Church & Dwight Co Inc (CHD) June 2, 2026 Conference Transcript

Okay, everybody, welcome back. For the next session, I am thrilled to welcome back Church and Dwight to the conference. With us today are President and Chief Executive Officer Rick Durker, Chief Financial Officer Lee McChesney, and Executive Vice President of International Mike Reed. Together, Rick, Lee, and Mike are going to run us through a presentation for about 30 minutes, and then we'll have the balance of time, about 10 minutes of Q&A. And with that, I will hand it over to Rick.

All right. Thank you, Steve. Thrilled to be here. We spent about a week with our investors over in Europe and had a great business review yesterday. So before I begin, here's our safe harbor statement. I encourage you to read that on our website as we will likely make forward-looking statements. Who we are. We always start these presentations with our performance. And so our TSR, our total shareholder return, has been leading in the industry for a long time. It took a bit of a step back, as the whole industry did in 2025. But in 2026, we're off to a great start. And a lot of that's because of how we run the company. And the evergreen model is really important for us. That's kind of our anchor. We want to grow year after year after year, the top line and bottom line. And we're especially proud that in 2026, even despite this crazy macro world that we live in, Our outlook kind of brackets the evergreen model. And organic growth is just core to the company. And it's not just one year that we've done it, but over 10 years we've averaged over and around 4% organic growth. But when people ask me, you know, what makes us different? Like why have we had such strong outperformance? And if you look at this chart, we've had net sales go from the bottom left to the upper right for a long time, over 20 years. Same thing with earnings, same thing with cash flow. And then the upper right-hand corner is, again, our consistent growth organically. So it's really two things. One is we have a capability to grow brands through our innovation, through our marketing and advertising, through our trade and promotion. And then we also have the ability to identify, acquire, integrate, and grow brands. And when we can do both of those well, then our performance is kind of unique in the industry. So, again, as a backdrop, about a $6.2 billion company, 77% domestic, 18% international, and 5% for our SPD business. We have seven power brands, and these seven power brands make up 75% of our sales and profits. And we have a winning formula that we like to describe as these five things. So balanced and diversified portfolio, low exposure to private label, online success, strong, consistent, category-leading innovation, and then, of course, our acquisition for an acquisitive company. So a balanced portfolio. We're about 50-50 household and personal care. And we're also about maybe two-thirds, one-third value in premium. So we typically do well in any economic environment, and we're doing well right now, even as the macro has a lot of volatility in it. Private label exposure. So for a long time, our exposure weighted average to all of our categories was around 11%, and that was relatively low in the industry. After we sold our vitamin business, that dropped down to 5%, so that bodes well for the future. And then online success. You know, we were a laggard, about 2% of our sales back in 2016 were online. Now it's about a quarter of our sales. And that's interesting, but it also just shows our capability. We're agile, we're lean, we're able to move with speed when we want to. We have a great innovation capability, and I call it a capability now, not just a new product portfolio. So strong, consistent, category leading. About half of our growth is typically through innovation. and then of course good returns become great returns because we know how to acquire brands we want number one, number two brands we want high growth, high margin consumable brands, not really durables asset light, we leverage our manufacturing base and we want a sustainable competitive advantage and we'll talk a little bit more about our most recent acquisition in a couple minutes we have a long history of growth through acquisitions this is a one and a half billion dollar company to go into 6.2. Again, ability and a competitive advantage in my mind of identifying, acquiring, integrating, and growing brands. It's easy to say it's hard to do. And the reason we're really good at it is because we've done it again and again and again. Speaking of acquisitions, here's our latest update. We actually acquired a brand, Miss Mouth, which is a fantastic premium stain fighter brand. It's just right in the middle of an online kind of digitally native brand that's now starting to go into bricks and mortar in the U.S., high brand love, and just, again, an exciting, exciting one. Here's a video I wanted to share, 22 million views. This went viral.

Oh, is that the Missy? Yeah, yeah, yeah, I saw that. Miss Max announced.

Okay, here we go. This is real, not staged. Legit. I would not say.

Oh, my gosh.

Shine up. No way. I've seen that.

