Church & Dwight Co.Inc. (CHD) Q4 2020 Earnings Call Transcript

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Church & Dwight Co.Inc. (CHD -0.87%)
Q4 2020 Earnings Call
Jan 29, 2021, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Thank you all for joining us today. I'm going to begin with the safe harbor statement. I recommend that you read it at your leisure. We have our entire management team on the call today available for Q&A after the formal pitch. We have a lot of slides and several presenters but I'm going to give you the short story upfront.

2020 was a turbulent year. We emerged from 2020 much stronger as a company. We like to say that we do our best work and we're going to jam. That's true for 2020. We protected our people, we found a way to run the plants and warehouses safely, we set production and shipping records, we figured out how to make hand sanitizer in our U.K. plant, we operated the company with 2,000 remote employees, we pivoted our marketing messages to support a 60% increase in e-commerce sales, we installed the new packaging lines with the assistance of off-site engineers using Google classes, we added overflow warehouses, and we validated new suppliers and co-manufacturers.

In our communities, we delivered masks and hand sanitizers to hospitals where we live and donated to food banks, and recently our Mason City, Iowa plant loaned an ultra-cold freezer to a local hospital to store the COVID-19 vaccine.

Consumer demand drove huge sales growth, which enabled us to overcome significant incremental COVID costs and incremental U.S. government tariffs. But it also gave us the opportunity to invest in our future, which we did in the second half.

Looking ahead to '21, we're optimistic that the vaccine will help the global business environment. We operate in many categories and we do expect pluses and minuses, depending on the category. All in, we expect to deliver 3% organic sales growth and 6% to 8% EPS growth in 2021. And this is on top of almost 10% organic growth and 15% EPS growth in 2020, which exceeded our 2020 outlook when we last spoke in October. Our Evergreen model is intact.

Before we start the formal part of the program, here is a brief video that is a look back on 2020. [video playing]

Okay, here's today's agenda. I'm going to begin by describing who we are as a company, I'm going to be followed by Britta Bomhard, who is our Chief Marketing Officer. Britta's going to talk about the categories, how they performed in 2020 and how we expect them to perform in '21. Steve Cugine's going to come up and tell us about our new products in '21.

Steve Cugine, by the way, will be retiring in the middle of '21. Steve has had a spectacular career with Church & Dwight, spanning over 20 years. For the past seven years, he has been running our international business, which has been a stellar performer. And Steve is going to introduce Barry Bruno, who has been with the company for a number of years and he has been Steve's right-hand man in growing the international business. So I give him a warm welcome today. I'm going to come back and talk about the animal productivity story as well as how we run the company and also talk about our M&A platform. We're going to wrap up with Rick Dierker, our CFO, to run us through the financials.

And now, who we are. Whether you've been a short term one year shareholder of Church & Dwight, three, five, 10 or 15 years, you're very pleased with our performance. We have been a stellar performer in the CPG space for many, many years, we're known for our consistency. And one of the reasons for our consistency is our Evergreen model. Every year, we expect to grow our top line organically 3% and our bottom line 8%. That's true in '21, it will be true in '22, '23, '24, '25.

You might ask, how's that been working out for you? Well, if you take a look back over the last 10 years, you'll see that we've exceeded the 3% target every year except 2013 and 2017. With respect to 8% EPS, you can see over many, many years, we're consistent. So Church & Dwight is a consistent performer. We have an Evergreen model that is very familiar to all of our existing shareholders, 3% top line, 8% bottom line.

Now, where does the 3% organic growth come from? Well, 2% from the U.S., 6% from international and 5% from the specialty products. This is our evergreen target, but it also happens to be the targets for 2021. We expect to deliver these three numbers for each of those divisions in '21. We focus on power brands, we have 13 power brands in our company that are displayed here on this chart. And those 13 power brands, deliver 80% of our revenues and profits.

And we're very balanced as a company. About half of our consumer business is in household and half is in personal care and we have a small specialty products business, which is a combination of bulk sodium bicarbonate and animal productivity products. We have a nice split between premium and value, 58% premium and 42% value. What this means is, we operate and perform well in virtually any economic environment.

With respect to our geographic split. We have a lot of room to grow internationally. We're largely a U.S. company, only 17% of our consumer business is international, so lots and lots of runway. That's going to generate a lot of growth for us in future years. One of our big advantages is that we're nimble, we're small, we only have 5,000 employees. We have the highest sales per employee of any CPG company, and it helps us three ways. Quick decision-making, ease of communication and ability to adapt. And the ability to adapt was highlighted in 2020 when you saw how we reacted to the pandemic.

We have a long history of growth through acquisitions. If you went back to the year 2000, the only brand we owned was ARM & HAMMER. We were up only $800 million in sales in the year 2000. In '21, we're going to cross $5 billion. And of those 13 power brands, 12 of them were acquired since 2001. If you go back just a few years in 2015, we were a laggard when it came to online sales, less than 1% of our sales were online. At the end of 2019, it was 8%, at the end of '20, largely due to COVID, it's over 13%. So we regard us as a leader now, with respect to e-commerce.

We have a low exposure to private label, only 12%, and if you look at the categories, there's only five of our 17 categories where we have significant private label share and those shares have been pretty stable over the last five years.

Now, I'm going to bring up Britta Bomhard, our Chief Marketing Officer, to take us through the categories in the U.S. business.

Britta Bomhard -- Executive Vice President and Chief Marketing Officer

Welcome to our biggest business consumer domestic with over $4 billion in sales. As you have heard from Matt, we plan to deliver another year of growth in 2021 on top of an outstanding performance in 2020, and in line with our Evergreen model. There are five distinctive drivers for our growth in 2021. Number one, tailwinds on vitamin gummy category growth accelerated by strong brand, Vitafusion. Second, Waterpik, despite dental offices and many retailers being closed for part of the year, we sold slightly more power flosses in 2020 than in 2019. Removing these roadblocks, growth will be even stronger.

Three, Flawless sales will benefit from new products, a great influencer boost and a rebound of footfall. Four, some brands will rebound where social distancing really impacted sales. With vaccines coming, consumers will socialize more. And five, last but most importantly, we strengthened our brands and improved our media spend effectiveness. We create brands consumers love. 2020 was a year of dramatic changes, how consumers use media, which allowed us many test-and-learn experiments feeding our predictive data model and giving us confidence that our media dollars will be again more effective in 2021.

But, let's start with tailwinds. We are in the right categories. We saw growth in 12 of our 17 categories, average 9.8% overall. We saw an over 50% growth in vitamin, double-digit growth in baking soda and single-digit in many other categories. The only category with double-digit decline is Power Flosses, and that is in the Nielsen universe. This is important as Nielsen only measures about one quarter of Power Floss's sales. And I will show you numbers from the whole universe later.

We have high expectations for category growth in 2021 and I will speak to them in more detail. Four categories will stay on elevated levels, five categories will come down from COVID peaks but some to higher levels, five categories will bounce back from COVID impact, three categories will be steady. The underlying brand for category growth is household penetration. As you can see in this chart, 11 of our 17 categories increased household penetration. This means more consumers are buying this category. It wasn't only consumers buying these categories, they bought our brands in unprecedented numbers. We added 8.6 million households to ARM & HAMMER, More Power to You, 2.4 million to OxiClean Stain Fighter and in the second half alone, Vitafusion added 3 million more households.

We know that we have category-leading repeat rate. This means once these households experience our brands, they enjoy them and come back to them, laying the foundation for strong growth in 2021.

Let's look at some of the category behaviors one by one. Vitamins grew an amazing 58% in consumption. You can see the original stock up peak in March, but also that increased levels continued for the rest of the year. It takes 66 days to form a new habit, and consumers clearly formed new habits, regarding taking vitamins. 20% of consumer started taking vitamins, 57%, that means more than half, are now taking vitamins daily. So it's not only more consumers taking vitamins, they also take them more frequently, and another one-third of consumers plan to add more types of vitamins to their baskets, planning to add immune-strengthening, for example.

Last but not least, when taking vitamins, consumers preferred gummies over other forms. You can see that the share of gummies on total increased by nearly one-third, that is, it is now 23% and who would be better placed to profit from that growth than the number 1 vitamin gummy, Vitafusion.

Let's look at the category of Power Flosses. Nielsen only captures about one quarter of category sales, that is why I show you unit sales across all classes of trade and you can see that after the decline at the beginning of the year with the lockdown, there was a strong rebound. In total, for 2020, we achieved slightly more unit sales than in 2019, despite dentists and certain retailers being closed for significant periods of time, which also means that we came out strong by the end of the year and this momentum will continue and only accelerate with more dentist office opened up and resuming higher traffic, there is only upside.

Women's grooming saw two opposing trends. On one hand, retailer stores closed over reduced foot traffic reducing sales, on the other hand, spa closures in COVID concerns driving do at home movement and increasing sales. Our Flawless team quickly spotted the trend and turned it around with spa at home products, which have just launched. We now offer solutions for women who do not want to go to a beautician and get a face massage or do not want to visit to the nail salon. And as nail salons and spas have closed down due COVID, we believe that women will continue to prefer at-home treatment.

