The Clorox Company (NYSE:CLX) Q2 2023 Earnings Call Transcript

Stephen Powers : Okay. Okay. And the last question, on the one hand, there’s definitely a really good news story here in terms of the pricing momentum you’ve gotten and sort of the gap between price and it’s building relative to the cost trend and the gross margin rebuild. On the other hand, you’ve mentioned a couple of times to me just the price gaps that you’re watching, whether private label or branded price gaps and just the sort of consumer resiliency post this fourth wave of pricing. I guess can you give us a better sense of what the mile markers are for you in terms of — is it just the gaps that you’re seeing, but you have widened out. Is there a time period where we just don’t want to see those gaps but why for that long?

Is it value share? Is it volume share? Is it those household penetration metrics? I mean I’m sure it’s a mosaic of all those things and probably some others, but just give us a little sense of kind of — if there are more important indicators in there, that would be helpful, just the way you’re thinking about it?

Linda Rendle : Yes, you got it right on mosaic, Steve. That’s exactly it, which is we’re taking a combination of all of those factors as we’re deciding if we need to adjust our plans or not. And really primarily what we’re looking at is consumer reaction to our brands, and we’re looking very closely at any changes that would be outside of what we expect given the elasticities that we have in market. And then we would make corresponding plans, and we’re looking at competitors to see are they doing something different? Are they promoting more heavily? Or are they looking at a certain pack size that would make us adjust our plans. Those are the two primary factors we’re looking at in the very, very short term. And then, of course, as we look over months and quarters, we’re looking at share, and we’re really happy that we maintained share this quarter given the fourth round of pricing.

But that’s the other thing we’re watching. There’s too much of a slide in share? Is that trade-off not worth it? Et cetera. So we’re looking at all of it. But to start, we’re looking at that gap, we’re looking at consumer behavior by category to say is it different than our expectations and then adjusting from there.

Operator: And this concludes the question-and-answer session. Ms. Rendle, I’d like to now turn the conference back to you.

Linda Rendle : Thank you, everyone. We’ll see you at CAGNY later this month and look forward to updating you on our progress in May. Please stay well.

Operator: And this concludes today’s conference call. Thank you for attending.