Are you serious? Boom, baby. I've always heard this stuff. Gone. How does it do that? I've seen that, but how does it do it?

Get yourself a photographer who knows how to get stains out. I love you.

So that gives you a flavor for it. That had 22 million views, and it went viral because it's a product that really works. A lot of the pre-treaters, even the ones that we own, OxiClean, you have to pre-treat it and then put it in the wash. While those are the directions also for Miss Mouth, the benefit is there's a magic moment. The magic moment is it actually removed the stain. You saw that in the video with the lady with the wedding dress right before with her photographer.

Here are some aspects of the deal.

$325 million, which is actually about 10 times EBITDA when you look at the tax shield. 2025 full-year sales were $80 million. That's largely on Amazon. This came from nothing to something online. It's just now starting to go into bricks and mortar with a couple retailers. But overall, our ACV or weighted distribution is 35%. In the industry, categories are around 80%. We're in the 90s with OxyClean. Number one stain remover brand on Amazon, it over-indexes to Millennial and Gen Z. and this is a great large category. It's a $1.2 billion state-fighting category, and this has a lot of attributes of Hero, as you're going to hear, and TheraBreath in that there's low household penetration, 2% compared to the category of 50%, and brand awareness is actually single digits as well. So a lot of runway for this business. TheraBreath, another recently acquired business, meanwhile is growing consumption by double digits. fantastic it continues to do better and better our shares continue to grow all time share highs as well when we bought this business remember we talked about it being the alcohol free the number number one alcohol free mouthwash it's the number two mouthwash in general far and away and we continue to gain great distribution and great share heroes another good example hero the consumption up double digits in 2025, and all-time share highs as well, and the good thing about Hero is there's still low household penetration, around nine versus a category average closer to 30%. We're gaining TDPs and shelf space by leaps and bounds, and this business, again, has a lot of runway behind it. Now, for Hero, part of the strategy is how do you become more than just a patch brand over time. We have a right to play in acne. And so we have the whole acne journey covered. And we have a pre-acne, we have the white head, you have when you pop the pimple, and then you have kind of a recovery. And so we have the right to play kind of before that with cleansers as well. So we'll be launching that later this year. Touchland is our second most recent acquisition. And it's the number one premium hand sanitizer. Household penetration, Again, extremely low compared to the category. Retail opportunities exist. New category expansion exists. We're just now really starting to get behind marketing in a bigger way to go drive brand awareness. And the international rollout takes a little bit longer because of regulatory for each and every country. But over the next 12 months or so, you're going to see it appearing in many, many more countries, which we're really excited about. Okay, so that is really our acquisition update. Now, there's also, I announced in January, some growth initiatives that we put into place as a company. And the backdrop at the time was our categories have grown 3%, not for one year or two years, but for over a decade. And in 2025, categories slowed somewhat. So that 3% came closer to 2% or 2.5%. And that was the backdrop. Along with that backdrop, we also had, that everyone's aware of, consumer sentiment is low. It's at an all-time low, actually, the last reading. And so bad things happen at times, and so how do we make sure that we can grow despite what's happening with categories? And if categories grow normal, that means we're going to be growing faster than category growth. So we put in place three separate distinct initiatives. One was grow the Arm & Hammer brand from $2 to $3 billion. The second one was grow our oral care business behind TheraBreath from $1 to $1.5 billion. And then the last one is grow our international business as we scale it through M&A from $1 to $2 billion. This is one of my favorite slides. I usually talk about it from an acquisition perspective just to show the company going from the $1 billion to $6 billion. and a lot of that green, that green is all acquisitions. So we've had $4 billion of acquisitions over the years from a revenue perspective. What's also true on this slide, though, is you can see the strength of the Arm & Hammer brand, and it's a $2 billion-plus brand, and it's grown consistently over many, many years. And why is that? Well, we've gone up and to the right on share for laundry and for litter. And so what gives us confidence to make our Arm & Hammer bet go from $2 to $3 billion. Well, the first and foremost, right, the U.S. is celebrating 250-year anniversary. Church & Dwight's 180 years. And so we've been in baking soda for 180 years, 1846. And then since then, in the 1970s and 1980s, 1990s, we have jumped into toothpaste and litter and deodorant. And so these big categories, and we've done well. Brand awareness for Arm & Hammer rivals almost any other brand that you know. It's in the mid to high 90s. And then finally, we have this halo effect that happens with Arm & Hammer. If we advertise our laundry, it helps our litter business. If we advertise our litter business, it helps our toothpaste business. So again and again and again, we have this advantage versus everyone else on how we advertise. And I think the main point of the entire strategy is we are already a brand that goes across categories. Many companies have a strategy of taking a brand across categories. You hear it again and again and again. Very few are successful, though. And I would say we've already checked the box on that strategy. We are in categories where we're premium. We're in categories where we're value. We're in categories that are household. We're in categories that are personal care. All under the Arm & Hammer umbrella. And whether it's deodorizing or cooking or baking, that's