So here are two of our exciting new products. A facial massage cleanser and a salon nail tool kit. Steve will talk more about them later. Moreover, we have secured an icon to speak for the brand, Halle Berry, who will be even more popular, if that's even possible, in 2021 due to the launch of her new film, Moonfall. In addition, we have Ashley Graham, Amelia Hamlin and Dove Cameron as enthusiasts promoting Flawless. It will be an exciting year for Flawless. Flawless means being perfect to you. Be you, be flawless.

Now to our biggest category, laundry. As you can see, laundry grew 5.5% in 2020 but was a lot of swings due to consumers' stockpiling and changing habits. Being more concerned about germs and being home, allowing for more time to do laundry that will continue as tailwinds for 2021. Cat Litter will also benefit from changed habits that continue. It is hard to get good statistics on cat ownership but we do know that 6% more households bought Cat Litter in 2020, leading me to believe that this is the minimum of additional cat owners. What this number won't capture is the households who got additional cats and as consumers want to spend more time with their cat instead of going to stores, we have seen a significant increase in online sales, which are not captured in these Nielsen sales.

Then, there are categories, which are impacted by social distancing. We call these the social interaction categories. One of them is dry shampoo, where we had seen category decline due to store closures and like browsing in store. Here, the advance of vaccination and the associated expected increase of socializing will bounce back the category. And even more eagerly awaited bounce back of sales is in the condom category, as condoms mean pleasure. 18 to 24 year olds can't wait to get their social lives back and with college campuses reopening, 2021 looks promising.

Now that we've gone through the different categories, let me summarize changed consumer behaviors due to COVID that we think will stay and help our business. Number one, self-care at home for our hair care and removal hair businesses like Nair and Flawless, cat ownership for Cat Litter, higher consciousness of germs and cleanliness benefiting ARM & HAMMER, OxiClean, XTRA but also Kaboom, and four, awareness trend with a regular daily intake of supplements, Vitafusion, L'il Critters and Viviscal will benefit, and Waterpik for gum health.

It is not only category growth that will drive our business, it will also be the strengths of our brands and the ability to win market share, which we have proven year-over-year. We have brands consumers love. In 2020, a year with difficult supply situations, the majority of our brands, which means seven out of our 13 power brands have grown share. We are set to continue our market share winning streak. Let me get back to what I outlined at the beginning, as growth drivers, brand equity and media effectiveness.

2020 was a year where consumers radically changed consumption but also media behavior. This is a marketeer's dream, because it allows for a lot of test and learn and very distinctive data set. As you are familiar with data analytics, we now have great input to our media effectiveness model and are confident to drive even better ROIs in 2021. Let me just share one area. It is not only consumers who love our brands, it is influencers as well. We have more than 500 influencers globally enjoying and recommending our brand. We have reached more than 200 million consumers via those recommendations and this number will definitely grow in 2021. What will the influencers write about? About some of our exciting new products.

I hand over to Steve Cugine to share what we are launching. Enjoy.

Steven P. Cugine -- Executive Vice President, International and GNPI

Church & Dwight has delivered consistent new product innovation, year-in and year-out, in support of our global growth objectives. 2021 is no different, we have a super lineup of brand-building innovation, so much so, we do not have the time to take you through the full list. So we have curated a few of our favorites.

Every new product is born from a consumer insight. 79% of our consumers want germs removed from their laundry, introducing OxiClean Laundry and Home Sanitizer. This product kills 99.9% of bacteria and viruses, it also removes germs, odors and stains. Check out this video. [video playing] Consumers have been hyperfocused on cleaning household surfaces. Introducing OxiClean multi-purpose disinfecting spray. This product kills COVID, it is powerful, cleaning and disinfecting without chlorine bleach.

Two-thirds of consumers find flossing difficult and only 16% floss daily. Introducing Waterpik Sonic-Fusion 2.0, the most successful new product launch in power flosser history just got better. It has two times of bristle speed, greater flossing power, multiple head sizes and two brush speeds. Here's another consumer insight. Consumers with smaller bathrooms struggle with counter space and outlets. Introducing Waterpik ION, the same amazing clean, unplugged. This product is 30% smaller than traditional plug-in models, has 90 seconds of water capacity and with a lithium-ion battery that lasts up to four weeks with a single charge. Check out this video. [video playing]

Here's another consumer insight. Men seek condoms that fit and feel the best. Introducing Trojan All The Feels, it is a selection of our best condoms with personalized fit and feel and better feel equals more usage. Here is a video featuring our Ecstasy condom. [video playing]

One more consumer insight is that consumers are becoming more confident in doing beauty routines at home and they are aware of the cost savings. Introducing Finishing Touch Flawless facial cleanse and salon nails.

And one last consumer insight. 33% of consumers plan to purchase more immune-support supplements. Introducing Vitafusion Super Immune Support. It is the only gummy to deliver over 100% daily value of the top three immune ingredients, Vitamin C, zinc and elderberry, it also includes a new ingredient, Manuka honey. This is the first Vitafusion item in the cough and cold aisle. Vitafusion has been increasing the amount of new items it has been launching, 2021 will be no different. We have an exciting lift of new items coming.

I'm also excited to share with you the details of another fabulous quarter and year for the international division. 2020 was like no other year as we track the coronavirus as it surged across the globe starting in Asia in Q1. We planned for its impact and pivoted to areas of growth as our international mix is heavily weighted toward personal care versus household products and therefore, more susceptible to global store closures, particularly in Europe.

We finished 2020 posting organic growth of 8.6%, well above our 6% Evergreen goal. This is remarkable given the fact that during Q2 at the height of the pandemic, we delivered less than 1% organic growth for the division. Q4 finished up a remarkable 14.9% behind growth in both our domestic subsidiary markets as well as our GMG business, where a resurgent Asia was a key driver of performance. We have now built an international business that's over $800 million and approaching scale in key markets and we feel that there is not a market that we cannot reach. We've also tripled the historic CAGR of the division from 3% to 9%.

Wait a minute, I didn't label this slide The Cugine Effect, it must come from my friend, Barry Bruno. Well this seems like a good transition point from looking at the past performance to Barry Bruno and his focus on the future. I will be retiring from Church & Dwight in June of this year. Barry Bruno has been promoted to Executive Vice President of the International Consumer Products division.

Barry was one of my first hires when I moved into this position almost eight years ago. He has been the co-architect of the existing international strategy. Barry has led the design and execution of the Global Markets Group and the divisionwide global international marketing team. His fingerprints are all over the success of this business in conjunction with the other members of the division leadership team. Barry came to Church & Dwight from Johnson & Johnson, where he worked for 14 years across consumer, pharmaceutical and medical device businesses, where he developed a depth of experience in both U.S. domestic and global markets during his time there. He turned that experience into a great start here at Church & Dwight and I have confidence in his ability to continue what we've started here in International. Congratulations, Barry, and good luck.

In closing, it has been my sincere pleasure to work for this great company for the past 20 years. The culture at Church & Dwight is a place where performance matters, straight talk is encouraged and teamwork is a differentiator. I stayed at Church & Dwight because I felt that I could bring my unique self to work every day, cable big ideas that challenge the status quo, and when the decision was made, I know I had the support of my peers to make it happen. This is as true today as when I joined in 1999. I am confident in the future as the company and the international team is stronger today than ever before. Thank you, and now over to Barry.

Barry A. Bruno -- Executive Vice President, International

Thanks, Steve. It's been an honor to work alongside you these last seven plus years here in International and I can assure you that the Cugine Effect is felt far beyond just us here in International. And your work over 20 plus years has impacted the entire Church & Dwight organization. You will be missed by so many Steve, but I think most of all by me. As you saw under Steve's leadership, we've built International into an $820 million business that's growing faster than ever.

And as a reminder to this audience, we think about our International business in two buckets, our subsidiaries, where we have fully staffed Church & Dwight teams on the ground in Canada, Mexico, U.K., France, Germany and Australia, and our Global Markets Group, which covers 130 other markets via distributors who represent our brands. I'm going to get into both shortly. However, this chart shows the relative size of each in net sales. As you've seen, GMG has been on a tear and now represents 34% of all international sales, followed by Canada and our European subsidiaries and then, our Australia and Mexican subsidiaries.

From a growth standpoint, our subsidiaries grew plus 4.8% in 2020 and GMG continued its stellar run with explosive growth of plus 19%. What's noteworthy here is that our international business is much more heavily weighted toward personal care products than our U.S. business, which makes these results even more impressive in an environment where COVID slowed down many personal care categories.

For some additional context, our subsidiaries have been delivering outsized growth, more than double historical CPG category averages and some of our key subs are now for the first time approaching scale, which we'll talk about as the margin improvement enabler a bit later.

As I mentioned earlier, GMG is now our largest entity with outstanding growth of plus 19%. Emerging markets in Asia, the Middle East and Latin America have been and will continue to be growth drivers going forward. Last but not least, you know how acquisitive we are, and I'm happy to share that we've delivered double-digit growth on Waterpik and Flawless in 2020 and they remain far underrepresented in international household penetration than in the U.S. lead market.

