Filippo Falorni: Great. That’s super helpful, Kevin. And then a high-level question, Linda, just, in your guidance on top-line, you mentioned you expect a sequential improvement in volume throughout the year. Just what gives you guys the confidence of the volume coming back other than, obviously, the comparisons to like, at a high level, is it that incremental advertising investment or any other specific point that you can point to give us some confidence on the volume improvement? Thank you.
Linda Rendle: Yeah. On volume, maybe just to take a step back, I think would be helpful and talk a little bit more similar to my comments on household penetration of what impacts volume and then what we believe we’ll see over time as we return to more volume based growth from more pricing driven growth. So the big picture on this, we knew we were going to make a volume trade-off with the level of pricing that we took. And certainly that pricing was cost justified. And I think that’s the right trade-off given the fact that we were able to deliver the top-line and margin progress that we committed to. And it’s only one lever that we look at it, understanding brand and category health. So if we if we look at volume, again, what impacts it?
Consumers are adjusting to pricing right now. And we still have two price increases that we will lap here in Q1 and Q2. And so they’re still adjusting to what the pricing is. And they’re adjusting to pricing well beyond our categories. I think it’s also important to note there’s an element of cross elasticity here. Everything in their world has changed from a wallet perspective. And they also just came through a pandemic and they want to have experiences. So we’re watching that consumer settle out. And what we’re seeing in our data is volumes are beginning to improve. You saw that if you look to 52 weeks, our volumes were down more than they were in the latest 13 weeks, for example, so we are making improvement. We still have to lap those two price increases.
But from a consumer behavior standpoint, what you’ll see is consumers will return to their old routines because those routines were the most efficient and effective for them, and particularly in essential categories, they don’t want to have to work harder to do this stuff. So perhaps they’ve run through the inventory they have in their house, maybe they tried an alternative and it doesn’t work as well, and we tend to see those people start to come back. We also saw light users category loss tend to come back again because we reintroduce our products to them through innovation. We use our advertising spend to talk to them about the benefits of the product, we remind them that, and they pick us up again as they send their child back to school or if their family experiences a run of cold and flu in the house.
So those moments, we tend to bring those light users over, and volumes tends to grow again. And we’ve seen that every time we’ve taken pricing, and that’s consistent in categories. I think what’s unique for this time is, the amount of inflation our industry and Clorox experienced specifically is unprecedented. We’re certainly not taking this level of pricing. So it really will be about the pace that this happens at. But we’re happy with the progress we’ve made so far. We think we have the right plans in place. We’re making the right investments. Our brands are still a superior value versus what they were pre-pandemic, so they’re very strong. And we believe over time, again, we will make progress on volumes and return to more volume-based growth moving forward.
Filippo Falorni: Great. Thank you, guys.
Operator: And our next question comes from Andrea Teixeira from JP Morgan. Please go ahead, Andrea.
Andrea Teixeira: Thank you. Good afternoon. Hello, everyone. My question is on the shipments and consumption trade-off, if there’s any trade off. You mentioned volumes came in better than anticipated, Linda, and was driven by — was it driven by consumption, or do you think retailers were also rebuilding inventory, given that consumption was better than feared? As you exit the quarter, do you feel inventory levels are where they should be? And then related to that, I also have a clarification on the assumption for the mild recession for the second half and your comments about, like, volumes coming in slightly better than anticipated. So — but on top of that, you said category behavior has been changing. Is that some more price elasticity that you saw towards the back end of the quarter or your exit rate on the quarter, or you are just assuming prudently that at some point, you’re going to see the historical price elasticities you want to kick in?
