Jeremy Smeltser: Yes. I think it’s a little bit of both, Chris. I think, obviously, we’re coming off of two tough seasons, particularly this last year, where I think our retailer customers behave differently than we expected. So I do think our connectivity and understanding of their strategies is much better than it was a year ago. I think their strategies, frankly, have stabilized. I think their strategy has changed a lot as the year progressed last year. So it’s a bit of knowledge from them. They understand that we have limited manufacturing for a business that’s so seasonal. So they have to be very communicative to us to make sure that they have the product, when the consumer arrives. So it has to be a really tight partnership.
But I also think it does make sense to start the year conservatively given the past couple of years. That said, we’re really encouraged by Q4, where a stronger POS than both we and the retailers expected, because of a late one season continued to season longer and because of those lower inventory levels that they have now, we immediately saw replenishment orders and really kind of outperformed where we thought we would be in Q4. So I think that’s a good sign that our strategy is right as we head into 2024.
Chris Carey: It’s just given two years of organic sales growth decline, one would think inventories are much cleaner by this point, and specifically a POS was better, so is this excess inventories going into next year or retailers managing a tighter inventory load than what they’ve typically done?
Jeremy Smeltser: Yes. Honestly — no, I think that’s a possible outcome. I think it could be much better if we have a strong season. But again, I do think it makes sense to start the year, thinking about it prudently and recognizing that business has changed a bit over the past couple of years, like it changed a bit during the couple of years of the pandemic and being cautious on the forecast to David’s earlier point, making sure that we’re putting out numbers that we know we can we can achieve and we can satisfy our shareholders. I think that is the right thing to do as we start fiscal ’24.
Chris Carey: Okay. That makes sense. Just one last one, then I’ll hop back in. The outlook for sales this year, can you just maybe give some context on your expectations for pricing, relative volume, I would imagine volume down, but given you don’t disclose that line item? Maybe any additional context there would be helpful.
Jeremy Smeltser: Yes. I think as you look at pricing for ‘24 kind of across the businesses and regions, I actually think that we’re going to be relatively flat. I think there’s going to be some areas where the competitive situation will require us to give some price. And I think there’s going to be some strategic areas in revenue growth management, where we can take a little bit of price. But net-net, I think it’s going to be a neutral year. So we’re really looking predominantly at volume for the low single-digit sales decline that we’re calling. And again, predominantly coming from the HPC business.
Chris Carey: Okay, thank you both.
Jeremy Smeltser: Thank you.
Operator: Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Peter Grom with UBS. Your line is open. Please go ahead.
Peter Grom: Thanks, operator, and good morning, everyone. So maybe just to start, David, and Jeremy, how would you characterize the degree of conservatism intended in the outlook? And then Jeremy, just a lot of commentary to suggest that despite confidence in the full-year, it’s going to be a tough first-half, retail ordering patterns in agent duty, tough start in GPC, weaker one half and HPC, can you maybe put a finer point in terms of how we should think about the phasing from an EBITDA perspective? And I guess just building on that, what drives the confidence that the second-half will show improvement following what seems to be a pretty tough first-half year? Thanks.
Jeremy Smeltser: Yes. I mean, I think first, we start with where do we see our markets in Q4. The quarter we just came off of. What are we hearing from consumers? What are we hearing from our retail customers. And I think essentially, we have baked that environment into what we think for ’24, probably with an additional level of conservatism based on an expectation that we have. As David said earlier, that economic conditions globally, but particularly in the U.S. will likely get a little bit worse than they’ve been in the last couple of quarters in fiscal ’24. So we take all those things into account. That’s really how we built our forecast. I think our comments around the first-half are very specific to situational issues, not necessarily macro issues in our specific categories and businesses that we just want to point out that will impact how the first half plays versus the second half.
But as you look to this year, what we don’t have is some step function change quarter-to-quarter in expectations for consumer demand and/or margins. We expect it to be more steady than what we’ve experienced the last couple of years. And we don’t have the significant roller coaster ride of inflation going up and deflation going down to worry about. So I think it’s a year of stability, as David talked about earlier, a year to start investing back into the brands in a material way sequentially from what we’ve done in the last two years, which has been quite low. I think it will be a great year for us to deliver EBITDA growth in all three businesses to do that, to track the return on those investments well and to springboard hopefully into a better economic situation in ’25.
