Clorox Co (CLX) March 9, 2026 Conference Transcript

All right. Thank you for joining us at the Global Consumer and Retail Conference. We are here with the Clorox company. Filippo, you can take it over. Great. Good morning, everyone. I'm Filippo Falorni, Citi's Beverages, Household Product, and Personal Care Analyst, and we're very happy to welcome the Clorox company here. We have Luc Belé, Clorox Executive Vice President and CFO. Luc, thanks so much for coming.

Yeah, thank you, Filippo, and good morning, everyone. Maybe let me just start by taking a few moments to maybe frame where we're at in our transformations and how we've been navigating the current environment. I would say probably three key messages for you. First, we started the fiscal year knowing that the front alpha is going to be challenging. And this was, you know, driven by the environment, but also driven by the fact that, you know, we were implementing our ERP and expected some temporary negative impact. Now, the second quarter came generally in line with expectations. And the good news is now the ERP implementation is behind us, with cost complexity ramping down and then the benefit ramping up. Second message is we have strong plans for the back half of the year. And we expect to sequentially improve organic sales growth, and we're really focused on execution right now. Now, this is really supported by a more stable supply, now that we passed the ERP implementation, but also supported by the strong slate of innovation and demand creation plan. And then third, looking ahead, we feel like we now have a stronger foundation that position us well for the future. If we look at our innovation pipeline, our margin management pipeline for the upcoming years, they're quite strong. We also now have put in place a solid digital foundation that's going to enable us to modernize capabilities, strengthen our brand, and reinforce our competitive advantage for years to come. And then finally, with the Gojo acquisitions, we're expanding our leadership in health and hygiene and adding a business that should structurally improve our growth and financial performance. So, NET, still more work to do, but we're relatively optimistic about the future.

Great. That's a good intro. So maybe starting with your first point, right, of improving top line growth in the second half of the year and starting with the categories. Obviously, you said your category was approximately flat in the first half of the year, but you saw a little bit of an improvement in January. Can you help us give an update on what you see at the consumer level, category growth expectation for the back half within your expectation of improving top line?

Sure. So for context, our outlook for the full year assumed that categories would be about, on US retail category, on average, flat to 1%. That is below our historical average of two to two and a half percent. Now, we also assume that there will be some volatility any given month and any given week. In the front half, we, like you said, our category average about on the low end of that range, about, you know, we're flat. And for the back half, we assume that they would continue to be flat to one percent. In the current quarter, we certainly saw volatility week by week. I think we were referring to earnings call where at the end of January, we saw double-digit increase as people were loading their pantry ahead of the storm. And that was followed up by double-digit decline in early February and bounced it back after that. Now, if I look at quarter to date, categories probably average about 1% on the higher end of that range. So we expect that. Although remaining of the fiscal year, we would continue to oscillate between flat and 1%.

I agree. And then to your point, like that's below historical growth rates for your categories. So as you look a little bit ahead, like in the next couple of years, what do you think you would need to see categories normalize more towards like 2%, 2.5%? And especially given the promotional environment has been a little bit more elevated in the U.S., Do you need that to kind of return to more lower levels to see the categories get back to like more the historical kind of like two, two and a half percent?

Yeah, I guess the short answer is we, you know, we're confident that, you know, the categories will normalize back to two, two and a half percent. But given the current environment, it's hard to predict when that might happen. And again, what we're currently seeing is essentially category being compressed, mainly due to value-seeking behavior, right? So consumers stretch their usage, they adjust the pack sizing as well as shift channels, and that's putting a little pressure on the categories. That's actually fairly consistent with what we've seen in the past when consumer was understressed, and then we saw that bounce back. What gives us confidence is we're not seeing any structural changes. Those are everyday essential categories, and if you look at the share of wallets spent on those categories, it's been remarkably consistent over a long period of time and in recent years. We're not seeing any structural change in at-home behavior, and we're also not seeing any significant trade-down to private level. So how to predict when it will not normalize. In the meantime, we're focusing on what we can control. And as, you know, market leaders, we have a, you know, it is our responsibility also to drive that recovery. And this is what we're doing in the back half with a strong slate of innovation, as well as RGM activities. And then the last thing I would say, the Gojo acquisitions, you know, will add a business that have... Categories that are growing probably closer to mid-single digits ahead of that average, and that should also help enhance our ability to increase growth.

