Clorox Co (CLX) September 9, 2026 Conference Transcript

All right. We're going to get started. So next up this morning, I'm pleased to welcome the Clorox Company. We're joined by Linda Rendell, the company's chair and CEO, and Luke Belay, CFO. Linda, in May, you announced your decision to step down from your role. So before we get started, I just wanted to thank you for the thoughtfulness that you've consistently brought to your conversations with the investment community. You've led the company through a time of extraordinary change, and we've always really valued the opportunity to hear directly from you. So Thank you, and Luke, we're happy to have you here, too. Before we get started with questions, I think, Linda, you had a few things you wanted to open up with, and then we'll get into the questions I prepared.

Sounds good, and thank you for your opening. And in line with that, perhaps I'll give an update on the CEO succession process. The board is well underway in identifying my successor. They laid out a process where they're doing a comprehensive search, and they are well into that at this point. Until then, the team and I continue to be focused on our strategy and priorities, and we'll keep you updated as we have more information, but nothing new to share today. With that, I thought I would just provide some brief opening comments on the business and then get into Lauren's questions. First, I wanted to talk a little bit about last year, our fiscal year that ended in June. It certainly was a year of volatility for the industry, given what was going on from a consumer perspective. And then for our company, it was a year of transition. We implemented the final version of our digital transformation with our ERP in the U.S., which was a significant undertaking. We did a greenfield implementation, but that is now behind us, and we are moving into optimization mode. And in addition, we made a significant move on our portfolio with the acquisition of Gojo Industries, which you know better as Purell which is a key player in B2B and retail in the hand sanitization space and expands our presence in health and hygiene and we're excited about that acquisition I know we'll talk more about it today. So we feel we enter fiscal year 27 in a much stronger place than we did in 26 and that was a result of making sequential improvement in 26 quarter after quarter after quarter but we still see the environment as being tough. Consumers are under stress, our categories remain muted, but we have a strong slate of innovation. We're investing in superiority in our brands. We can talk more about that. And certainly, as we face inflationary headwinds, we're taking all the necessary actions to ensure that we recover margins over time and, importantly, have the fuel to invest in our brands, and we're making strong investments this year. With that, maybe we just get right into questions. Okay.

That sounds good? Yeah, sounds great um so let's start with category growth as you mentioned it's it's been challenging um so category growth has been trending below historical levels we're seeing that broadly across you know our space um but i was curious if there were differences worth calling out on a more granular level and specifically where clorox competes like are there areas where you see consumers more willing to pay up for premium premium innovation or areas where consumers have pulled back more less than in others?

Yeah, we don't see a really distinct difference in our categories. They all follow a very similar pattern, but they certainly have different things impacting them. So let me walk you through a few of them. First, in aggregate, all of our categories are being impacted by value-conscious consumer. Consumers are trading up to larger sizes and smaller sizes, and they're shopping in different outlets at an enhanced pace to do that. So you're seeing more Club and Mass, and certainly they're going to continue to do that. We see as gas prices are elevated and they're dealing with the impacts of inflation. So that's across all of our categories. And then even categories that have stronger growth rates, Catletter, for example, is a mid-single digit grower. We've seen, you know, a little bit more muted, but that's still growing faster than our average. Our pro categories continue to grow faster than average. International continues to grow faster than average, even though they're under inflationary pressures in those markets as well. I would call out every one of our categories is positively impacted by innovation, and consumers are willing to pay for a better experience. So whether that be in a trash bag where we've launched a trash bag that has an absorbent layer on the bottom that is a premium that's doing well at launch, to a Burt's Bees new lip squeezy balm that is a premium, and that is doing well. In our cleaning businesses, we continue to see trade-up to our Centiva platform. Consumers are entering into the new allergy space we launched with Clorox Pure, which is a premium. So we're seeing generally consumers very willing to accept continued innovation and premiumization in the category as long as that delivers a superior value. And that's what we're laser-focused on, is making sure that we have the right size price-back architecture in our base business, that we're doing the right claims work, that we're investing strongly in advertising and sales promotion. But then really to get these categories growing again, we need to continue to lean into innovation, and we have strong innovation plans this year. Okay, great.