the hard part. So we've already done that. Now, the next step is to say, what categories should we go into? And so there's four pillars of growth. The first pillar is really, again, growing the core. Innovation, quality products, efficacious, our great innovation engine, and doing what we've done on laundry and litter and the rest of the portfolio. Rounding out a good, better, best on a few of our sub-segments on Arm & Hammer. And then number three is the category work. And we are deep into it. I told everyone at Cagney in January that we'd give an update likely in January of 2027. But all the work, energy, and effort that we were spending on our vitamin business or other businesses that we were trying to fix has now gone into all these growth initiatives. And that is where I think a lot of value will be created over a long period of time. And then the fourth pillar is really retail sales of our licensee products are around a billion dollars. And so some of those make sense for us to take back and to scale up over time. They're already tested and loved and accepted by consumers. And so I hope that we take back a few of those. And then conversely, as we do all this category work, I actually hope that we can convince some of our licensee partners to take in a couple bets on those new categories. The second initiative was really drive oral care expansion through TheraBreath. And again, the focus here is on two categories, or two big categories, mouthwash and toothpaste, so over $2.5 billion and $4.8 billion. So that's where we're kind of laser-focused. TheraBreath has a unique proposition here. It's not just one thing, but it's many, many things that make TheraBreath successful. But low household penetration, 12% versus a category of 65%. And again, we're growing by leaps and bounds on distribution and on market share for TheraBreath. That gives us confidence as we go and become a bigger player in toothpaste. We got distribution on toothpaste that we didn't deserve, but we got it because of such a great brand reputation around mouthwash. So we're a small player today at Church and Dwight is on toothpaste, but we believe we have an opportunity. Now, we're a small player largely because Arm & Hammer is a niche of a niche in terms of the taste profile with baking soda. And so TheraBreath doesn't have that same constraint. This is a best-in-class performing toothpaste. It's better for you and has a superior product and fresh breath. And then finally on the growth initiatives, the third one is international growth. And we've talked about this before, but international has a long, long track record of success. And Mike and his team are doing a phenomenal job. High single-digit organic growth on average. And kind of the new news these past few years is the ability to scale and how quickly we've been able to scale some of these recent acquisitions. Hero and TheraBreath are tens of millions of dollars already internationally. And then we believe Touchland has a great shot of international expansion. And so, and we're going to start focusing, and we have been, on international M&A. Even this week, we had countless meetings on international M&A. so we're not choosing one over the other we're saying and even as of Friday we just did a US acquisition but we believe there's definite upside over the long term to acquire some great brands in the rest of the world speaking of categories and brands, in the US our evergreen model is around 3% and we have those seven power brands that are driving the entire engine of the company this is a really important slide so this is our categories over the last five years this is kind of underappreciated I would say because of our M&A capability we've got to choose in which categories we compete in we didn't inherit this we chose this and because we've been able to look at and do due diligence on categories and competitors and private label exposure and so on and so forth, we've set up, the backdrop is set up for success for us. Many of our categories are growing categories. That's kind of the takeaway here. And on average, even in 2025, they grew around 2.5%. Now, not only do we want growing categories, but we want to be able to enable share gains over time. And if you look back at history over the last five years, we've gained share about two-thirds of the time for these power brands. That matters in a big way. And that matters that when we want to grow in excess of categories, that's how we do it. And what's the check-in? So the check-in for 2026 is we've had strong volume growth, right? In Q1, we had about 5% volume growth. The previous, the second half of last year, we had, I think, 2% volume growth. And along with volume growth, along with innovation, along with higher velocities, along with great acquisitions that are performing well, come shelf space. And so we gained phenomenal shelf space this last kind of reset. And this is almost double our closest competitor or the average competitor in the industry. Speaking of innovation, new product innovation is a muscle for the company. And when Carlos Linares came in, our head of R&D, he saw that we only innovated one way. And we now have four or five different vectors on how we innovate. And we typically used to grow at 1% and 1.5% growth for incremental net sales. That's a high bar. I say it all the time. Incremental net sales, you know, after cannibalization. And we've transformed to go 1.5% to 2%. So about half of our growth these days is coming from innovation. Here is some of our personal care innovation. Therapy toothpaste, the invisible patch for Hero. We have cleansers for Hero. And then we have Trojan Goat, which is the greatest of all Trojan condoms. And then we have household innovation. And we have good, better, best innovation for laundry. This year it was on the good tier, 10X baking soda. What better time than today where consumers are struggling with gas prices to be able to have a good offering in the value tier? We also have rents. We have a better sheet and a good, better, best there as well. We have our most powerful OxyClean VSR launching, and then we have dual-defense cat litter. All these are great innovations which are helping to drive our shelf space expansion. And now I'm going to turn it over to Mike.