Great. Zooming in maybe in some of the categories and your actions, to your point, to improve market share, maybe starting with Litter, you mentioned some of the changes in price pack architecture that you're implementing. How do you expect that to impact both volume and price mix? And do you think you can get back to better market share performance in Litter?

Yes, well, on Lidder, maybe let me first acknowledge that this is a place where we've not been happy with our performance. In Lidder, we've been plagued by a series of supply issues over the past few years, and we've been able to recover on each one of those issues. But we've fell behind from a value proposition and from a market share standpoint. And the other thing about leader, this is a category that has strong tailwinds driven by cat adoptions and also the fact that people are spending more and more money on their pets. So we haven't been able to fully take advantage of those tailwinds, and this is something that we are addressing. And the way we're addressing it is through a full relaunch of our leader. Sorry, a full range of our leader businesses. And so that includes change in formulations with better order control and dusting. That includes new packaging and new claims. That also include, we design a new and improved e-com and mobile experience. And that also includes some price pack architectures. We're getting sharper on a two-tier approach to the lineup. The one thing I would mention is this relaunch is really just the first step in regaining competitive positioning, and we have a strong innovation pipeline in the upcoming years. Now, from a price-backed architecture, in the long term, We really want to drive sustained volume-driven growth. In the near term, some of the activities we're taking will either be positive or negative from a price mix. If I look at the net, most likely volume might grow slightly ahead of organic sales growth for the time being.

And then another category that you're trying to improve performance as well as trash bags. Obviously, there's been a lot of promotional environment, an increased promotional environment in the category. Like, what are the main plans there in terms of improving both category growth and market share performance in trash bags?

Yeah, so in Trashback, I would say competitive activity and promotional level have been elevated, but as expected. And we've been very disciplined, and mainly leveraging RGM as well as innovation to address the heightened competitive activity. RGM has been... Allowing us to be very granular and much more real-time in addressing price gap, and we've been able to adjust, make surgical adjustments to specific SKUs at specific retailers, and that's been actually really improving market share. And then, of course, innovation is the only way to drive profitable category growth, and so we have a new... Line extension on a fourth flex platform, that's called LickGuard, that basically leverages a superabsorbent polymer at the bottom of the bag to absorb any liquid and prevent leaks, which has been a major dissatisfier in the categories. And so looking at some of those actions, we're seeing good momentum in Trash. We've been improving share and consumption consistently over the past couple of quarters. Private level was about flat in share last quarter. And while we have a little bit more work to do, we feel good about the momentum and the plans going forward.

On the cleaning business, that's been probably the best area of strength from your portfolio. And you talked about, obviously, the new Clorox Pure innovation. How significant do you see this innovation? And just in general, about expanding categories into adjacencies, right? That's something that both you and Linda mentioned recently. Is this the first step? Could we see more after the Clorox Pure? What are the opportunities there?

Yeah, I would say we're really excited by the Clorox Pure launch, and it really represents a meaningful platform opportunity for years to come. For perspective, this is a really large category that's growing really rapidly. There is about 100 million of people in the US that suffer from allergies, and there's a significant unmet need. Most people report still allergies returning, despite cleaning, despite medication. And right now, the current allergies remedy category is about $4 billion, and again, you know, growing rapidly. And so we feel like we have a right to play and a right to win in these categories. We have breakthrough patent-pending technology that enables us to destroy the protein, the allergen protein, before it can impact people and also is safe around kids and pets. We actually have significant retailer support. They see the same unmet need, and they've been engaging with us very early, and we also have a very strong marketing and influencing campaign, generally spending about twice as much as we would do normally on this type of launch. And then what's important, it's really just a multi-year innovations. We have already a strong pipeline, and we already start selling the next round of innovations to retailers. So, Net, we're excited, and we think this is a great opportunity for years to come.

Great. I guess on the innovation point that you just mentioned, how impactful is the innovation in the back half of the year? Are you seeing shelf space gains at retail? Can you help us understand how much visibility you have in that improvement as we think about your back half of the year?

Yeah, so what we saw to date is all the distribution gain associated with it, and they're generally in line with our expectations. And we'll see most of the benefits probably towards the fourth quarter, because as you know, most of the shell presets tend to happen in the spring. And then we need, you know, we need a few months to just really see how the innovation is tracking in terms of both trial, but also repeat.

Got it. And then on just your point earlier on price mix and volume for Litter, can you help us understand at the total company level, how you see also the backup shaping up in terms of compositional volume and price mix?