You've guided two organic XERP comps. So organic, flat to up slightly for fiscal 27, But underlying organic will still be down in the first quarter. And I think a big driver of that is Kingsford and Dynamics with Charcoal specifically. But I think investors get nervous and they see a second half-weighted year. So what gives you confidence that organic performance will accelerate as we move beyond Q1?

Sure, I can take that. Well, maybe let me get us reconnected to our outlook for the full year. So organic sales growth is expected to grow 3.5% to 4.5%, but as you mentioned, that includes a little over 3.5% of benefit from lapping the ERP transition last year. So excluding this, organic would be flat to up slightly for the full year. Now, Q1 is a bit of a unique situation, and you mentioned part of it is we're excluding the impact of the ERP. We expect organic sales growth to be down in Q1, and that's mainly driven by the timing impact of some merchandising as well as the expected softness in our grilling business following what has been a weak start of the season in the fourth quarter and resulted in a higher level of inventory both at retailers and consumer homes going into the first quarter. But if I leave that on the side, if we really look at the phasing through the year, category growth is essentially expected to be... fairly consistent throughout the year, in line with what we saw last year. And then looking at market share, we exceeded last fiscal year with, you know, improved trends, and the outlook is essentially expecting us to continue building on that momentum through the benefit of the focus and investment we're making on innovation and commercial execution.

It's been interesting to see the cleaning business is where Quark has been having the most success. I guess, and that's judging both reported results and also looking at Nielsen. So do you agree that that's a fair characterization? And if so, what do you credit it to? Like, what do you take as learnings from cleaning that you can apply to other areas of the portfolio?

That's the right assessment. Our cleaning business has been a very strong driver for the company, pretty consistent over a number of years. And there's a few things that I would highlight that make it so. and it was actually learnings into how we built our strategy that outlined for this period. The first would be the importance of brands. Clorox is an incredibly strong brand that stands for something very powerful with the consumer. It stands for trust. It stands for superior cleaning. And consumers, whether that be in the home space or in the B2B space. So continuing to invest strongly in our brands is something that the cleaning team has done for a number of years, and they've built that Clorox brand over years to mean something different to the consumer. It used to just stand for bleach, and now it stands for a lot more for the consumer. In fact, many products don't have bleach in it today, and some products that don't even disinfect, but they stand for powerful cleaning. The second thing that would be is innovation. Cleaning has consistently launched innovation year after year, going after new jobs that that brand can take the consumer to. So if you looked at our portfolio 30 or 40 years ago, we were pretty much a dilutable business. And then we moved into more convenient forms of sprays. We launched the wipes category 20 years ago. And we continue to launch into adjacencies that allow that brand to go into new spaces, but with that primary benefit that we keep at the forefront. And many of those innovation platforms we built to invest in for years and years and years. Centiva is a great example. We launched that in 2018. It's been a growth driver for us for almost a decade now. And so those are the learnings we applied in our Ignite strategy to get those other businesses moving, and that has been working in a number of categories. We have more work to do, and I know we'll talk about later later. That's a good example where we have to reapply that formula to get back to consistent growth. But that is why we've invested in health and hygiene. That is consistent with the acquisition we just made with Gojo. we see a real differentiator in our capabilities and our understanding of these categories and our ability to create value over time.

Okay. Another positive story, but so completely different, is Hidden Valley, which historically hasn't gotten much airtime despite being a big business. But recently, you've been highlighting the share gains for the brand. Super fun Taste of America dynamic during the World Cup. But I think there's still an ongoing challenge from GLP-1s and maybe the cyclospora outbreak, how should we think about the trajectory for Hidden Valley going forward?

