, I would say, agnostic of channels.
Matt Farrell: Yes. And obviously, we know the resets and what the planograms are going to look like.
Carlen Hooker: Yes, we do have information on what we’re seeing in terms of the resets and what you’ll see are substantial improvements in placement, as well as additional phasings. So, a lot of space coming from both those brands.
Matthew Farrell: Okay. Rupesh, you’re up and then Chris. Bring your own microphone.
Rupesh Parikh: Rupesh Parikh, Oppenheimer. So just, Rick, question on guidance. Does your guidance incorporate any benefits from share buybacks or debt paydown? And then I have a follow-up question.
Rick Dierker: Yes, good question, Rupesh. We got ahead of our 2024 expectations for buyback. We did $300 million in Q4 of this year. And if cash continues to build on the balance sheet for an extended period of time, we would do a larger buyback at some point. In terms of debt paydown, I think at year-end, we had maybe $200 million on the revolver. We’ve already paid down another $100 million, so that’s kind of embedded in our outlook.
Rupesh Parikh: Okay. And then maybe two questions just on innovation. So Matt, you said it’s the best lineup, I think, in your 17 years. How do we think about the contribution? Because I think you previously said it’s typically a 1 to 1.5 point contribution from new products. And then the Power Sheets, any sense whether you’re bringing new customers into the franchise or whether you’re sourcing from existing Arm & Hammer users?
Matt Farrell: Yes, we’ll take that one first. So I’m going to toss that one to Barry and Surabhi as far as what we’re seeing for Amazon.
Barry Bruno: Yes, sure. Our Sheets is still in early days. We’re three or four months into launch, but absolutely new users coming in and incremental usage going on. You might use it when you’re traveling, you might use it in a vacation home, et cetera. So, still three or four months in, we don’t have the full analysis of exactly where, but yes, absolutely new. Would you add anything to that?
Surabhi Pokhriyal: Yes, it’s four months in the market, Rupesh. Got around 6,000 reviews and 4.5-star rating. The reviews are super positive. It’s a mix of people who want sustainability and care for the planet and do want to do good for people who truly like the clean are coming out of it, because efficacy was really, really important for us, and we didn’t want to do just greenwashing. But I think more to come on the analysis of how many are shifting versus new, a lot of them seem to be incremental.
Matt Farrell : Yes. Rupesh, you are accurate that historically, we’ve said that if you look at our organic growth at 1% to 1.5% is going to come from new products. So our expectation is we’re going to exceed 1.5% in 2024.
Rupesh Parikh: Thank you.
Matt Farrell : Get ready, Andrew. You’re next after Chris.
Chris Carey: Hey, Chris Carey, Wells Fargo. Just on the guidance and the phasing. So more of a back half weighted guide, totally makes sense with the front half investment. How much of that back half weighted guidance or, if any, depends on success of the innovation? Basically, what’s your visibility on the ability to accelerate? And are you anchoring to anything that you’re rolling out this year in order to hit that back half number? And then just connected to this, can you maybe give us a sense of what your expectations are for VMS this year? Obviously, some interesting packaging and advertising behind the product going into 2024. Do you expect that business to flatten out? And maybe you could also comment on your expectations for WATERPIK as well?
Matt Farrell : Yes. I’ll take a swing at VMS and you guys can prepare for the other pieces. So if we look at the category, categories really struggled this past year. If you look at the first three quarters, it was down in the first quarter, up like a point in the second quarter, down in Q3 and down 4% in Q4. So the category is still recovering from the COVID success where the categories just rocketed. We were down even more in 2023. So we’ve — as you heard today, we’re making a lot of changes there. We’d be happy with a flat year for our vitamin business in 2024. So that’s not — we’re not banking on a big recovery in the VMS business in order to hit our numbers. And okay.