Yeah, so from a price mix standpoint, first thing to mention is there's still a lot of noise as you look at reported financials driven by the ERP transition. But if I exclude this, generally we would expect organic volume to grow roughly in line with organic sales for the full year. Probably net, maybe one point of negative mix for the full year. Now, that might vary from quarters to quarters, driven by... The seasonality of some merch events as well as innovations. But for perspective, the second quarter was about flat. And so we'll probably see a little bit of movement around that. But for the year, expect about one point of headwind from a price mix. Mostly, the way to think about it, this is mostly driven by value-seeking behaviors, right? People shifting size, channels, and offset by RGM activities and the benefit of innovation.

And then on the ERP front, obviously... It was a big undertaking for your part. You're largely behind it now. Obviously, you have to cycle in Q4, the shipments from last year. But as we think ahead of fiscal 27, can you help us understand the pieces that you will be cycling from both the top line and EPS? Obviously, you had 90 cents of negative impact at the EPS line. So how should we think about the base of which to grow into 27, both on top line and EPS?

Yeah, so the ERP, as I mentioned, the ERP created some noise. For context, we launched a new ERP in the US at the beginning of the fiscal year. And as we went with the implementations, we basically had to turn off the old system and, you know, waited a week to transfer all the data and then turn on the new system. And when you're turning it on, it takes a little bit of time to ramp up shipments. So what we did is essentially ship two weeks of inventory. ahead of that implementation and shifted two weeks from fiscal year 26 into fiscal year 25. And those two weeks represent about three and a half percent of sales. And so on a year-over-year basis, since I have overstated fiscal year 25 and overstated 26, I have about 7% of Edwin. Now it's only temporary noise, and that will actually reverse next year. And so what that means from an EPS standpoint is next year, we will step up the fiscal year 26 basis to get to fiscal year 27 by 90 cents. And then we will also see about three and a half percent of sales.

Good morning, everyone. Great. Maybe shifting to margins, obviously, there's a lot of questions more recently with the spike in oil prices post the conflict in the Middle East. Can you give us any perspective of the potential implications on the resin side, which usually takes, there's a little bit of a gap, and then on the transportation and freight side, as you think about it? I know it's very recent, but any thoughts there?

Yeah, as you mentioned, very recent and still very much developing and very dynamic. So we're working on many different scenarios right now. It's a little early to tell what might be the impact, but suddenly we'll have better perspective at the end of the quarter when we release results. A few things to think about. For sure, the duration of the conflict, you know, is definitely a main driver here. We would expect, you know, Edwin's from a cost standpoint, mainly energy, you know, driven, energy communities driven. As you mentioned, it takes a little bit of time, you know, to show up just because we have transfer price, you know. May have a month or two lag, and then we also have some inventory. So we don't expect, you know, that it will impact our third quarter, but, you know, it could impact our fourth quarter and beyond, depending on what's happening.

We'll have to see in logistics.

Generally, in the past, what we've seen is when you have disruptions globally, it tends to impact your logistic network, and there's a lot of externalities, so we're looking into this. Beyond the cost, we're also staying close to what might be an impact on demand, and again, too early to tell. And then the last thing I would say is we do have operations in the Middle East. About 2% of our sales are in the areas. So far, we haven't seen major disruptions, but that's another area that we are monitoring closely. So again, developing and dynamic, we'll stay close to it. But right now, it's too early to tell what might be the impact. Right.

And then thinking about the other drivers of potential margin and offsets to these pressures, obviously you have the glad JV benefit starting to flow through in the second half of the year. Any other big levers that you can pull in terms of trying to offset any cost pressure that might materialize, especially at the gross margin level?