Yeah, it was really fun to be part of the World Cup fever. Unless you're a TSA agent and people were taking bottles of Hidden Valley in their carry-ons, people really fell in love with ranch, which is great and gives us opportunities. But you're exactly right. We've been growing share in Hidden Valley. We had a period starting at about a year and a half ago So as the food category softened, and we had made some decisions on price pack architecture that didn't go as well as we had intended, so we went back to our playbook, refreshed our innovation plans, did some additional price pack architecture work, and got that business going again. And that led to share growth in Q4. Right now we're dealing with the temporary impacts of cyclospora. So if you look at the category, it's been down double digits. We fared much stronger than that. So we've grown two to three share points depending on the time period over this time, but it certainly is impacting us too, but to a lesser degree than the category. We see that starting to lessen in the data, so I think we might be through the worst of it. We're going to watch it closely, but I really view that as temporary and people will get back to those eating occasions. I'm happy to be eating salads again. So we'll be watching that, but I think fundamentally to your point, the category is under pressure from things like GLP-1s, et cetera. What we're trying to do with Hidden Valley is, you know, it's a brand that makes everything taste better, whether that be what you're doing on your GLP-1 journey or you want to enjoy it on something a little more, you know, indulgent, like pizza, and that's working pretty well. We're going to continue to do that. So we're excited about the share growth, but we're really focused on getting the category going again.

Okay, great. And then let's spend a moment on areas of portfolios that have struggled more. So let's talk a bit about litter, given its size, top of mind. So I guess for those who are here who don't really know, aren't as close to the story, maybe using an overview of Fresh Steps' struggles, the restage, and why it's kind of taking longer to get back to growth than anticipated.

Yeah, litter is a good example. I spoke about that playbook in cleaning, you know, the work that we do on our brands and equity, ensuring we have innovation and superior value, where we had a lot of operational disruption in litter that was disproportionate to the rest of the portfolio. We built a manufacturing site in COVID. Not a fun time to make a greenfield plant implementation, and so that took longer than we expected. And then when we had the cyber attack back in 2023, that was one of the categories most impacted because, as you can imagine, and if you have a cat, you know this, to change out your trash bag for a period of time and then get back to your GLAAD bag is not that hard. You run out of the old bag, you purchase GLAAD. But when you've trained your cat to use a particular litter, that transition back takes a bit longer. So it took us longer to get back with consumers and we were focused operationally on doing that in e-commerce, et cetera. And where we fell behind, frankly, was in innovation and ensuring that we had superiority and our competitors kept moving. So the team took a very hard look at our plan knowing that and we said we needed to do a complete restage of the business, starting with price pack architecture, getting our claims right and our packaging right, improving our formulation to remove more dust. And we did that as the first part of the restage in Q4. That was a lot of change for the consumer. And some of our retailers made decisions on shelf placement that weren't consistent with what we thought was going to happen. We got the distribution, but the shelf placement wasn't exactly right. And so it didn't go exactly as we expected. But we do feel that restage was really important to get us going again. Now what we're focused on is driving our brand equity. being really clear what fresh step stands for, which is freshness and odor removal. We're going to get back to that. A strong innovation pipeline, and we have a good one this year that we'll talk more about in the back half. And then ensuring we have superiority over time. And the team is laser focused on that playbook. The first part of that implementation is in, and we're starting to see some green shoots, for lack of a better word, with some of the price pack architecture work we've done. But this is going to be, you know, we view this as a rebuild for fresh step, and we have full confidence we'll get there. We've done this in other businesses over time, but that's really what happened. We were really operationally focused and we need to get back to that playbook for our brands.

And so you just mentioned that there are some green shoots. So this isn't about reconsidering the plan. It's been refined. The plan is in place and now it's time.

It is. The one thing I'd call out, and we've said this over and over again to our team, we want to see a multi-year innovation playbook and we feel good about that, but we want more. This is a category that is innovation-driven even more so than others, and so we are pushing really hard to say, you know, what does our innovation plan look like multiple years out, and how do we back into that and ensure that we have the right value? So that's the place that our team is very focused on is innovation. Okay, great.

