Mark LaVigne: No, well, what we said was that pricing overall, I don’t think that there’s any broad-based price increases that we would talk about. There’s no incremental pricing coming through. And we’ve kind of lapped all of it heading into ’24. So we do think that we’ll reinvest some of our margin improvement back into pricing and promotional activity. And so I kind of called out on the gross margin side, you heard that there’s probably a little over 100 basis points of negative pricing drag for the year.
Andrea Teixeira: Okay, that’s super helpful. Thank you.
Operator: The next question is from Dara Mohsenian with Morgan Stanley. Please go ahead.
Dara Mohsenian: So first, just for clarity, I think I heard that you expect an incremental $80 million to $100 million in project momentum savings. Is that correct?
John Drabik: Yes, over the next two years.
Dara Mohsenian: Okay, with the $50 million plus this year, what’s driving the upside relative to your original goal and then B, of that incremental $80 million to $100 million, how much is slated to come through in fiscal ’24 versus fiscal ’25?
Mark LaVigne: Fiscal ’24 is $55 million to $65 million of savings. What drove the upside, we went into this a little bit in the last quarter’s call where we talked about adding a third year allowed us to undertake some projects from an operational network standpoint that were a little bit constrained from a two-year standpoint, but that yielded greater savings. So it’s just a few more projects that we’re able to complete in a three-year time period, and we’ve also been able to make some organizational changes from digital transformation, which is driving some of the savings in SG&A, but all in a three-year program, $130 million to $150 million total.
Dara Mohsenian: Great. That’s helpful. And then just on the battery pricing front, obviously one of the hallmarks of the battery category has been pretty consistent price increases over time. I understand why you’re not seeing that this upcoming fiscal year with the consumer and retailer environment, but can you just discuss conceptually as you move beyond this year your expectations in terms of pricing for the battery category and maybe compare and contrast that with the environment in fiscal ’24?
Mark LaVigne: ’24 feels a bit like a reset year for a lot of categories in terms of just getting back to foundational elements of category management. I would say the focus for our organization is continue to invest in the brands, continue to invest in products, both on batteries and auto care, and allow those investments to then drive opportunities for pricing going forward. Batteries has not been kind of a year-over-year price increase type approach over the years. It’s always been every couple of years there have been price increases. I would expect that to continue, but I do think we have to continue to rebase ourselves at the current level. I think consumers have to find the price points. We have to continue to normalize promotional activity and then from there you invest in brands, you invest in innovation, and that’s going to drive pricing discussions going forward.
Operator: The next question is from Rob Ottenstein with Evercore. Please go ahead.
Q – Rob Ottenstei: Great. Thank you very much. And I know you kind of touched on this in different places, but I think we’re still a little bit confused on the volume outlook. I think you’d mentioned that the holiday volume, you had a tough comp, but I think what I have is that you were down 5% in December of last year. So I don’t know if that’s correct, but trying to square that. Second, can you give us any sort of sense of kind of breakout between your shipments and your takeaways in the U.S. and internationally for batteries, kind of where those look, particularly in terms of your guidance and the quarter and then if there’s any kind of weird destocking that’s going on in any particular country or category and then tied to that, any thoughts in terms of what people are keeping at home in their pantries in terms of batteries. Thank you.
Mark LaVigne: Rob, let me start with the first point on the holiday, just so we’re clear. We had holiday shipments for this holiday that moved into Q4 of ’23, and that’s about half of the headwind that we’re seeing going into Q1. So it’s really the sequential quarters, not year-over-year on the holiday side. I think your second question a little bit was about inventories at retail. I think we’ve sold in ahead of the holidays, and I would say that the inventories that we’re seeing are relatively in line. We need to see how the sell-through goes through over the next month, really, but we feel like we’re in pretty good shape there.
John Drabik: And then on the consumer front, I would say when we’ve consistently engaged in our research with consumers, and for a period of time they were buying for immediate need, and consumers are delaying some purchases right now, which is what we’re seeing from consumers generally. They’re also using household inventory to meet current needs. But I would not say there’s an abundance of consumer inventory. If anything, it’s decreasing as they make prioritization decisions as they shop in today’s environment and so there’s not a headwind from consumer inventory levels. If anything, it could be a bit of a tailwind once the macro environment becomes a little bit better.
Operator: The next question is from Hale Holden with Barclays. Please go ahead.
Hale Holden: Hi, good morning. Thanks. I just had two follow-up questions. On the category growth comments you made, I was wondering, when you think about device growth over the next couple years, if that was going to be more in the healthcare side, blood pressure monitors, glucose monitors, etcetera, or if you were going to see it from somewhere else?
Mark LaVigne: I would put home automation in line with healthcare automation and the devices that come from both of those as sort of 1A and 1B in terms of where those devices should come from.
Hale Holden: Great. And the second question was, in your comments around the shift to online where you had lower share, is that specific to the non-tracked kind of home stores, or was that broadly across the domestic market?