If we look a level deeper in key drivers, in our subsidiaries, we continue to make great headway in turning our U.S. domestic power brands into international power brands. ARM & HAMMER, OxiClean and Trojan are all examples of U.S. power brands, which still have long international runway in our subsidiaries. Likewise, Waterpik and Flawless' household penetration in our subs trailed the U.S. significantly and we're lifting and applying best practices from the U.S. to drive subsidiary success on these brands.

Finally, we're approaching pricing with greater rigor and discipline and hiring dedicated resources in international to help us understand where pricing opportunities exist. From a GMG standpoint, emerging markets have been a big area of focus and we are significantly under-indexed in these key markets versus our competitors. For context, our top CPG competitors derive over 25% of international sales from emerging markets in which we both compete, while C&D only realizes only 7% of our international revenue from them. Today, we're spending more in these markets and we'll continue to prioritize them going forward.

From an acquisition standpoint, our distributor coverage in 130 plus markets gives us a great footprint for expansion and we've been making excellent headway on new acquisitions like Waterpik and Flawless, but we're also still making excellent progress on some of our older acquisitions like Batiste and our VMS brands.

Last but not least, we are working with our supply chain partners to evolve from our export origins, where we ship products from the U.S. and the U.K. where they're made today to more local manufacturing, particularly in Asia. Speaking of Asia, I don't think it will come as a surprise to you that the region contains some of the largest economies in the world. However, what you might find interesting is the visualization here showing if there are more consumers living in Asia than in the rest of the world combined, including 4.5 billion middle income consumers who represent our target audience for Church & Dwight brands.

In recognition of this and the terrific future growth opportunity that exists in Asia, we now have C&D representative offices in Shanghai, Singapore, and just last month opened our first India office in Mumbai, to help drive growth in that new market for us.

From an acquisition standpoint, Waterpik and Flawless are our primary areas of focus and our key subs we've delayered by removing distributors and are now leveraging our own sales force to sell direct. In terms of GMG, we continue to expand into new markets via distributors with two very recent examples being our launch of Waterpik in Japan and of Flawless in India, in just the past few months.

Finally, we're bringing C&D's marketing, e-commerce and pricing expertise to bear on these brands to make sure we're leveraging our capabilities, which are often broader than those of the companies from whom we acquire brands, so that we can drive efficient profitable growth all around the globe. If we dive deeper into Waterpik as one example, we've doubled the business in the last three years, growing from $50 million when we acquired the brand to $100 million in international sales in 2020, and we're doing it by leveraging best practices and proven successes like professional detailing, consumer marketing and compelling in-store display activation, all borrowed from the U.S.

We know this is a winning formula as we doubled the business already. However, what's even more exciting is the runway ahead of us that exists due to very low household penetration in comparison to the lead U.S. market.

In terms of Flawless, it's a brand we love that's still in its very early days internationally. However, you heard Britta talk about the powerhouse influencers that we're leveraging in the U.S. and I'm happy to share that we're using them abroad as well, with plants in 10 of our largest global markets that are sure to drive awareness and trial of this great new addition to our portfolio.

I mentioned earlier that we love all of our acquisitions here in international, even those that are a bit older and an example of how we're still greenhousing some of these older brands can be seen first with Batiste where we've grown at a 20% CAGR over the last five years and are still under-indexed in household penetration versus our lead market in the U.K. We continue to launch in new markets and drive household penetration in existing markets and again have lots more room to run with household penetration less than 2% in most global markets.

Finally, we can't forget about VMS. We've owned it a little bit longer, but the trends that we see in the U.S. are the same abroad and I'm happy to share that VMS is booming for us internationally as well. One example of a market where we're investing significant time and resources on VMS is in China, where sales were up more than 30% in 2020. So again, long runways even on acquisition we've owned for a while now.

Okay, so how are we doing it? Well, we're making strategic investments in areas that have the biggest impact. For example, to support our booming e-commerce business in China, we are ramping up hiring of our own e-commerce staff to help augment and better direct the efforts of our multiple partners in China. India is a vast and complicated market and we knew we needed boots on the ground, so we've hired our first staff there just a few weeks ago.

Another complicated area is global pricing where we are now building strategies to take advantage of pricing power in order to understand where we can take price and we now, for the first time, have dedicated international expertise there as well. From a manufacturing standpoint, we're evolving from our historical export routes where we manufactured product in developed western markets and shifted around the world to local manufacturing, especially in Asia where our business is now big enough to justify bringing co-packers online to deliver better costs and faster supply to customers.

Finally, we are investing for the first time in global marketing campaigns like ARM & HAMMER's More Power to You campaign where we leverage proven insights, while localizing the talent and messaging to make sure we're relevant in the markets in which they are launched. Individually, none of these might seem all that impactful to you, however, cumulatively, I assure you they represent a significant investment in resources and capability building that we're confident will keep international growing long into the future.

Last but not least, we remain committed to doing all of the above, while continuing to use our increasing scale, pricing power in key markets and our personal care weighted mix to keep increasing operating margin by 50 basis points per year. We did even better than that in 2020 where we grew 120 basis points and we remain committed to further continuous improvements here.

So in closing, we remain very excited about International and remain committed to our 6% organic growth target, which is also consistent with our outlook for 2021, and as a reminder, this is on top of almost 9% organic growth we experienced in 2020. We've got a long runway on U.S. power brands going global, a number of acquisitions with very low household penetration versus their lead markets, and enormous opportunity in emerging markets where we've just started opening new offices to help us reach these consumers and a number of strategic investments in resources and capabilities like e-commerce and pricing to help make sure our great international team is working as efficiently and effectively as possible to drive profitable growth long into the future.

Thank you for your time and interest in our international story. Now, back to you, Matt.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Thanks, Barry. I'm going to run you through the animal productivity story right now. You heard me speak earlier about what our Evergreen model is, it's 3% annual organic growth, 2% from the U.S., 6% from International and 5% from the Specialty Products. Our specialty products business is a $300 million business, two-thirds is animal productivity and one-third is specialty chemicals.

If you look at the animal productivity piece, you'll see it's split between animal dairy and animal non-dairy. Historically, dairy has been the biggest part of the business. Three types of products we produce our prebiotics, probiotics and nutritional supplements. Now why is that important? It's because the consumer is moving away from wanting to consume food that is produced with antibiotics.

The dairy business has been cyclical. As I said before, it's been the biggest part of the business. If you look at this chart in 2011, 2014, 2017, those were up years. So typically it's a three-year cycle. The expectation was that 2020 was going to be a big up year. It didn't happen, why? Because of the pandemic. So we expect a strong year from the dairy business in '21. Now, if you look at dairy versus non-dairy, we were monolithic back in 2015. Less than 1% of our sales were from non-dairy. In '21, we expect it to cross 30%.

So just wrapping up here. We have a trusted brand, all of those products I described are ARM & HAMMER products, and we're aligned with the consumer trend to move away from antibiotics to prebiotics and probiotics. We've moved from dairy to other species, cattle, swine and poultry and we have a lot of runway internationally.

Now I'm going to talk about how we run the company. It's pretty simple, we have five operating principles. One, leverage brands, two, friend of the environment, three, leverage people, four, leverage assets and finally, leverage acquisitions. Number one, brands consumers love. As we say -- we opened the program today, pointing out that we have 13 brands that we call our power brands. These are brands that consumers love.

Number two, we are a friend of the environment and that friend of the environment started back in the 19th century. If you run your eyes across this page, you can see back in 1888, we -- the company introduced pro-environmental wall charts and trading cards that we put in our packages as a promotion for the environment. In the '70s, we were the first corporate sponsor of Earth Day. If you went 20 years later to 1990, we were still the only corporate sponsor of Earth Day. More recently, in 2016, 50% of our global electricity demand was supplied by renewable energy sources. In 2018, we crossed 100%.

Over the last five years, we've been planting trees in the Mississippi River Valley. Now why is that important? It's because trees take CO2 out of the atmosphere and this is consistent with our goal of being carbon-neutral by 2025. Here are our three environmental goals. First, water. Reduce water and our wastewater by 25% by 2022. For solid waste, to increase our solid waste recycling rate to 75% by the end of 2021. And finally, air. We want to achieve 100% carbon-neutral status for all of our global operations by 2025 and of all those three, that's the one I'm most excited about.

Now we've been getting a lot of recognition externally as you can see on this slide. From JUST Capital, FTSE4Good, the EPA, etc. Not because we've been applying for these things and running our business so we can take a bow. No, we've been recognized because we've been doing the right thing.

Number three, we leverage people. We have the highest sales per employee of any company in the CPG space. This is an underappreciated statistic. Look at these numbers. We're almost $1 million of sales per employee, you'd normally expect that off a start-up. We have a very simple compensation structure. We focus on four things, revenue, gross margin, cash from operations and EPS. And gross margin is actually an unusual element of our incentive compensation package. The reason why we have gross margin in there is because it creates financial literacy. Gross margin expansion is very important to our operating model and when people think, hey, gross margin is part of my incentive comp, they ask the question, what's gross margin, and how can I get it?