Yeah, I think a few things. First, if we step back, in general, we feel really good about our ability to expand margin over time. I think, as you know, in fiscal year 22, we lost about eight points of gross margin at the height of the inflationary cycle, and we've been able to fully rebuild gross margin to prepare pandemic level. And that's really a testament to kind of our new approach on margin management, which... You know, it's been, you know, the evolution of an old cost savings program that were in place for decades. And we're now adding new capabilities like design-to-value, RGMs. We brought a lot of new experts and talent, you know, in teams, as well as now leveraging our digital foundation that we put in place. So that's the good news. We've been delivering record-level cost savings, and we feel really good about the pipeline going forward. Now, specifically to this fiscal year, If I exclude the noise of the ERP, we're essentially looking at gross margin to be declining in the front half, and then expanding in the back half. And when you compare the front half and the back half, there's a few things to consider. First, in the front half, I had to incur additional expenses, more than expected, to deal with the stabilization of the ERP and optimizing services. Those costs will start coming down in the back half. And then we also add a little less cost savings in the front half than the back half. Some of it is just regular timing of project, but the other is the fact that I had to use more resources on the stabilization of ERP and delay some of the cost savings projects. So that's between the front half and the back half. And then in the back half, I have a little bit of phasing between the third quarter and the fourth quarter. First, some of those additional expenses associated with ERP will still continue in Q3, but then probably go away in Q4. And then I have a little bit of timings between one-time and manufacturing expenses that bring Q3 down and bring Q4 up. But so net, right now, we feel confident in our ability to expand gross margin in the back half, but we'll probably see most of that in the fourth quarter.

And on that point, on the fourth quarter, you obviously also have the reversal of the cycling of last year ERP shipments. So how should we think about that impact on your gross margin bridge? Because obviously it was a benefit in the fourth quarter of last year.

That's right. I think the easiest way to think about it is when you look at an absolute gross margin standpoint, there's no implication. The only implication is that last year was slightly overstated. So, you know, it will have an impact of over 100 basis points when you look at a year-over-year comparison.

Makes sense. And then I guess, thinking about below the gross margin line, there's still an opportunity on SG&A, given your medium term target there. Can you help us understand what are the drivers there? Like, obviously, you made a big investment in digital transformation, and this is like the last big year of spending. So should we start seeing some ROI into fiscal 27? What are the areas where you're expecting to see some benefit?

Yeah, we feel good about our ability to drive productivity in SG&A over the next few years, probably starting 27 and then 28. There's a few things. First, with the investment we made in ERP in digital transformation, we expect to see a lot of automation. Which will drain productivity. And in addition, we're going to be able to expand our global business services capability. In the past, it was hard to do so with really outdated infrastructure. But now that we have a modern standard global data infrastructure, we can do more of that. And just there, we see millions of productivities over the next few years. So those are the main drivers.

Great. And I guess on that point, like on the long-term outlook, we get a lot of questions, obviously, like the return, right, to like organic sales, three to five, operating margin, 25 to 50 business points. I guess what are the key points that you need to get more consistently there on a sustainable basis from a category standpoint, from a market share, and in terms of like some of the drivers that we discussed on the margin front?

Yeah, I would say on the growth side, our algorithms just assume that category, you know, normalize, US retail category normalize to 2 to 2.5% per year. And we just talked about it. It's, you know, we feel confident that they will do so. It's hard to predict when. So right now, we're really focusing on what we can control. And that's, I think the back half is a good example of that, where there are strong slate of innovations, strong demand creation plan, and also RGM initiatives. And so we're seeing sequential improvements, you know, in the back half. And that means that we're going to exit with stronger fundamental and better momentum than where we started. Good morning, everyone. We actually feel that we're well positioned to continue to accelerate growth beyond the back half. I'd mentioned earlier, we feel really good about our innovation pipeline for the years to come, and we're just starting now to scale new capabilities like RGMs. Beyond that, we continue to see international and professional businesses being outsized growth contributors. And then over time, as I mentioned, the acquisition of Gojo is also going to structurally accelerate the growth of companies. So that's on the growth side. So I think, again, Feeling relatively optimistic in improving and accelerating growth going forward. Margin, I just mentioned it, you know, it will depend, some of it will depend on the cost, you know, environment, of course, but on what we can control. We feel like we have a very strong pipeline of margin improvements. Some of it is, you know, is driven by our current efforts. And that includes, you know, a lot of potential saving and procurement, logistic and supply chain. But of course, now that we're past the ERP implementations, we also see a new source of productivity coming from the ERP, and that impacts supply chain and manufacturing logistics, but also impacts the working capital and inventory. And so that really strengthened the pipelines for years to come.

Great. Maybe talking about the Gojo acquisition that you mentioned a few times, so obviously the Purell brand, great brand, very well established, solid growth, right, mid-single-digit growth you mentioned. Maybe first, what got you excited about this brand? Where do you see the biggest opportunity? And I think on the call, the last call, you mentioned the opportunity to accelerate growth, maybe to more mid to high single digits. So where are those opportunities to get the brand to further accelerate?