Good afternoon. First of all, Steve, thanks for hosting us again this year. DB always has a great conference, so thanks for hosting us. I'm going to spend a couple minutes on international SPD. So we're about 18% of the business. Our evergreen's at 8% organic growth per year. We set up the business in kind of two different ways. We have our subsidiary markets, Canada, UK, France, Mexico, Germany, Australia, and most recently, Japan. We acquired our distributor back in 2024. That makes up about two-thirds of our business where we go direct through a subsidiary model. The remainder of our business, we operate in well over 100 countries with almost 400 distributor partners around the globe. We support that with five regional offices that are growing now. They're cross-functional capability, Shanghai, Singapore, Mumbai, Panama, and London. As Rick showed, we've had a long track record of high single-digit growth. We are poised to continue to do that. I think most importantly is relative to a lot of our peers, we're still very young in our journey. We're only 18% of our sales. We've been at it for a shorter period of time. So we have a lot of runway ahead. And I think most importantly is our brands have the opportunity and have proven to be able to really travel. So we support dozens of brands across the globe, but ultimately these are the nine brands that carry the majority of the weight and will be the biggest growth drivers. But it's a combination of leveraging large U.S. power brands like Arm & Hammer and Waterpik and OxyClean. But we complement that with some of our personal care and OTC brands that are largely internationally based. So kind of headlined by Batiste, Staramar and FemFresh. And I think, as Rick alluded to, probably our biggest muscle in the last few years has been our ability to quickly take U.S. acquisitions and roll them out globally and to scale. And so Hero and TheraBreath have been just all-star brands for us, and Touchland is kind of next in line. Just to put an example, Hero, which is not an old acquisition, already as we've launched, we're into over 75 countries. We'll be north of 100 countries by the end of 2026. But I think most importantly, we're already in a number one patch position in all our key subsidiaries where we're tracking share. So it just goes to show kind of how quickly we're rolling out, but then also the kind of speed and performance that we can generate. And Touchland is kind of next in line. So a lot of pent-up consumer demand for Touchland. As Rick alluded to, we're already in a couple countries. There's some registration process, but by this time next year, we'll be in excess of 20 countries, which we're excited about. I think one of the things from international as we continue to mature is we're putting a lot more time and effort into really understanding local consumer inciting and also regionally at innovation as well as regional manufacturing. And here's just a couple of examples and there's many more. But, you know, as we roll out brands like Batiste, but, you know, when we enter some of our Asian markets where you have different hair types, different habits, different fragrance likes, how do we alter our proposition to make sure it's more relevant for the local consumer? So that's a good example of just how we're innovating and changing our packs to support that. And then similarly, OxyClean, one of our biggest brands in Japan, predominantly a powder business historically, but the Japanese market is 80% liquid. And so we looked at local manufacturing in order to build a locally relevant proposition in liquid and launched that a couple of years ago, and it's off to a great start. So just a couple of examples. And then lastly, from an international perspective, we are focused on M&A. So we've had a great track record of taking U.S. brands, taking them internationally. That will still be a core part of what we do and a big lever of our growth. But we're also on the hunt for scaling acquisitions and acquiring in the international arena as well. Quickly, just on specialty products, it's a 5% organic evergreen model. It's about a $300 million business. It's broken up into three different parts. We have an animal business, animal nutrition business, which is about 60% of it. We have a specialty chemical business, which is about a third. And then our consumer professional is taking our consumer brands into the B2B space, which is about 5%. I think most importantly is this has been a bit more of a volatile segment over the last number of years. We've made some strategic choices to exit some businesses. We've got on our front foot around innovation. We're being much more strategic about rolling our animal nutrition out globally. it's now 30% of our business. Now we've had nine consecutive quarters of positive growth. So we've really stabilized this business. It's in a great shape and ready for continued growth ahead. And with that, I'll pass over to Lee.