Number four, we consider ourselves asset-light. Capex as a percentage of sales has been about 2% for as long as I've been with the company. The other thing that may not be appreciated is that about 25% of our global sales are manufactured by third parties. So I just ran through the first four operating principles. Let's go into number five, leveraging acquisitions. If you did the first four principles well, you're going to have good shareholder returns. If you can add to that leveraging acquisitions, you get great shareholder returns, which we do. We have a long history of growth through acquisitions as I mentioned earlier. And the reason why we do so well with acquisitions is because we're disciplined.

So here's the five criteria. Number one, we only buy brands that are number 1 or number 2 in their categories. Number two, we only buy brands that can grow 3% or better and have gross margins that are equal to or better than our corporate gross margins. Number three, need to be asset-light. Number four, we're always looking for cost synergies. So we're trying to leverage a Church & Dwight supply chain footprint. And finally, these brands need to have a sustainable competitive advantage for many years to come.

Our most recent acquisition is Zicam, that's a number 1 Zinc supplement in the United States in the adult cold shortening category. As many of you have been watching, the cough and cold categories have been -- are expected to be down in '21. Why? Because people are wearing masks and using hand sanitizers, etc. We expect that as well but we think this is going to be a wonderful acquisition for us for years to come.

Just to wrap up the M&A section, we have 13 brands today, we're shooting for 20 tomorrow. Why is this important? Well, acquisitions have been a great driver of total shareholder return historically and will be again in the future.

And next up is Rick to take us through the financials.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay. Thanks, Matt. I'm going to go through four items today. First off is the Evergreen model like we always do, number two is 2020 results, both for the quarter and the full year, the third thing will be the 2021 outlook and then, the fourth will be the capital allocation discussion.

So first off is the Evergreen model and our shareholders know that we've been talking about this for a very long time, 3% top line, 8% bottom line. And we have a detailed model to go through as well. So 3% for net sales growth, 25 basis points for gross margin expansion, flat marketing as a percentage of sales, which is typically higher dollars as we grow the top line. And then we leverage SG&A by 25 basis point. That gets us to 50 basis points of operating margin expansion and about 8% EPS growth.

Now moving to 2020. So we ended the year in a fantastic way. Q4 2020 was 10.8% organic sales growth, 11% domestic organic sales growth, 14.9% for international and minus 1.2% for SPD. Gross margin was down 280 basis points, but in line with what our expectations were. Remember our outlook was down 250 basis points for the quarter. Now that 280 included a 40 basis point drag because we recognized some of our supply chain workers as the pandemic spiked the again. And then, marketing change was up 140 basis points in the quarter as we invested behind our brands to enter 2021 with momentum.

SG&A was leveraged by 70 basis points. Despite higher amortization and investments, the top line helps us leverage SG&A in a big way. And then, EPS was $0.53, our outlook was $0.50 to $0.52. So we beat the midpoint of the range by $0.02.

Moving to the full year 2020. Organic was 9.5%, domestic was 10.7%, international 8.6% and SPD was 0.4%. So just really a strong year to have a 10% organic full-year number. Gross margin was 45.2% or down 30 basis points, really driven because of COVID and incremental tariffs, but we'll get into the detail in a minute. Marketing was 12.1% or higher by 30 basis points. That's very significant, it was a huge investment behind our brands. You'll hear in the outlook that we're going to return to pre-pandemic levels for marketing support.

Adjusted SG&A is 14.1% or down 10 basis points, so we did leverage SG&A. And so, EPS was up 15% or $2.83 and then cash was up to $990 million, a $400 million above our $890 million estimate a year ago. And then, finally that translates into 125% free cash flow conversion, we do a great job converting net income into cash flow.

And now, turning to the detail on gross margin. Here's the bridge. So for Q4, we had positive price volume mix, similar to the way we've had it all year long plus 130 basis points. Then, inflation was a drag of 310 basis points, but that included a few items, commodities, distribution with a tight trucking market, labor increases and then investments. COVID costs were 150 basis point drag, which included a 40 basis point drag for the supplemental bonus that we discussed earlier.

Incremental tariffs for Waterpik was a 90 basis point drag for the quarter, and then productivity programs were plus 160, so there's a lot of great work behind our good to great program. Acquisition, that's really Zicam, for the month of December, a positive margin mix, and then Flawless accounting was down 30 basis points. Remember back in 2019, it was a good guy and so, it didn't exist in 2020, so it's a drag year-over-year. And that's how we get to down 280 basis points for the quarter. And then, all that translates into the full year to be down 30 basis points. And so, we feel like we have a great springboard to have margin expansion in 2021 and we'll talk about that in a minute.

Turning to this slide, this is four reasons why we can expand gross margin in the future and we believe these things. First off is our good to great program and I just got finished telling you how well we did in 2020. Number two is supply chain optimization, that's really our footprint, our network. Number three is acquisition synergies, you heard us a few months ago talking about Zicam, and we signed up for $5 million of synergies for Zicam, as an example. And then, fourth is new products, we want to launch accretive new products. So those four reasons help us have confidence in expanding margin over the long term.

Okay, moving to the 2021 outlook. So at a high level, our outlook consists of reported sales growth of 4.5%, that's really the organic number of 3% plus the impact of Zicam. Organic is 3%, operating profit margin expansion of 100 basis points, which is almost double our 50 basis point expansion for our Evergreen model. And then, adjusted EPS growth of 6% to 8%.

So here's a detailed outlook for 2021. First, the 4.5% reported and then we get into the 3% organic sales growth. And it's very consistent with what you just heard from Matt and Barry and Britta, 2% for domestic, 6% for international and 5% for SPD.

Now, the 3% organic growth, it does have a couple of strategic choices that we've made previously in there. Remember, last year we communicated that we were de-emphasizing OxiClean laundry and we were getting out of the private label vitamin business. Both of those things, this is the second and complete year of those actions and now that would have added a full point of organic growth as an example. So we would have been at 4%, I just want to give you context there.

Gross margin is up 50 basis points. We'll go through that detail in a minute and marketing is down 30 basis as we get back to kind of the average for pre-pandemic levels is around 11.8 and that's what we plan on doing in 2021. SG&A, we leveraged by 20 basis points and then were up 100 basis points for operating margin.

Now you might ask if you're leveraging the operating margin by 100 basis points, why aren't you higher on the EPS growth outlook? It's just 8%, your Evergreen model is 50 basis points and your 8% EPS growth. Well, it's because of tax. Our tax rate in 2020 was 19% and we're going back to the consistent average of around 21%, 22%. In 2019, we had two things that helped us on tax. One was a discrete international planned settlement and then the second one was just a higher number of stock option exercises. And so, those two things aren't going to recur to the same extent.

And so, as a result, we're up 100 basis points on operating margin, just really strong base business plan, up 6% to 8% on EPS, and then up to approximately $1 billion of cash flow generation, cash from operations.

Okay, here's a track record of our organic sales over the last 10 years. Very consistent. We've typically averaged around 4%, this year we're calling 3% for 2021 and as I said before, if you add in some of those strategic decisions we made, we are closer to the 4% on an apples to apples basis.

We focus on gross margin in a big way. Gross margins are great surrogate for -- and driver for EBITDA margin, and then that flows all the way down to cash flow and cash generation, and we believe cash drives value. So plus 50 basis points in 2021. The detail of the 50 basis points of expansion in '21 really leads off with price and volume mix continuing to expand. We have higher volumes, we have improved price mix throughout the year.

Inflation and the COVID costs are drag of around 130 basis points. COVID costs do reduce year-over-year, but there is -- they still exist. And then productivity programs are a tailwind of 100 basis points. Tariffs and acquisition, that's again the Zicam acquisition in the favorable gross margin impact to mix. Those two pretty much offset and we're at plus 50 basis points for the year. So really happy with that type of expansion.

Now, we're talking about the seasonality of gross margin. The first half, second half dynamic. So first half gross margin is down 50 basis points. And why is that? While we're going back to normal promotional levels, remember in 2020 March, April, May, June, promotional levels pulled back in a big way as the pandemic was spiking and couponing as well. We have higher Waterpik tariffs in the first half, right. It's not in the comp year ago, first half. And we have COVID costs compared to a year ago, when they were none, and plus there is higher commodity costs.

In the second half, we have lower COVID costs, we have improved trade promotion, we have tariff remediation, we're doing actions -- we're taking actions to offset that Chinese supply chain that we have for Waterpik and of course we have Zicam gross margin mix favorability.

Moving to marketing, we have a long track record of spending between 11% and 12% on marketing. It just drives the brand's growth over time and drives our Evergreen model. In years past, about -- the average is around 11. 8% and we're saying in 2021, we're going to get back to the pre-pandemic average of around 11.8%.

Moving to SG&A leverage. We have a long track record of leverage in SG&A, this is on a reported basis. In 2021, we're going to be down 20 basis point, is our expectation, but if you look at this on a cash basis on the next slide, you can see how much we're actually leveraging cash SG&A. We're going to be down 60 basis points in 2021.

