The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Joseph Altobello - Raymond James - Analyst
: <_ALACRA_META_ABSTRACT>With that in mind, I did want to start with your US consumer business. It gapped up during COVID as consumers entered the
category, though it's been rather choppy of late. My first question is, what's been driving the recent volatility from year to year
for what historically has been a fairly steady business?
Question: Joseph Altobello - Raymond James - Analyst
: Just going back to your comment earlier about the future growth. I think at your Investor Day in mid-'24, you guys laid out a
3% CAGR on the top line. You mentioned low single-digit growth.
Question: Joseph Altobello - Raymond James - Analyst
: Indeed. Can you kind of give us the building blocks of that 3% growth? How much is volume? How much is price? And are
you assuming any acquisitions and/or market share gains within that number --
Question: Joseph Altobello - Raymond James - Analyst
: I want to go back to market share because I think there's this perception that during challenging economic times, consumers
tend to trade down, right? You guys are the premium branded player in the category. How have your market shares been
trending? And have you seen any material trade down to private label, for example?
Question: Joseph Altobello - Raymond James - Analyst
: So going back to e-comm for a second. First, could you tell us how big that business is for you today? And how it breaks down
between, let's say, Amazon versus retailer.com?
Question: Joseph Altobello - Raymond James - Analyst
: Is same day the kind of secret sauce because I've always looked at your product as very bulky, right? No one's going to buy
20 bags of mulch putting your garage on a Wednesday when you're going to put it down on a Saturday, for example, right?
So does same-day kind of solve that issue, I guess?
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Question: Joseph Altobello - Raymond James - Analyst
: Got it. So let's talk about gross margin a little bit. This is, in my view, very much a gross margin story for the stock. If you look
at your gross margins, you were mid-30s several years ago. You got down to, I think, below 24% at the bottom, right?
And now the goal is to get back to the mid-30s. And you're kind of halfway there, right? So I guess two-part question here for
Question: Joseph Altobello - Raymond James - Analyst
: Well, great. I think we're just about out of time. So Nate, Mark, thank you guys. Thank you, everybody, for joining us, and enjoy
the rest of the conference.
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