All right. So I'll try to finish up a prepared remarks here. So thank you to Rick and to Mike for walking us through here. So for financials, the first place we really should start would be our Evergreen model. Rick mentioned this before. This is the foundation of really how we run the company here. It's a balanced mindset. We're looking for profitable growth, 4% organic growth, 8% EPS improvement. And what I'm going to do now is just walk you through a little bit of our scorecard. And instead of just showing you a scorecard of what happened the last year or two, let's look back over the past decade. Probably not a chart you're going to see much this week from a lot of others. So it's a compelling 10-year history, 4.1% organic growth, right in line with the Evergreen model. And it's driven by a lot of what you just saw from Rick and Mike, whether it's the innovation, whether it's the strength of the brand, whether it's the growth we brought forward in international. All those are coming together and driving this consistency in organic growth. If you take it one step further and then look at it from a volume perspective, we're a volume-driven organic growth company. This shows you that same momentum here as well, driving unit growth in markets across the globe. Gross margin. So every year, every model, we're going up to 25 to 50 basis points of gross margin improvement. You see a lot of that mindset coming out of COVID. You see this improvement we brought forward in gross margin. And this year, we actually have an outlook of 100 basis points. And that foundation that comes back from May is it's going to be our normal 25 to 50 basis points that comes from our normal gross margin toolkit. And then we have the strategic portfolio changes, which gives us an extra mixed benefit as well. Behind that is a whole bunch of actions. And these are all the things we bring to life each and every day to drive gross margin improvements. So, foundationally, it's good to great productivity, it's RGM activities, it's driving positive mix. Now, within that May 1st outlook, we also had, you know, $25 to $30 million of new inflation show up. And what we did is really turn into these toolkits, which are predominantly good to great productivity, and still maintain that outlook back in May when we gave you an update. Now, when you have that momentum on the top line, you have that commitment on gross margin, you have a great opportunity to invest in marketing, and we do that consistently. We target through the evergreen model 11%. You see that history. That's what we've done, no matter what's been going on in the macro environment. And we also have this platform we just talked about. We have seven brands driving 75% of our sales we get to invest that marketing in. We're investing it in growing categories. So it's a really solid return, really good accountability for where you invest that marketing, and we continue to refine how we do that to even get more impact. On SG&A, the Evergreen model really looks at really flat to 25 basis points of improvement. In May, when we refreshed our outlook, we talked about being slightly up in SG&A. That comes from the same two drivers we've talked about all year. You know, we exited $400 million of business, so we don't have the normal leverage. We have some stranded costs. And then we also primarily have, you know, Touchland has the first half of the year has amortization in SG&A that's driving it up. And then we're continuing to invest in the growth initiatives, in e-commerce, and international. That's behind our SG&A history. So this might be probably one of the more compelling charts. This is, again, a 10-year scorecard of EPS. And let's think about all the different things we've all had to navigate over the last decade. And we've averaged 8% growth in EPS despite all of that. Our May 1st outlook for the year also calls out a 5% to 8% growth. So it's similar to delivering evergreen again in 26, and just a spectacular track record along with our evergreen model. Now, again, specifically for 26, we gave an update on May 1st. We're still going after 3% to 4% organic growth. We have the EPS outlook I just talked about, 5% to 8%. And we also talked again about just another strong year in cash flow, Another $1.15 billion being targeted. That was our outlook in May. We'll give you an update once we get through the second quarter here at the end of July. Now, behind that is you look at this list. You've got tailwinds and you've got headwinds. We began the year with the same outlook. We just have far more tailwinds, whether it's the momentum coming out of last year, the strength of the portfolio, the strength of the brands, really a lot of the elements you just talked about. Certainly we have headwinds we all talked about, But again, we have the driver on the tailwind side really leading the EPS growth we talked about there. Behind that, continuing this, we have this free cash flow, which is another compelling part of what really drives the P&O results you just saw there. So, you know, we're showing you a decade here, 119% free cash flow, multiple history. You know, many companies target actually less than one. So it's substantial cash flow that gives us a tremendous amount of flexibility to really drive effective capital allocation. It also shows up in our total debt to EBITDA. We're sitting here today at 1.5 after doing touch land, after doing $900 million of buybacks last year, and continuing to invest in the organic business. So just a lot of opportunity, a lot of flexibility it gives us to drive this business. And you sit here today, even with Miss Mouth just done, you know, $5 billion of dollars available that we can invest in capital allocation effectively. And where do we focus at? We're very consistent. Our number one use of cash is TSR or creative acquisitions. You know, it can be Miss Mouth, it can be Touchstone, it can be Hero. Therabath, that's the number one use. We obviously continue to invest in the business, whether that's NPD, whether that's driving growth, good to great productivity. We certainly would next would be debt, but right now we actually have no variable debt based on the debt I just showed you there, and then returning cash to shareholders. And just another example of just the significance of this cash flow just coming through ultimately the shareholders, look at the dividend track record. You know, 125 years, 30 years consistently of driving increases. So with that said, we have a good amount of confidence in our future. Yes, there's headwinds out there, but there's a lot more tail as we talked about it, whether it's driving the brand, the momentum we have on, you know, the acquisitions that we've done over the last several years, the international growth we just talked you through there. But, you know, we look forward here from our May outlook and with optimism. And with that, we'll turn to questions, Steve.