And then, finally on EPS, we have a long track record of great EPS growth, low double-digit, high single-digit EPS growth for a long period of time. And in 2021, it is no different. 6% to 8% EPS growth of $3 to $3.06 is the outlook. And that's on top of 15% growth in 2020.

Same discussion we just had in gross margin. We have a timing dynamic for EPS growth as well. For many of the same reason, EPS growth is expected to be down 5% in the first half, as we get back to normal promotional levels. We have higher Waterpik tariffs and we have higher COVID costs as well as higher commodity costs. In the second half, we expect to be up around 20% and that's because of a return to historical marketing level, improved promotional efficiency, lower COVID costs, tariff remediation in those actions that we're taking and 2020 investments that aren't going to repeat in the back half of the year.

Okay, moving to free cash flow. This is my favorite slide. We have a long track record of free cash flow conversion, 122% over the time period. We had 125% in 2020. How do we do that? Well, we have great working capital management, we've moved from 52 days down to 16 days is the outlook for 2021. And if you strip out the Chinese supply chains that we have for Waterpik and Flawless, those numbers are actually closer to five days as we approach 0 working capital.

We have a very strong balance sheet, we have a lot of financial capacity. We expect to end the year at 1.3 times debt-to-EBITDA at the end of 2021. And so, we have a lot of dry powder, what do we do? We have the ability to do up to $4.2 billion deal and still maintain our credit rating. So just a lot of excess cash and debt capacity.

Now moving to capital allocation. We're very clear on the top five reasons for capital allocation. Number one, far away is TSR-accretive M&A and we're very picky on what deals we do deal. Number two, we moved this up previously this summer, on capex for organic growth and you're going to hear me talk about capacity additions for laundry, litter and vitamins in a few minutes. So number two is capacity investments for growth. Number three, MPD. Launching an accretive MPD has been a just a stalwart of this company and it helps drive our top line as well. Number four is debt reduction. And as you saw, we're going to end the year at 1.3 times debt-to-EBITDA in 2021, is our expectation.

And then, return cash to shareholders through dividends and buyback. We're not a capital-intensive company. If you looked back at our history, we usually bump around 2% of sales or below. In years past, we've had capacity additions and that's what happened in 2009, we had our York laundry plant and that's when we bumped up to about about 5.5%. In 2011, we bumped up to 2.8% when we had our Victorville laundry plant and so 2021, 2022 are no different. We think we're going to spike up to around 3.5% as we add these capacity investments. And so those capacity investments are around laundry, litter, vitamins, baking soda, technology and our distribution network around the country.

And then, finally, we have a great history of paying the dividends. For over 120 years we've been paying dividends and in 2021, our outlook is a 5.2% dividend increase on top of increases of 5.5%, 4.5% and 14.5% these past few years. In addition, we did a $300 million ASR that started in December and we expect to complete by the end of Q1.

And this ends the formal presentation. And I will turn it over to Q&A for Matt, myself and the rest of the leadership team.

Questions and Answers:

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Okay. Morning, everybody. Thanks for joining us today. We have all the EVPs on the line with us. Many questions were submitted during the rolling of the tape. So Rick is going to read the questions and we'll take them one by one.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay. Thanks, Matt.

Olivia Tong -- Bank of America Merrill Lynch -- Analyst

First question is from Olivia. Is the new OxiClean sanitizer product getting incremental shelf space? What do you think about the opportunity in Flawless and which brands got more shelf space in 2020?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Okay, all right. Hey, that's a great question. We got a lot of confidence in 2021. I'm going to dish that to Paul Wood, who is our EVP of Sales.

Paul Wood -- Executive Vice President, U.S. Sales

Appreciate it. Thanks, Olivia, for the question. Yeah, let me start with Oxi sanitizer, right. I think, as Steve mentioned, the right product, right time, right place and definitely, lends itself to the incrementality question that you're asking. So one of the strongest launches we have on the acceptance front and so, feel very good there.

In terms of the other categories, great question too, because while the headlines are supply and demand, some incredible work by the sales and the commercial team in other categories to strengthen the foundation and some great wins from shelving and placement and brand positioning on condoms, vitamins, Batiste, laundry and laundry additives throughout the year as well. So we've been busy at work to strengthen the foundation and really excited about some of the things that have already hit market and some yet to come. So it's been a strong year on those elements, Olivia.

Rupesh Parikh -- Oppenheimer & Co. Inc -- Analyst

Okay. The next question comes from Rupesh on gummy vitamin. What have you seen lately on the competitive front? And also from the supply chain, have you now fully caught up with demand?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Okay, yeah. Well gummies is a big -- been a big winner for us in 2020. If you look at the -- both the category and our performance in the fourth quarter, the category was up 50% and our brands were up 56%. In fact, if you grow forward into January you see that we're -- our consumption is up still in the 40s. So very strong performance.

We -- both of our brands gained share in Q4, both Vitafusion and L'il Critters. And keep in mind that we've been capacity-constrained during that time. I can imagine if we were not. With respect to capacity, you probably heard us talk on the last call that we have a new third-party that came online in the fourth quarter and our view long term is that we will have both internal capacity expanding as well as treat this third-party as a long-term partner. So it's not an episodic relationship.

Anything to add to that, Rick?

Rick Dierker -- Executive Vice President, Chief Financial Officer

No, that's a good summary. Next question is from Joe Altobello.

Joseph Altobello -- Raymond James Financial -- Analyst

Will Steve Cugine be moving to Naples to hang out with Lou Tursi? Congrats, Steve.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Okay, well, we have Steve on the line this morning. I want to caution Steve that I suspect Lou Tursi is also listening in. So take it away, Steve.

Steven P. Cugine -- Executive Vice President, International and GNPI

Yeah, well, certainly, I would say the head -- I don't have any specific plans to move to Naples in the short term, but I'm sitting here in the northeast and it's pretty cold, so I'm longing for some some warmer weather. So you never know, but no plans as of this moment. And -- but when I do get the Naples, I certainly hang out with Lou for at least a cocktail or dinner. Thanks.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Okay, thank you Joe Altobello for keeping it light today. All right, what's the next question, Rick?

Rick Dierker -- Executive Vice President, Chief Financial Officer

Yeah. Here's a question from Bill Chappell.

Bill Chappell -- Truist Securities -- Analyst

Is there a target for percent of sales from International over the next five years?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Yeah, where our Evergreen target is, the 3% for the company, 2% for the U.S., 6% international and 5% for specialty products. So you're probably asking, Bill, because we've exceeded the 6% year-after-year for many years but we're very confident that 6% or better is intact for years to come.

And anything to add to that, Barry?

Barry A. Bruno -- Executive Vice President, International

No, Matt. I'd just say, we aspire certainly to beat that 6% target, but no, there's not a specific percentage of sale that we are shooting for right now.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Okay.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Yeah, the only thing I'd add to that, Bill, is probably -- hey, 17% of sales is International today and we have a good problem, right. Our domestic business continues to grow very strong and so that percent of sales and plus all the -- a lot of the M&A we've done has been more U.S. focused. So over time, even though we've had great growth internationally, the percentage has stayed relatively stable. Next question is from Andrea.

Andrea Teixeira -- JPMorgan Chase & Co. -- Analyst

It's really about, what's the backdrop for commodities and inflation and transportation for Church & Dwight in the outlook?

Rick Dierker -- Executive Vice President, Chief Financial Officer

So I'll take that one. In general, we expect commodities to be up next year, it's really the first half, second half story. If we look at some of the big drivers even in the quarter, HDPE and polypro were up close to 20%, methylene was up 5% in the quarter. And in the first half of the year, we expect those commodities to be up around 20% to 30% but in the back half, it's pretty flat because we're experiencing that as early as Q3 of 2020. As for the transportation market, we do expect it to be up mid single-digits.

But I'll flip this to Rick Spann to add any other color or commentary.

Rick Spann -- Executive Vice President, Global Operations

Yeah. Thanks, Rick. Yeah, the transportation market is very tight. Spot market rates have increased by more than 30%. In fact, this is the second highest market or the second tightest market that we've seen in the last eight years and of course, that's having an impact on our transportation cost.

And just a bit more color on commodities. Commodities were pretty flat for the first half of last year, but as Rick mentioned, we see headwinds on our major commodities, right now but not only on our major commodities but on some of the smaller purchases of raw and packing materials that we use across the rest of our business. Fortunately, we have a robust productivity program to offset some of these headwinds.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay. Next question is from Steve Powers.

Stephen Powers -- Deutsche Bank -- Analyst

Is there specific data that gives you confidence in vitamin usage as a sustainable trend as opposed to something that is correlated with elevated health awareness due to COVID and more time spent at home?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Okay, it's a good question, Steve. I'll just say a few words and then I'll dish it to Britta. But as you heard in Britta's remarks that the longer a new behavior lasts, the more likely it's going to continue and that is our expectation for next year. We think the wellness trend is certainly in our favor and we don't think that people are going to fall back to their old ways.

Britta, anything to add to that?