Let's talk a little bit about pricing. So given the inflation that we've seen this calendar year, right, a key topic has been for across Staples has been how companies are going to be offsetting these cost increases. You've guided the cost inflation above $200 million in fiscal 27 and have also discussed some plans to raise prices on GLAAD given the exposure there, which makes a ton of sense. So that's sort of the backdrop, and I had a few questions on this. So, Luke, maybe you could give some color on the components of the $200 million. And I think there's some questions out there as to how this ties directly to direct oil, how much is logistics in diesel versus downstream. Yeah, so let's start there.

Sure. Well, as you mentioned, we expect, you know, input cost inflation of slightly over $200 million for the year. And from perspective, that compares to an historical average of $75, $200 million. So well above that. Now, oil is an important variable, but it's important to recognize that the inflation we expect this year is broader than just energy alone. And if I look at the components, certainly a big part of it is input costs and commodities. And the largest driver would be raising-based commodities, but we're also seeing meaningful inflation across a broad range of other commodities that are not energy-based. And beyond commodities, we're also seeing inflation across a broad area of the supply chain, from supplier cost increase all the way to transportations. The market's been pretty tight, especially in the U.S., and other related logistic costs. So I would say the inflation this year is proving out to be much more persistent and extending beyond just the headline from oil. The last thing I mention is from a phasing standpoint. We expect inflation to be more pronounced in the front half, and that goes along with the fact that it generally takes a little bit of time for cost mitigation actions to take place. So that's where this year the cost margin will be pressure, but it's more the timing than the structural issues, and we expect sequential improvement throughout the year.

And then there's now been this more recent spike in logistics costs. So any changes to the outlook or impact?

No, no chance right now. I mean, you know, our outlook contemplated a pretty tight, you know, transportation market in the U.S. That's one of the drivers of the inflation that we assumed.

Okay, great. So in addition to pricing on GLAD, on the conference call you'd mentioned, quote, targeted pricing elsewhere, and then also value investments to improve competitiveness in other spots.

So is there anything you're able to call out now, key categories on both sides of this equation to get more specific? uh yeah so we we called out targeted pricing for a reason uh we we feel right now the consumer is stretched um and we have a very broad range of tools to recover margins over time so we will use targeted pricing you mentioned glad earlier glad is one where we're taking um truckload pricing in a more normalized level uh across our food business in some areas of cleaning we're taking pricing, but again, being very targeted in how we're doing that, not taking broad price increases in any of those businesses. And then at the same time, we are making investments on the other side. So we talked about GLAAD being one that we did last year, where we invested in our 80 count to ensure that we had the right price point. We're also doing that in areas like litter on price pack architecture. So we are balancing where we're taking pricing up and also making in some investments. We're also investing in product in some cases, so you're not seeing that in the pricing line, but that actually plays out in TDC instead, but we're investing in superiority in a few of our things, and so that contributes to ensuring that we have the right balance between where we're taking pricing and, of course, using cost savings, RGM, price pack architecture, and other places, but also ensuring that we're making investments where we feel we need to at the same time. And we'll continue to talk more about pricing as we put it in the market. But we're being, as we said, very surgical where we think we have the right ability to take pricing and where the right value is.

And then just how should we think about net price mix for the year in the context of everything we just said and then the sales guidance? Is it a full one-point benefit? Like I was trying to do some math on GLAAD, if it's mid to high teens. Anyway, so is it around one point?

Yeah, price mix would be net slightly up, right? And this is mainly driven by some of the targeted price increase that we're taking in GLAAD or, you know, as Linda mentioned, in some part of cleaning. And that's tampered by, you know, of course, continued Edwin's from consumer value-seeking behavior and channel shifting, as well as some targeted investments we're making to improve value equation in some more challenged businesses like LIDA.

Okay, so not quite a full point on net price mix.

Yes, slightly up.

Okay, okay. And then on GLAAD, I mean, you've been happy with the business returning to share growth in the fourth quarter, which is great news. But at least from what we can see in the data, it suggests that this came with elevated promotion relative to peers. So just looking for some thoughts on the kind of competitive environment for GLAAD and how confident you are that GLAAD can maintain its market share momentum in an environment where everyone's pricing, but presumably you'll have less promotion. Yep.