Great. Yeah, very excited about the Gojo Acquisitions. Again, it really allows us to expand our leadership in health and hygiene, and I think will help accelerate both the growth and financial performance of the company. Maybe I'll mention two things. First is the Gojo Acquisitions represent an investment in leaning into a place of strength. Our health and wellness segment is our largest segment. It's been the fastest growing, and you're growing about, you know, 4% in the past 10 years, and it's also the most profitable. And then if you really look at the Pure Oil brand, it really… You know, mimic a lot of what we're seeing in the Clorox brand in many different ways. It's ubiquitous, it's highly trusted, and science and innovation driven. And then the other thing is, we see this acquisition as a strong strategic and cultural fit, you know, whether you look, you know, Purpose, values, the companies are very well aligned, and then the business are complementary. You know, the Clark's business is mostly focused on surface cleaning and 80% in retail, 20% professional. The Purell business is mostly focused on skin hygiene, and it's 80% B2B and 20% retail. And so when you look at the combined business, we think that we have a lot of scale and ability to activate growth. So that's the first thing. The Gojo business you mentioned itself, you know, represents a strong growth opportunity for us. First, you know, it's actually participating in categories with, you know, strong tailwinds, both in B2B and in retail. And we see opportunities to further accelerate this. It represents about $800 million business that's been growing mid-single digit, as you mentioned, and really driven by, you know, category tailwinds. And on B2B, we see opportunity to accelerate this through cross-sellings. Both businesses have strong... Presence and positions in the professional business, but in different verticals. You know, one business might be, you know, stronger in healthcare, another business, you know, might be stronger in schools and offices, you know, verticals. And so that's very complementary. And so when you actually combine the businesses, you're able to bundle a larger offering and then cross sales, you know, to those different verticals, reducing complexity, you know, for the end users and the distributors. And just since the announcement, we actually heard a lot of excitement and interest from our partners, which kind of validates that. Now we still need to close before we, you know, we act on this. And then on the retail side, we also see opportunities to accelerate growth. The Purell brand is in, you know, extraordinary brands with tremendous amount of awareness and trust. But the, you know, the reality is there hasn't been a lot of investment in retail activations, in brand buildings and innovation on the retail side. And so we feel like leveraging Clorox, consumer insight, brand building, innovation engine, and...

Great. Yeah, maybe on that point, on the retail opportunity, brand has been around for a while. Distribution is already pretty elevated, but to your point, there is an opportunity to innovate the brand, and we've seen premiumization, especially in the hand sanitizer with a lot of different other brands. that have innovated more at the premium point. So how do you see the strategy there? Like, do you see an opportunity to elevate the price point or to have different price proposition within Purell? Like, help us understand, like, the retail opportunity.

Yeah, I mean, I think there's a few first, you know, pretty basic things. There's very little merchandising happening on this brand just because they don't have the scale. And so if you think about, you know, the integrated and pretty large effort we have around cold and flu merchandising, as an example, we can just, you know, take advantage of that by, you know, joining Purell with Clorox. So those are pretty basic things, but, you know, they're significant. And then, of course, you just mentioned it, there's an element of brand building and there's an element of innovation. Innovation is really about, you know, increasing, you know, increasing form, increasing usage. As you mentioned, there's a lot of new consumers with new needs coming in these segments, as well as potential expansion into adjacencies. So, you know, too early to go into details, but, you know, we do see a lot of upside there.

Great. And then on the cost synergy front, you mentioned $50 million in cost synergies, which is probably pretty conservative given the complementarity of the business you mentioned that could be upside there. Can you walk us through the key buckets of cost synergies and where you could see upside?

Yeah, as you mentioned, the acquisition case included about $50 million. We think it is, you know, conservative, and we have a high degree of confidence that we will achieve those. And, you know, there could be some upside, especially when we start to leverage our holistic margin management efforts. Now, yes, there is a… A lot of overlap, you know, between the business. And so we see cost synergies across the cost structures. And, you know, if I look at the 50 millions, they probably be split evenly between supply chains, as well as operating expenses. Now, the one thing I've mentioned on the synergies is from a timing standpoint, we expect most of them to come by year two or threes. But we, you know, we're being very thoughtful, as you can imagine, on how we integrate. We have strong governance in place that's, you know, clearly sequence and well resources, and we will balance going after synergies while ensuring that we de-risk and manage the integration well.