Okay, great. So you were kind enough to preview the conference with an acquisition to give us something new to talk about. So let's start there with Miss Mouth. As you mentioned, Rick, number one position on Amazon, recently launched, I think it was Walmart late last year, and Target just a month, month and a half ago, which sets you up for a lot of growth. Is there more distribution opportunities that are high priority, or is the growth really about consolidating the distribution that's been recently won?

Yeah, no, it's a good question. I think if you take a big step back, I had it in my comments, but 35% ACV, we believe this brand can be fully distributed over time, and we're really good at doing that. We have the channels, the relationships, and whatnot to make that happen. And we also have Mike and his team on International to help expand there, too. Walmart's off to a great start. Target's off to a great start. And I think Target's already a nine share, as an example, only being there a few months. So this is a – it always goes back to the brand and how it delights consumers. And this certainly is doing that. It's going to be – we're going to look back in a few years and say, wow, That was an extremely good acquisition that's grown dramatically and right in Church and Dwight's wheelhouse.

Are there innovation opportunities either in the pipeline or that you guys have conceptualized, or is it really about pushing distribution on the core product?

Yeah, the answer is yes to both. But I think the first priority is going to be how do you really go drive awareness and household penetration? and that's runways of growth. And so we're going to have most of the organization focused on that deliverable and then a small subset really focused on the innovation pipeline and where can it go and what makes sense for that brand. But as you saw in the video that we threw up there with 22 million views, it's a product that has that magic moment, that wow, and that is what consumers are looking for efficacy. They're looking for a brand that they trust. And so it can enable, I think, a great innovation pipeline in and around that area.