So if you look at the drivers of what improved GLAAD, you know, quarter after quarter in fiscal year 26 and what we have as a plan for 27, it was much more than promotion. We revamped our innovation plan. That has performed well in market. Price pack architecture played a large role with RGM. And so we feel the plan is very sustainable that led to the share growth turnaround that we saw in Q4. and we continue with that plan in 27 with the addition of pricing. To your point, though, we're going to watch it really carefully. We don't know what's going to happen in the category. The good news is we have more sophisticated tools now to react quicker and to be much more targeted if we have to make additional or take additional actions like we did at the beginning of fiscal year 26. It is a competitive and a promotional category. I would say that's one of the ways that we might balance pricing. So we'll take a truckload pricing increase. We're going to see what the consumer does. And promotion is always a lever for us to offset that if we need to. We're not afraid to do that. But what we don't want to get into is a place where promotion is at too high of a level. This is still mostly a base category that consumers use every day. But it allows us to make quick changes to price if we need to. And we'll reserve the right to do that. But we see the competitive environment being relatively steady now. And we'll see how it plays out this year. Okay.

I just want to get a quick update on tariffs and the extent to which they're hitting your P&L. Sort of where are you exposed? How much of an impact is there in fiscal 27? I don't think you called one out on the conference call, and I didn't know if anything with the recent increased tensions with Canada changed anything. I know there was an increased tariff on charcoal.

Yeah. Well, we'd say to date the overall impact of, you know, tariff hasn't been that material in our P&L. and a few things to keep in mind. First, given, I think, the heavy nature of our product, we tend to produce very close to the market we serve. And, you know, with our footprint being mostly domestic, we tend to mostly produce in the U.S. with local suppliers. Now, in addition, early last fiscal year, we also were very proactive in making some sourcing changes to further limit the tariff exposure. So given that, I would say the overall tariff exposure or including the materiality of the refund hasn't been that meaningful as I look at last year results or even the outlook in Fiscal 27. Now, we're getting, you know, Canada, we've been monitoring closely the recent development. It's obviously a very dynamic situation, and we will update our estimates if needed.

Let's talk a little bit about reinvestment. This is going to be long-winded, so just a heads up. Good, please. So the underlying organic sales growth rate is still forecast to be below historical rates. But sort of simplistic math, when I think about the impact of inflation, productivity, pricing, and gojo on gross margins, that pretty much ties to the guidance you've given for gross margins, right? And then on overall OPEX, you've got incentive comp step up. But the basis points change that you've guided to for SG&A feels consistent with what you'd said since announcing Gojo. So I just, I'm like, I'm struggling to find the room to reinvest and how that is flowing through the P&L and how we should think about that.

Yeah, I would say high level. We feel good about the level of investment in our plan. And as you would expect, our outlook incorporates a reasonable degree of flexibility. And as we look business by business, we continue to make adjustments to our plan if we see change in consumer trends or competitive dynamics. Having said that, there's a few places where we're making investments that might not be, to your point, obvious as you look at the headlines. First, let me start with gross margin. And I think Linda just alluded to this. There are a few places where we're making investments to either improve our value superiority or brand positioning. Some of it is in the form of price, and I think Linda mentioned it in the case of Litter, and that can be done through trade or through PPA, but that's actually impacting the gross margin. And in other places, we're actually increasing cost to really just doubling down and stepping up product performance and superiority. And so that's coming in as part of some of the innovations. Another place is in advertising and sales promo. You know, we historically had, you know, a very strong ROI and a leading industry ROI. And, you know, we keep seeing them improving year over year. But we're also driving material productivity in our production, or what we call non-working cost. And that's mostly, you know, through the ramping up our use of AI. And what we're doing is we're actually reinvesting all those savings into working media. So net, your working media is actually up year over year. And then finally, in SG&A, you mentioned it like the headline is, you know, this is mostly driven year over year. The impact is mostly driven by the impact of Gojo and then lapping the lower incentive comp. But underneath there, there's actually pretty meaningful productivity that's not only of setting inflation, but also of setting incremental investment we're making behind capabilities. So that's, you know, that's the way to think about all the investment we're making next year. So net, we feel good about the level of investment, you know, plans. And, of course, you know, we'll make adjustments as needed.