Britta Bomhard -- Executive Vice President and Chief Marketing Officer

Yeah, we do have to -- we do have the specific data, so we know that 20% more households bought vitamins and we also know that 57% of people are using it now daily. So we know that those behaviors have changed in the small households. We also know that the households currently are buying more than they used to.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

All right. And of course the trend from pills, the capsules, we expect that's going to continue not just in '21 but in future years.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay. Next question is from Lauren Lieberman, a three part question.

Lauren Lieberman -- Barclays Investment Bank -- Analyst

First one, is on the outlook for inflation. To what degree are hedges helping in 2021 and any contractor logistics?

Rick Dierker -- Executive Vice President, Chief Financial Officer

I'll go ahead and jump in and answer that one. In general, we're about 65% hedged for 2021, so pretty well protected overall for incremental commodity volatility. And then, number two contractual logistics. Remember a part of our freight is picked up by customers and some of it is also on dedicated lanes, so really about a third of it is subject to more extreme volatility and we have to use brokerage and whatnot for that. But -- so we are well protected there as well.

Second question from Lauren is.

Lauren Lieberman -- Barclays Investment Bank -- Analyst

The next two are on Flawless. To what degree are new products expected to drive Flawless' growth this year?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Yeah...

Rick Dierker -- Executive Vice President, Chief Financial Officer

And maybe...

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Good question.

Rick Dierker -- Executive Vice President, Chief Financial Officer

And maybe it's part and parcel, is her second one.

Lauren Lieberman -- Barclays Investment Bank -- Analyst

Flawless is historically a hair removal brand. What are you seeing that gives you confidence in the brand expanding into other areas like skincare or facial cleansers?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Yeah. No, it's a good question. Yeah, we bought the Flawless brand in 2018, it was largely a face and brow product and frankly, a little-known brand. And over the past couple of years, we've been working on not only brand awareness, but also to build out the brand, so we'd have -- we reach far more consumers with other products. And that's the reason why we've introduced this year the mani-pedi product, the body cleanser and also the face cleanser.

So we think -- with respect to 2021, we think Flawless will be up well in excess of 20% from a sales perspective. And the three reasons for that, one would be the new products, which we talked about during the presentation. Also, the influencers that we've also had joined the brand this year. And finally, the at-home grooming trend we think is still an opportunity for us.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay, great. Kevin Grundy is up next. He has a few part question. First is from housekeeping, some questions on investors, mine would be...

Kevin Grundy -- Jefferies and Company -- Analyst

Modestly lower 6% to 8% EPS growth outlook for 21% -- for 2021 versus the comment on the third quarter call that you delivered against 8% Evergreen outlook in 2021. You mentioned the tax rate being higher but that presumably would have been anticipated a few months ago. Please comment on a more conservative outlook.

Rick Dierker -- Executive Vice President, Chief Financial Officer

And I'll let Paul answer that question first.

Paul Wood -- Executive Vice President, U.S. Sales

Yeah, OK. That's a good question, Kevin. So we -- look, we feel really good about '21. We have a lot of confidence with respect to the categories because we think we were really thoughtful about them as well. So the logic with respect to which ones are going to go up and are going to go down -- as you know, as Rick described, just there's -- we -- our expectation is 3% top-line, but the math is more like a 4% top line because we have a 1% drag from the second year effects of exiting private label vitamins and also we're exiting Xtra in Canada.

As far as the EPS goes, yeah, we're coming off a little higher base than we thought we were going to be at when we were in October. So we had a range of $0.50 to $0.52, we came in at $0.53, so we're $0.02 better than our midpoint. So we did leave ourselves some room with a range of 6% to 8%. As you know, we've had a 8% or better for many, many years, so we don't expect to -- for it to end that streak in '21.

As far as the year goes, there is obviously pluses and minuses, it's probably more pluses than minuses when we look at the -- at '21. We have a potential for lower COVID costs, to get some help from currency as well as promotional levels staying down a little bit longer. Anything to add to that, Rick?

Rick Dierker -- Executive Vice President, Chief Financial Officer

Yeah, the only thing I'd add is maybe when you look at the two-year stack just as per on the EPS growth really is, 15% in 2020 and then, a 6% to 8%. So 21% to 23% EPS growth. If you look at that versus the peers, the peers are closer to 7% or 8% on a stack basis. So just feel really good about the strength on top of strength. Okay, the second question that Kevin had was really international-related.

Kevin Grundy -- Jefferies and Company -- Analyst

There's still the areas of biggest areas of opportunity. He imagines that it executed in China, it's certainly one of those in emerging markets. And then, comment on margin improvement, first win and then where you see in investing for larger and faster growth.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Okay. I'm pretty confident that Barry Bruno is very eager to take a swing at that question with respect to prospects for growth in international. So Barry, jump in.

Barry A. Bruno -- Executive Vice President, International

Yeah, happy to give it a shot. So yeah, clearly, emerging markets are the biggest opportunity, right. There is increasing household income. Our brands are new in a lot of these markets, specifically China, North Asia, Southeast Asia, all very exciting to us. We just opened an office in India as well to help us start to get a toehold in that important market and our business in Latin America even amid a lot of economic turmoil is really, really booming. So definitely emerging markets are a disproportionate area of focus.

In terms of margin improvement, we're working on understanding pricing opportunities, better we've got dedicated resources now, looking at pricing around the globe, we are working on improving COGS by local manufacturing as opposed to exporting product and we've got a host of other areas of improvement that will allow us to keep delivering at least at 50 bps annually that we've committed to.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Okay. Hey, thanks, Barry. Next up?

Christopher Carey -- Wells Fargo Securities -- Analyst

Your next question is from Chris from Wells Fargo. Saw your comments around returning promotions in the first half of 2021 back to pre-COVID levels were interesting, they're a bit more intentional than what we've heard from some of your peers. What wiggle room do you have there i.e. do you wait and see how things play out with competitors or do you to lead on returning promotional levels? In longer term, what do you think about commercializing these categories?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Okay, let's -- when we talk about sold on deal, we are essentially talking about the household categories. So if you -- it's laundry and litter. So the trend year-over-year for laundry sold on deal like if you have looked at Q2, Q3 and Q4, sold on deal for the category was down 1700 basis points in Q2 and Q3 and Q4 was down 800 and then 750 basis points. So it's still a muted and frankly low -- pretty low.

In our fourth quarter you may recall, we said we were going to spend behind some new products and that would be Clean & Simple and AbsorbX, but that's largely behind us now as we go into the new year. Q2 year-over-year will absolutely be higher, simply because it was so low in Q1 of 2020. So everybody pulled their promotions. So there will be a year-over-year increase for spot everybody Q2. So it will be up in Q2 because Q2 2020 was the low watermark.

Are you going to answer that, Rick?

Rick Dierker -- Executive Vice President, Chief Financial Officer

And I think the commentary is true. We have in Q3, Q4 2020, it was largely behind new products and will pass that and then going to the next year, we're not saying it's going to be maybe at pre-pandemic levels, that normalcy, but just it's going to be above the very, very depressed level of what it was in 2020.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Yeah. One thing I didn't point out was that, I talked about laundry, but if you look at litter, so litter the trend was if you went Q2, Q3, Q4, litter was down 800 basis points sold on deal in Q2 and Q3, Q4 down to 70. So in the category, we saw a little bit more heated up in Q4, but still down almost 300 basis points year-over-year.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay. Next question is from Steve Powers.

Stephen Powers -- Deutsche Bank -- Analyst

A lot of investment spending in 2020 clearly. Can you drill down and talk about where that investment spending has been prioritized, whether in terms of specific brands or capabilities or channel development? And whether that prioritization changes along 2021?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Yeah. We wouldn't get into specific brands but we did and we have talked about where we spent the money. We've spent things on automation of non-plant processes as well as in the factories, new product test and learns, we have some projects in IT and R&D, analytics projects, some consumer research we wanted to get after. So there's pretty broad investment in the second half yeah.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Yeah. And some of that was really transitory, right. We always had investments with just doing so well in 2020 that we fast forwarded and made incremental investment. So we think that are some of the things that matter.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

But a fair amount of those investments were largely non-recurring.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Bill Chappell added some more.

Bill Chappell -- Truist Securities -- Analyst

A quick question on trade promotion. Why do you expect trade promotion to normalize in '21? It appears that some of your major competitors are comfortable with lower levels remaining and did you see meaningful pick up in competitive activity in Q4?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

I think we already handled that question with respect to the trend for Q2, Q3 and Q4. I would say we expect it to continue to be muted, just in Q2, we do think it's going to be year-over-year, you're going to see a pop but we're certainly comfortable with lower promotional levels in '21.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay, and then Steve Powers.

Stephen Powers -- Deutsche Bank -- Analyst

The new disinfecting products you're rolling out on Oxi seem different. Given that the need, demand for disinfectant solutions right now seems global, do you see any potential to use those innovations as a way to push the Oxi brand further outside the U.S. market or is it too early to have that discussion?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Yeah, I'll just say a couple of words. Steve and Barry have had some success moving the Oxi brand outside of the U.S. over the past couple of years and we've had great success in a couple of markets.

