Frank Sullivan: But the underlying performance improvement, particularly in our plants is really remarkable. And I think it will show up when we get to a better unit volume environment.
John McNulty: Got it. Okay. And then, I guess, just a second one, maybe a little bit farther out but you’re making some decent investments in trying to drive the Asian business and you’ve got some new plants already that are coming on. I guess how are you tackling that in terms of gaining market share and brand awareness for a space that you don’t have as big of a presence as you do, say, in the U.S. or Europe or even Latin America. So I guess, how should we be thinking about that? And how are you kind of looking at the growth opportunities there?
Frank Sullivan: Sure. I’ll make a few comments and then Matt Schlarb can add to that. As part of our MAP ’25 initiative and really going back to the original MAP program, we recognize that our efforts, particularly in the developing world, we’re not very effective. We had too many small operations, did some small acquisitions to have kind of a starting footprint. But because these were small and faraway operations, we didn’t pay much attention to them. So we weren’t having good traction. We have an exceptional management team in South Africa that because of the unique nature of that market both South Africa and Africa became a platform for multiple RPM products. And their success led to our decision as part of the MAP initiatives to put the Middle East, India and Southeast Asia from the Asian markets underneath that leadership team and really take an RPM platform approach to the developing world.
And as you could see on Slide 5, in the PowerPoint slides that we teamed up with for this — for our prepared remarks, really strong sales growth. And as you could imagine, equally impressive earnings growth in these geographies. And that’s all as a result of kind of a restructuring and rethinking of how we could better approach growth in these developing parts of the world. Lastly, I’ll tell you with an approach that seems to be working the fact that we’re relatively small, makes me believe there’s a ton of opportunity for continued growth. Matt, do you want to add anything to that?
Matthew Schlarb: I’ll just add one thing to John’s question about the brand. So within PCG and CPG, our brands are well-known globally, particularly amongst multinational corporations who are making investments in Southeast Asia and India. But there’s certainly room to grow those brands. So opening of those facilities there just allows us more responsive to our customers and it also helps with the shipping costs and get them the products that they need because we see investments in that part of the world and particularly in infrastructure and manufacturing CapEx continuing.
Frank Sullivan: Yes. So they’ll drive lower cost and higher service levels than typically what we’ve been able to generate from a mostly North American or European manufacturing base.
Operator: Our next question comes from Mike Sison from Wells Fargo.
Michael Sison: Nice quarter. Frank, it seems to me you’ve done everything within your control to get to the sort of 42% gross margin goal, 16% EBIT margin goal. How much volume do you think you need to get to sort of get there? And maybe just any thoughts on what type of recovery you need to see in existing home sales, in DIY, to sort of put you on that to get you closer to those goals?
Frank Sullivan: Sure. I’ll make two comments on that as we approach fiscal ’25. One is we expect to see and we will need a recovery in our Specialty Products group. This group even adjusting out the Guardian warranty business was a mid- to upper single digit — I’m sorry, mid- to upper double digits. So mid-teens to upper teens EBIT margin business. And I would expect us to get back there over time and that recovery has got to happen in fiscal ’25. We will see a return to positive Consumer takeaway sometime in fiscal ’25. I don’t think we have a good sense of when and we’ll provide, I think, a better view of that when we talk about ’25 in July. Lastly, as folks have noted, we’ve been making some significant investments in SG&A, for instance, around developing this RPM platform approach for the developed world which are — developing world which is paying off and some of our MS-168 and CS-168.
In case of CS-168, smart pricing initiatives. We’ve added people in different categories. In fiscal ’25, I think you’ll see a very deliberate approach to balancing SG&A spend and reallocating SG&A to things that are really growing and addressing some SG&A spend that’s been very deliberate over the last 2 or 3 years. But if there’s areas where it’s not paying off, then we will tackle that. And so those are the elements that I see and that we will need for our MAP ’25 goals.
Michael Sison: Got it. And a quick follow-up. In Consumer Group, you mentioned market share gains. Any particular areas or customer sets? And then if things don’t recover robustly in ’25. With those market share gains, could you still turn the corner in volume growth for Consumer Group?
Frank Sullivan: Matt, do you want to talk about some of the market share gains and new product introductions that we’ve had?
Matthew Schlarb: Sure, sure. Happy to. So as Frank already mentioned this on the call but DAP introduced a new one component, wall and cavity foam insulation spray. We’ve had share gains. It’s actually been pretty broad-based. We’ve had several share gains at automotive retailers. We’ve had some specialty retailers. And looking at product categories, you may remember, we acquired Ali Industries which makes Gator sand paper a few years ago and they’ve had some nice gains at home improvement retailers over the past several quarters as well. So it’s a pretty broad-based strength in terms of its market share gains. But it’s really a trend we’ve been seeing since we got through the supply chain challenges several quarters ago.
Operator: Our next question comes from Aleksey Yefremov from KeyBanc Capital Markets.