Okay, great. Another question in this vein. So in early 26, calendar 26, sorry, the conversation I think among investors had been that with ERP shipment timing, right through this 90 cent headwind, meant fiscal 26 earnings were 90 cents sort of artificially low. And so the right way to think about 27 would be to add back the 90 cents to the fiscal 26 base and then grow from there. If we do that, if we add 90 cents back to what you just reported, the 553 for fiscal 26, 27 guidance at the midpoint is actually down 60 cents year over year. So input cost inflation and incentive comp are two drivers. But has anything else changed since early 26 that drives the underlying earnings to be down so much?

Yeah, no, you mentioned it. The two drivers, as we look at fiscal year 27 EPS, is the input cost inflation and the gross margin compression, as well as the lapping of the incentive cost. And so the one thing I would mention when you look at gross margin compression is the noise associated with the RFE impacted both sales and EPS in Fiscal 26, but it also impacted gross margin because of operating leverage. So when you adjust the base by 90 cents in Fiscal 26, you need to also adjust the gross margin to account for the operating leverage. And so when you do that, the gross margin compression is actually a little higher than what's stated in year-over-year in our outlook. But outside the gross margin compression, the main driver is lapping off incentive comp. We had an abnormally low both short-term and long-term payout last year, and it creates a year-over-year headwind.

Okay, so that is the biggest cost inflation. Okay, let's switch and talk about ERP, the transition itself. So just looking for a bit of an update there. I think, Linda, you said we're into optimization and out of stabilization. organization, and so I think the latest expectation was that benefits would start to come through in late fiscal 27 or into 28. I just wanted to get a sense for that. Is that a bit of a delay relative to earlier expectations, and how should we think about potential cost savings once we get there?

I'll take that. So again, stepping back, we implemented our PRP in the U.S. in fiscal 26. That was a major milestone in our digital transformation journey, first because it really modernize the backbone of operation, but second, it really creates a data and technology foundation for us to drive a business that's much more resilient, stronger, and faster. Now, we talked about it, but the transition wasn't without its challenges. Most of it was really concentrated in our order-to-cash process. And so it took longer than expected to stabilize our demand fulfillment, service level, and operational efficiencies. But as you mentioned, Lauren, as of today, our service levels are stable, incremental operational costs, you know, came down, and, you know, most of the noise and volatility associated with implementation is now behind us. And so, while it took longer to stabilize and transition, we're now moving into optimization. And now we expect benefits to build progressively over time, and they'll start showing up late this year and then well into next year. There are probably three large areas of opportunities. First one is obviously supply chain. With, you know, real-time end-to-end data visibility, you now can have just much more responsiveness in your demand fulfillment. A lot of productivity coming from both manufacturing and logistics, as well as some lower inventory and working capital. The second is really around our selling and admin. We're seeing some benefits from automations and more efficiency in our back office functions as well as the opportunity to continue expanding our global business services. So those are really the direct benefits. But the third and arguably more important benefit is really you now have a pretty robust technology foundations that enables you to have real-time end-to-end data visibility. And what we're seeing now, it really enables us to really adopt and take more advantage of AI and strengthen a lot of our key capabilities within the organization. It can be things like integrated business planning or actually just, Linda was talking about trade spending optimizations and RGMs. All of those are actually empowered by the new ERP. So net, the new ERP is not only going to contribute, I think, to productivity and strengthening our cost savings pipeline, but also improve our data insight and capability to strengthen execution and growth over time.