I will let Barry take a swing at where we see some opportunity.

Barry A. Bruno -- Executive Vice President, International

Yeah, we've had great success with the brand, outside of the U.S., Japan, in particular, has been a real star for us and we're continuing to invest there. We do have other market launches plans for next year but I'm not going to get into them specifically, so we don't tip off any competition. But yeah, there are other markets we are launching too next year. The brand is strong and definitely relevant internationally.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Thanks, Barry.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay, next one is from Camille.

Unidentified Participant

Any changes in the pressure from retailers as they regroup after a year of demand spikes and think through managing the incremental costs of expanding into the omnichannel?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Yeah, I think it's -- that is a perennial question that we get is -- because every year, the concern is that retailers are asking for more and more from the suppliers. We often say that because our power brands are number 1 or 2 in their categories, we're in much better position to have those conversations with the retailers. And if we're -- and we were a 3, 4 or 5 or 6 brand, but -- Paul, if you have anything to add to that, just go ahead and jump in.

Paul Wood -- Executive Vice President, U.S. Sales

Yeah, I think the only thing I'd add on to that would be the retailers are under tremendous pressures, right. A lot of them were going down an e-commerce journey, some further along on that than others, but they're all having to play catch-up and whether they're using third parties like Instacart and Shipt, it certainly pulled their labor in other places and it's more expensive for them.

At the same time, reaching the consumer through digital means and loyalty card programs, while it's effective as added costs as well. So there is no question the retailers are under tremendous profitable pressures as they try and get back to normal as well. So those are all challenges, perennial question and perennial answer, probably just heightened a little bit more because the e-commerce and the shifts that we're going through, as we speak.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay, next question is from Jon Andersen.

Jon Andersen -- William Blair & Company -- Analyst

With all the new consumer trial your brands have experienced in 2020, what are you doing to try and retain those customers as we move toward a post-pandemic environment?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Is that brand-specific, that question?

Jon Andersen -- William Blair & Company -- Analyst

Yeah. So it's slightly bent on the household penetration we had in all the new consumers that we gained in the different brands, how do we retain those consumers over the long term?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Okay. You heard Britta talk about the household penetration that we had in ARM & HAMMER, but I think the household penetration has been even broader than that. I think we have a very robust marketing program both online, which is now approaching two-thirds of our spend.

But I'll let Britta take a swing about why we're confident we're going to hang on to those new consumers.

Britta Bomhard -- Executive Vice President and Chief Marketing Officer

Yeah. So I would site two very distinct facts. The first one is you have trial and repeat and with our brand, our repeat rates are very strong, which today indicate that consumers are happy with the product performance. So that gives us confidence in some areas like the teeth. We have by far the best repeat and loyalty rates. So that's number one just based on product performances. The second one is, we also have a lot of programs where we invite people to join our communities or our email list or other areas of staying connected and we are actually using that to reach out again and make sure that they feel that brand loves continuing in 2021.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Hey, thanks, Britta. That was a good add.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay, our next question is from Steve Powers.

Stephen Powers -- Deutsche Bank -- Analyst

Do you have data on the longevity of Waterpik use following dental recommendations? The correlation with dental office openings makes good sense, but I'm wondering about the stickiness of device use and distance in time from that initial visit and recommendation increase?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Yeah, I don't know if we have that -- the statistics that you're asking for Steve.

Britta, I don't -- could you weigh in? Do we know if we have those kind of stats?

Britta Bomhard -- Executive Vice President and Chief Marketing Officer

So, we don't have necessarily the statistics as such, but what we do have and I think that's a very, very interesting data is when people buy a Waterpik, they can register with us. So let's assume these are the more serious users who are registering and we're seeing those rates increase more than four-fold in 2021. We also know that for some of our products where we have repeat purchases, be it Sonic-Fusion where we have the dental brushes or for some of the others to tip, we can clearly see that those repeat rates are increasing.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay, thanks, Britta. Next question from Lauren Lieberman.

Lauren Lieberman -- Barclays Investment Bank -- Analyst

Market shares are up in only about 50% of your categories, what do you see as the ideal will be?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Yeah, that's a good question. Historically, what we shoot for is two-thirds. So we think it's a great day if -- and now we have Zicam, but -- and we have 12 power brands. We'd be shooting for eight out of 12 to be -- to gain share -- or holder gain share in their categories. In some of our categories, some of the brands that lost share, somewhat related to our -- we're out of stocks during the year, so that did hurt a few of our brands. But all in, we feel real good about where our brands stand with consumers going into '21.

Britta, anything you want to add to that?

Britta Bomhard -- Executive Vice President and Chief Marketing Officer

So I think the only one I can add is -- and we do brand equity measurements, so we know that we strengthen brand equities for our significant -- for our -- some of our -- but for the ones we measure. So very key indication of consumer being vetted to our brands and loving our brands.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Yeah. And you saw we spent a fair amount of marketing in the second half to help drive that brand equity.

Britta Bomhard -- Executive Vice President and Chief Marketing Officer

I know you were going to throw that back at us, so that was very productive spend as you talked about. The use of -- the households we won and lots of the programs we ran were exactly tapping into the current situation and emotions. So some of you might have seen, we did have Grant A Wish as people in COVID times are looking for brands to step up and do more than just sell products. We had the Hungerthon on Vitafusion, so we had on each of our brands significant emotional connections with consumers.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Good. Good add. Rick?

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay. A couple of questions from Bill Chappell.

Bill Chappell -- Truist Securities -- Analyst

What is the cadence of capex spend this year? Have you already started on the expansion project?

Rick Dierker -- Executive Vice President, Chief Financial Officer

I'll take that one. Cadence is very consistent with what many years of spend, it's typically back-end loaded, Bill. And have you started on expansion projects? There's a whole list of capacity projects we mentioned just laundry, litter, vitamin, distribution, warehousing and technology stuff. So it's a mixed bag, some have already started, some are under way and some are to be starting.

Second question from Bill.

Bill Chappell -- Truist Securities -- Analyst

Can you talk more about tariff remediation for the second half? Can you quantify the impact?

Rick Dierker -- Executive Vice President, Chief Financial Officer

Well, we've been very vocal about the impact of tariffs on Waterpik and with enough lead time, we always believe that we can do things that impact the supply chain and that's what we did. And over the last six to 12 months and in 2021 in the back half, we're going to start to see a benefit of a few million dollars. And the full year run-rate of that is even better. So we're just really happy with our team and the progress we've made there.

Next question is Joe Altobello.

Joseph Altobello -- Raymond James Financial -- Analyst

Which categories are you most concerned about in 2021 with respect to pantry loading or consumption decline?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Well, I'll let Britta comment on the categories because we did bucket all four of them. Though as far as the ones we might be most concerned with -- Joe, we -- the way we bucketed them, we did say which ones we've planned on staying elevated, which ones we think are going to fall back -- the ones we said we're going to pull back were categories like baking soda, for example. Bake -- the declines were going to be baking soda, toothache, carpet and pregnancy kits. So pretty confident they're going to fall back. The question is, will it -- how far will they fall back. And then, as far as the ones that are going to recover, would be condoms and dry shampoo with -- that's more of a back of view as more and more people get vaccinated and consumer mobility expands.

But anything to add to that, Britta?

Britta Bomhard -- Executive Vice President and Chief Marketing Officer

No, I think you captured it. I think the ones we are concerned is where we -- where there's COVID uncertainty, right? Which has to do with whether the vaccines and whether that will bring people back. But for the majority of our categories, let's remember, they are continuous household consumption categories. So people are washing their clothes, cleaning their houses, having their cats, and as I mentioned, having more cats. So for the big majority know that we actually have stronger performance.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay. Next question is from Kevin Grundy.

Kevin Grundy -- Jefferies and Company -- Analyst

Kind of a build on that, on market share. Specifically, only seven of 13 power brands gained share in 2020 and it was a bit unique in 2020. Please discuss confidence to improve market share momentum in 2021.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Yeah. Well, normally we kind of pick on the ones that didn't grow. So as you say, it's seven out of 13. One of the five that didn't grow is because we're using Nielsen data. And so, Waterpik would be one you would say, well, it lost some share in 2020. Yeah, that's a business we expect to grow mid-to-high single digits in 2021. Xtra lost some share in '20. Now, why is that? Well, it's because both Xtra, Sun and Purex, all the deep value brands lost share in '20.

And what -- and the benefit obviously went to the mid-tier and the higher premium brands. If you look at ARM & HAMMER liquid laundry detergent in the fourth quarter, we had an all-time high 14% market share. So there are reasons why some of those brands declined or in -- with respect to Nielsen data lost share in 2020, but we do expect -- we're targeting -- maybe two-thirds of our 13 power brands will gain share in '21.

Anything to add to that, Britta?

Britta Bomhard -- Executive Vice President and Chief Marketing Officer

No, I think you said it really well, and we've seen a couple of our brands, particularly in the last quarter or last month actually regaining market share, which we see as a positive momentum you've mentioned.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Okay. You're up.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay. Rupesh had a couple of questions.