And just to round out the economics on it, so you called out in the announcement that, you know, essentially neutral for this year, cash earnings accretive for next year. Does that imply sort of EPS neutral? Or how do I think about the, you know, obviously I'm more focused on cash in the long run. But, you know, we know the market and EPS matters. So how do we think about that, Lee?

I would just say, as we kind of put in the release, obviously it's day three here, that, you know, we said we think it can be a double-digit grower. Well, let's let us get into a little bit forward. There's obviously a timeline for distribution gains and things like that. And, you know, certainly it will be accretive in due time.

One of the, I think, most consistent questions coming back to your investor day when you talked about those three new growth drivers is around on the arm and hammer side and just the balance as you go from $2 billion to $3 billion, the balance between core growth behind good, better, best initiatives, behind moving to new categories, and then the licensing optimization. Do you have any further comments in terms of calibrating the size of those buckets? And then maybe, Mike, the role that you see international playing in that escalation of Arm & Hammer?

You know, it's a fair question. And I would say the two largest contributors of going from $2 to $3 billion would probably be, of course, our continued growth of our largest categories of laundry and litter. That's innovation. That's our playbook. That's going to be a tailwind. That's kind of what got us from $1 to $2 billion, the bulk of it, over time. The second one will be what categories we choose to enter. And we're doing a lot of great research, a lot of great testing, a lot of good discussions with retailers already on what those categories will be in 2027 and 2028. I'm just not ready to talk about that yet. I think it's going to be a good tailwind. It's going to be the second largest, I think, contributor to that. And then the third one, probably tied for third, will be the good, better, best for the sub-segments of Arvin Hammer and what we choose to bring in-house and can those provide tens of millions of dollars of growth over time. You know, what I'm doing really with the management team is we're putting a bunch of kind of drill sites out there that are going to add up to tens of millions of dollars independently that will help kind of be the front runner in case you have a headwind of the economy and category growth or category sluggishness. I think our categories are very resilient. You saw the slide, but in case they slow or in case we want to grow faster, we're going to have all these initiatives at our back. And so that's kind of a little bit more color. I'm going to give a full report out probably in January.

Mike, anything you want to add on internationally? Yeah, I'd just say as the U.S. business is going through some of those category assessments, we'll look at those and doing those apply to international growth, So to be determined as we go through that. But the one that's sort of line of sight is we're quickly expanding our litter business, particularly in our Asian markets. And so we've got Arm & Hammer baking soda and litter in markets around the globe. Those would probably be the two levers that we'll pull a little bit harder. But litter has a lot of opportunity that we're excited about.

Yeah, the second one, international, which you may not be aware of, is part of the reason we bought the Japanese distributor and we started off in a great spot was because we had 80% brand awareness for OxiClean in Japan, and now we're throwing through Therabreath and Hero and Batiste and Waterpik through that same sales channel. Well, there's a similar story, not distributor-wise, but consumer-wise. 80% brand awareness of Arm & Hammer in South Korea. So as we look for M&A, as we look for different brands to buy, that just sets us up for success as Arm & Hammer can grow globally.

Yeah, okay. We're running out on time, But I did want to ask, you may be one of the few companies that did a presentation and didn't voluntarily mention AI this week by the time it's all over. So I'm curious, in the context of that slide you put up around Armand Harib being kind of a later adopter of e-commerce and digital, what is the company's position on AI? What approach are you taking? And are you following a similar path, or are you more leaning into it?

Yeah, what a great comment. And I would say that is exactly what we're doing, like the capability that we were able to transform the company from e-com of 2 to 24. Sometimes you have to really come together and figure out what are the four or five areas. You could do a lot of things, but a lot of them could be mediocre. So what are the four or five things and focus areas in AI that we're doing? We just went through that with our board and our strategy session. I'd say it's alive and well. I think it's going to transform the company. I'm telling our employees again and again and again that my goal would be to be able to double the size of the company and still have the same number of employees. We can move the speed, agility we can do more effective advertising more effective RGM capabilities more effective R&D and formulation more effective supply chain so that's what we're laser focused on I thought you were going to ask me why are we the only company who has dollar share and volume share but obviously that did not come up all right all right thank you everybody thank you thank you guys for joining us