Okay, great. Gojo, so I'm sure you're excited now the deal has closed. You can really kind of get into the weeds on integration and thinking about incremental revenue opportunities going forward. One thing that you guys have consistently highlighted is about 80% of revenue is B2B with a large installed dispenser base and kind of recurring refill demand. What does having that steady source of sales and cash flow enable Clorox to do that it couldn't do as easily before?

We love cash flow and we love what that does consist with our business, but I think the biggest thing that is getting us excited, and to your point, we closed on April 1st, so we've been in the plan now for multiple months, is really the power of a broader health and hygiene platform. And we talked about, rightfully, the cleaning business and how well it has performed over a number of years and what the attributes of that are. We very much see the exact same attributes in Purell. Although it is more weighted to B2B, we still see those same attributes of a very strong equity that stands for something with the consumer that nothing else stands for when it comes to trust. You know, these are people who go into a hospital, and that's what doctors trust, to disinfect their hands and nurses before they come in. And certainly they lived through COVID and not being able to have Purell on the consumer side, given they were focused on doctor's offices, was a big downside to consumers. So it has that equity. It has incredible innovation. That's the thing we're most excited about. We knew about some of it before we started, but when we got into their innovation plan, whether that be on dispensers, so we do have over 20 million dispensers on the wall today, but we continue to upgrade those over time and add to them. And that allows us to give better benefits on the B2B side to our end users. So I'll give you a really live example. If you think about what you used to do to dispense soap or hand sanitizer in the past, you went up to something and you pumped it. And today, if you go to most places, you put your hand in or something and it electronically gives you the exact right dose that you need. The type of technology that Gojo is invested in allows labor to come down in B2B. So they've actually put the battery that was one of the biggest sources of labor issues, people having to constantly check, does the battery need to be changed, into the refill. And they're able to charge up for that. And so over time, we have an innovation pipeline that continues to make those dispensers on the wall more and more valuable. But the big thing for us is bringing together the Clorox and the Purell equities in both the home and away from home to give a health and hygiene solution across a number of surfaces. So Purell plays in skin hygiene today and a little bit in surface hygiene. Clorox is primarily surface hygiene. So we see new jobs to do in the B2B space. We see new jobs to do in the home. And we see those equities as having distinct roles in our ability to do that. And for B2B, they have a very sophisticated B2B organization at Gojo, more advanced than ours. And we had a strong business beforehand with direct relationships with these verticals, and they are very excited to bring these two businesses together so that these, you know, hospital systems, et cetera, can offer one solution for their health and hygiene of their professionals and, of course, for the patients and consumers that enter their businesses. We've had more outreach from customers than we've ever had on any launch we've ever done with this acquisition with how excited they are for the growth opportunities. And so, you know, Gojo was already, Purell was a mid-single-digit grower. That doesn't include any synergies. But we see synergies on, you know, contributing to the growth on both the chloroxide and Purell. And we see this as something that was a good growth opportunity, but also because of the dispensers in the wall, this is really what offers lower risk because we already had that installed base. And we felt really good given this was our major acquisition for the last decade. really good and fits with our capabilities, adds to our capabilities, but lower risk given that installed base. Okay, fantastic.

One last quick thing is that you guys have been really active in tightening the portfolio or divesting Argentina, VMS, but I do get questions still on if there's room to further focus the portfolio. So, you know, like to give you more attention and more weight to where you've been more successful with cleaning and hygiene. So how are you thinking about the potential to divest underperforming businesses?

First, I think we've been clear. We see health and hygiene as North Star for our company and a place we want to continue to grow. And we want to do that both organically, and certainly we have made the investment in Gojo to do it inorganically as well. But we also see the ability for a number of our businesses to fit under that health and hygiene banner, and they do. But we always evaluate our portfolio with the board on a regular basis and as a management team. We're always looking for opportunities to say, you know, are we the highest value owner of this? And are there other, you know, better uses of our investment dollars? We don't have anything to talk about today, but we're always doing that work. And it will be under that guise of continuing to move toward that health and hygiene on North Star. Okay, great.

We're going to wrap there and go to breakout, but join me in thanking Linda and Luke for being here. Thank you, Lauren.