Rupesh Parikh -- Oppenheimer & Co. Inc -- Analyst

One was on online penetration. Do you expect to see further increases in online penetration this year or could it level off or step back? And how are you thinking about the stickiness of 2020 gains?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Yeah, hey, it's a good question. Online for us, you know the history, Rupesh. So in 2015, it was 1%, 2019 was 8% and 2020 was 13%. In fact, the fourth quarter, we were at 14%. Our expectation is that for 2021, that 15% of our global sales will be online. So we'll go from 13% this current year to 15% next year. So we do think that's going to remain sticky as you say. What -- if you think about some of the categories that did expand online, it'd like vitamins, Waterpik, litter, those were the big growers. But we do think it's going to stick and we think it's going to continue to expand. We think a lot of people that discovered ordering online, like we said, with vitamins, is a new habit. And so, we don't see a fall back in 2021.

Rick Dierker -- Executive Vice President, Chief Financial Officer

And then, his second question's more about a modeling.

Rupesh Parikh -- Oppenheimer & Co. Inc -- Analyst

Just remind us about what you have baked in for FX and remind us how to think about Zicam seasonality.

Rick Dierker -- Executive Vice President, Chief Financial Officer

I'll take the FX question. If rates stay where they're at, that will be -- as Matt mentioned before, maybe one of the tailwinds that we have in 2021.

And then, Matt you want to take Zicam?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Yes. As far as Zicam goes, 2021 is really dependent upon the end of the year Flu season. Now historically, the Zicam business has 50% of its net sales in the fourth quarter. So that's all ahead of us, Rupesh.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay. Next question is from Mark.

Mark Astrachan -- Stifel Financial Corp. -- Analyst

Please tell us -- please talk about why specialty products still makes sense as part of Church & Dwight as it has underperformed longer-term expectations in these recent years? How much time does management spend on that segment? And under what circumstances would you consider it non-core?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Okay. Well, specialty products has historically been a cyclical business. You saw in our presentation that 2014 was an up year, 2017 was an up year, and the next up here would have been 2020 and if not for the pandemic. So we think that '21 is going to be a good year for our specialty products.

We have been trying to flatten that business out over time by moving into other species. It is an asset-light business. The products are branded ARM & HAMMER and if you think about the business, one-third of the business is for sodium bicarbonate, which is labeled ARM & HAMMER, which is our legacy business, and frankly, is the soul of the company. The -- as far as the metrics of that business throws off, it throws off plenty of cash with -- in relation to the assets that we own.

So we do think this is a business we're going to own long term. It is -- as you point out, it is a small part of the company, it's only 6% of our revenues, but it doesn't require a disproportionate amount of our -- of management's time.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay, next question is from Bill.

Bill Chappell -- Truist Securities -- Analyst

He just wants to say, best of luck to Steve, enjoyed working with you. And a modeling question, what is the underlying share count for '21 implied in your outlook?

Rick Dierker -- Executive Vice President, Chief Financial Officer

And that is $252 million, Bill.

Next question would be from Jon Andersen.

Jon Andersen -- William Blair & Company -- Analyst

On International, in 2020 the Global Markets Group growth far outpaced the sub-market, do you expect that trend to continue? And what are the key drivers of the outsized GMG growth?

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Yeah. Well, one thing to keep in mind is that if you look it up, the percentage of our sales -- of Church & Dwight sales, that's international in comparison to our peers, it's very low. When I joined the company, the international was 17% of our global sales. It's still 17% of our global sales today in spite of the phenomenal growth internationally.

I'll have Barry give you couple of stats of contrasting Church & Dwight with our peers and why we think we can have such great runway going forward.

Barry A. Bruno -- Executive Vice President, International

Yeah, absolutely. Thanks, Matt. So a couple of thoughts. Most of our peers have over 50% of their sales generated from international, while Church & Dwight has just 17%, so you can see the runway there. To drill down another level deeper, in terms of emerging markets, we only get about 7% of our sales there, while the average CPG company gets about 27% of their sales from emerging markets. So definitely a runway there.

Why do we have confidence in it continuing? We're opening offices closest to where the consumers are, right? So now we have offices in Singapore, Shanghai, in Mumbai, in Panama. That's a lot more resources on the ground that are going to keep GMG growing at an accelerated rate in the future.

On the subs, so I want to compliment them as well. So you saw, they've been growing at 5%, 6%, pretty significant for western developed markets. So they're doing pretty well as well. The combination of the two gets us to that Evergreen target and hopefully even above that.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Hey, thanks, Barry.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay, next -- and then, we have two questions left. Next question's from Kevin Grundy on unit dose.

Kevin Grundy -- Jefferies and Company -- Analyst

Years ago, we always talked about getting your fair share in the category, have our share gain impossible ever to come by for ARM & HAMMER, and P&G still is the leader with 80% share? Please provide some updated thoughts on your outlook for unit dose.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Yeah, it's a good question. It is a relevant question too, Kevin. We did lose share in the -- we lost 40 basis points a share in the second half. You may heard us say on previous calls that we did have some internal issues with respect to supply. Rick has described the fact that we've been building capacity and bringing it in-house. So we expect to turn that around but long term, we need to -- we -- our ambition is to get our fair share and that means we would have over a double-digit percentage share of the unit dose and today it's less than 4%.

Rick Dierker -- Executive Vice President, Chief Financial Officer

Okay. And then, the final question's from Jon Andersen on e-commerce.

Jon Andersen -- William Blair & Company -- Analyst

Now that it's 14% of sales, what's your market share position in profit margin online versus offline? And then, are you seeing more growth through buy online, pick up curbside or pure play e-commerce like Amazon?

Rick Dierker -- Executive Vice President, Chief Financial Officer

I'll take the first one. Our market shares in general are at or above our bricks-and-mortar and there's no great measuring stick to use to do that, but our growth is at or above category averages online. Our profit margin online, we've been very clear about that. In general, it's at parity to bricks-and-mortar but part of that is because we have personal care still growing faster than our household business in general online. And so, that's a margin tailwind. As our household business grows faster, we will need to get into more solutions for delivery, etc.

Jon Andersen -- William Blair & Company -- Analyst

So the second question maybe is a good one for Paul. Are you seeing more growth through buy online and pick up curbside or the pure plays like Amazon?

Paul Wood -- Executive Vice President, U.S. Sales

Yeah, it's a great question. And the frustration I think we all have is a very limited data is what's being shared out maybe from the retailers and some of these third parties as they're just trying to catch up. So I think we're all triangulating on that, but yeah by and large, we're seeing a ton of buy online, pick up in store but that's also blending with same-day delivery expectations. So that last mile piece, it's almost dividing that world into send in the mail or what's considered, oh, two to five days. So seeing a heavy propensity toward that buy online, pick up today, but also like I said, that today delivery, tomorrow expectation.

Certainly watching it. The pure plays are certainly blending into brick-and-mortar and the brick-and-mortar don't have to repeat it, we all know what's going on there. But to say that it's an active conversation and very fluid with a lot of different ways of working and expectations by the customer are different, how your product shows up online you could imagine and all the analytics that go along with it, moving very quickly. So I'm excited about the opportunities ahead regardless whether it's the traditional brick or the pure plays. I think there's a lot of good momentum for us, particularly Church & Dwight.

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Okay, that was the last question. Just to wrap up, everybody knows there's a lot of uncertainty in 2021. I don't have to enumerate those for you today. So consequently, we went -- we were pretty painstaking with respect to our press release and the information that we shared today category by category. So we've taken a hard look at it, we feel real good about '21, both on top line and bottom line. And as I said before, we expect to continue our streak of 8%, but we do leave ourselves a little bit of room where we said 6% to 8%.

And we're looking forward to seeing you -- well, we won't see you, but we'll talk to some of you again at the late February CAGNY and if not, we'll talk to everybody again in April. So thanks for joining today.

Duration: 98 minutes

Call participants:

Matthew T. Farrell -- Chairman, President, Chief Executive Officer

Britta Bomhard -- Executive Vice President and Chief Marketing Officer

Steven P. Cugine -- Executive Vice President, International and GNPI

Barry A. Bruno -- Executive Vice President, International

Rick Dierker -- Executive Vice President, Chief Financial Officer

Paul Wood -- Executive Vice President, U.S. Sales

Rick Spann -- Executive Vice President, Global Operations

Olivia Tong -- Bank of America Merrill Lynch -- Analyst

Rupesh Parikh -- Oppenheimer & Co. Inc -- Analyst

Joseph Altobello -- Raymond James Financial -- Analyst

Bill Chappell -- Truist Securities -- Analyst

Andrea Teixeira -- JPMorgan Chase & Co. -- Analyst

Stephen Powers -- Deutsche Bank -- Analyst

Lauren Lieberman -- Barclays Investment Bank -- Analyst

Kevin Grundy -- Jefferies and Company -- Analyst

Christopher Carey -- Wells Fargo Securities -- Analyst

Unidentified Participant

Jon Andersen -- William Blair & Company -- Analyst

Mark Astrachan -- Stifel Financial Corp. -- Analyst

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