And then on the revenue synergy side, you mentioned the cross-selling opportunity. That's not part of your official part of the model, but how do you see the opportunity both on the B2B side and the retail side in terms of cross-selling?

Yeah, cross-selling, I just mentioned it to you, a lot of it has to do on the B2B side and the fact that we have difference-related... Our relative presence in different verticals is complementary, and so I think essentially by offering a broader end-to-end hygiene solutions, we're able to unlock sales with some end users and distributors that we couldn't before. That's the main one. I would say on the retail side, the example I just gave you around just using merchandising together across brands is another opportunity in the short terms. And as you mentioned, a lot of those opportunities tend to be upside to our business case, which, again, give us comfort in the fact that... This acquisition should deliver strong returns for the company.

Great. Maybe shifting to capital allocation, obviously, that leverage post-acquisition is going to increase to about a bit over 30 and a half times. But just can you give us a sense of like your return to like your two and a half times goal and like the ability to deliver potentially even quicker and how does that change your medium term capital allocation?

Sure. I would say... Um, right now, you know, balance sheet discipline and delivering is the top priority from a capital allocation standpoint. Um, as you mentioned it, the, we expect our debt leverage to temporary increase to about 3.6, you know, times by, you know, the end of the fiscal year, driven by, you know, the acquisitions. And we... I think we can bring it down to about two and a half, which is the high end of our targeted range by the end of calendar year 27. Part of it is, you know, the fact that we, you know, we're delivering strong free cash flow as a company, but the other part is, so is Gojo. And so, you know, we're able to actually leverage those cash flows, you know, to deliver. And we also anticipate to have some tax benefit associated with transactions will help us to get there. Now, as we're focusing on delivering, we'll continue to support our dividends. Our commitment there hasn't changed. We have a long track record of increasing dividends for decades, and you could expect this to continue. But while we deliver, we will suspend share repurchase until we meet our target leverage.

And then thinking a bit more medium to longer term on capital allocation, how important is M&A post after you get back to your target leverage ratio, like going forward in terms of seeing potential deals similar to Gojo going forward?

Yeah, I mean, we have actually been... While we haven't, you know, transacted in a while, we have been very active, and we've just been very disciplined in trying to find, you know, the right asset that's a strategic fit at the right price and generating the right returns. So we continue to be, you know, active in evaluating opportunities. Until we deliver, it's likely that M&A will take a little bit of backseat. But once we meet our leverage targets, we'll definitely intend to be active again. Great.

And then on the divestiture side, you exited the VMS business in 2024. Are there any other parts of the portfolio that you're reviewing for potential rationalization of portfolio or potential exits? Or do you think the portfolio in the current shape is in the right place?

Yeah, I would say, as of now, we like our portfolio as it is, and there's really nothing to share. Having said that, we have been active in doing regular portfolio reviews with our boards to ensure that long-term value is aligned with shareholder returns. And this is what really drove the divestiture of Argentina and VMS, as you just mentioned. And we were quite pleased with both of those divestitures. We think it really strengthened our portfolio. It helped, you know, reduce the volatility and increase both our growth rates as well as our margin. And more importantly, or as importantly, I should say, it enabled us to shift time and resource to businesses that had better growth opportunities. So, again, you know, as of now, we like our portfolio as it is, but, you know, we will continue to evaluate and see if there's any additional opportunity for divestitures.

Great. And maybe just a last question, just taking a step back, you've obviously had a… Like a big implementation of all the strategic changes with Linda, the digital investment, like a lot of the heavy lifting is behind you at this point. So as you look ahead over the next couple of years, like what are you most excited about as you think about like starting to see some of the ROIs from all these initiatives and potentially getting also the top line to accelerate in the market share?

Yeah, our focus in the short, medium, and long term is really about accelerating growth, and we talked a lot about it today. I think the synchronization improvement in the back half is a start, and I think we're, as you mentioned, with the investment that we made, we're well positioned for the future. I think the digital foundation that we have is really going to start modernizing a lot of the capabilities we have, and with that, strengthen our brand and accelerate growth. And from a margin standpoint, you know, as I said, we feel like we have a strong, you know, pipeline going forward. And if anything, the implementation of the ERP is actually giving us extra fuel for productivities for years to come. So hopefully enable us to expand margin and reinvest in profitable growth.

Great. That's a good place to end. Okay.

Thank you so much, Leuk. Thank you, everyone.