Linda Bolton-Weiser: Okay. So I mean, again, like I guess I can do the math, but if it was down 7% in last quarter, the first quarter, it was down less now in the second quarter or is that the case?
Steve Brass: No. I think it distinguish. We spoke about market share, so POS data is different. In the first quarter, we did speak to POS data. And so our POS data, which — so these numbers here reflect sales and overall volumes right to the market. Our POS data represents a substantial chunk of our overall business. It’s hard to track overall because we’re active in so many different channels, right? And so our volume in terms of the latest read in terms of market share POS data in the U.S. Our category sales, I believe were up like 17% and volumes are down just into double digits. So that’s the latest status in the U.S.
Linda Bolton-Weiser: Okay. And again, sorry, that year-to-date or in the quarter?
Steve Brass: Well, that is actually — those numbers I gave you on POS are actually the last three months, last three months.
Linda Bolton-Weiser: Okay. So I think the previous analyst asked this too, but I’m still having a hard time understanding why if the Americas is recovering volume quicker and your sales were actually strong. Why is the gross margin most disappointing in that region where it’s recovering the quickest. That’s what I’m having a hard time understanding.
Steve Brass: That’s a fair question. So I’ll start with that, and maybe Sara can add to it. I think we’re still cycling through because of the high inventory levels we have in the Americas, and that was done purposely for us to build up and be able to service demand. So we’ve now got to a situation in Americas where we’re at 99% fill rates on our core products and 98% on time in full delivery. So we’re servicing fully — almost fully all of our needs. But those inventories will purchase six to nine months ago, and so they purchased at those cost prices at that time. So it’s taking longer for inventories to push through. And also, I think there is a certain element looking forward of the Americas driving volume, particularly the U.S. And so driving volume, getting back with promotions in store also may have some margin implications.
Linda Bolton-Weiser: Okay. And then so just longer term, obviously, you always historically have had promos come and go each period, but historically, when you’ve taken pricing like this, have you ever given back or reversed on the list prices or do you the always set the pricing
Steve Brass: No, we’ve…
Linda Bolton-Weiser: Yeah, go ahead.
Steve Brass: No, we’ve never. So I’ve been here 32 years. We’ve never gone down with pricing once we’ve gone up. What we tend to do is, if the situation changes with commodities over time, then we may promote to the end user and give the end user extra value with something like an extra ounce as promotional or something. So we have done that historically yet.
Linda Bolton-Weiser: Okay. Thank you. And then I guess the pricing benefit in gross margin in the quarter was very close to what we had projected, but the impact of the higher petroleum-based input and tin can cost was more negative. So I’m just wondering, like, I know it’s hard for us to know what you’re pulling through these things. But OYO has wrapped, so why is it that that was still such a negative? And do you think there will be neutral to gross margin in third quarter those inputs or annual fourth quarter? Thanks.
Sara Hyzer: Hi, Linda. It’s Sara. So it is challenging to compare some of the decreases in the spot prices that we’re seeing to exactly what we’re seeing from what we’re paying for our commodity pricing currently. We are seeing some benefits, but they’re not as significant as what we’re seeing in the spot pricing because of the offset to labor and energy costs are kind of offsetting the benefits that we could be seeing in the future on the spot pricing. But for the quarter, part of that is just again, working through the levels of the inventory. So what we had anticipated to work through this quarter, while volumes are improving, they were not improving as fast as we had hoped. And so that’s partly why the margin didn’t pick up as much as we had hoped during the quarter.
Linda Bolton-Weiser: Yeah. Okay. And then sorry to tilt (ph) recent volume issues that you had said previously that for the year, you had baked in kind of volume flat to down slightly. So what would be baked in right now to the guidance that you’ve given now for volume for the year?
Steve Brass: Yeah. So it’s hard to call, there’s certainly different variables. So probably at the start of the year, we did say that we thought that volumes were going to be kind of flat to slightly negative. You have to factor out the kind of Russian loss as a one-off kind of loss right, which was 4% of our overall volumes, but we have a half year of that. I think we kind of see it as a little bit higher than kind of low-single digits. It’s probably going to be more towards the kind of low single €“ double-digits to high-single digits. But there’s a lot of variables out there, right? So you do have a lot of markets around the world where footfall is a little lighter than we would like, footfall in retail stores has fallen off by maybe 10% to 15%. So that’s a variable that’s out there and where that goes in the future. So yes, I think we’re looking at negative high-single digits to low double-digits.
Linda Bolton-Weiser: Okay. Thank you. And then finally, one last thing. Just on the interest expense. I mean it was kind of higher than we had modeled in the quarter. Do you have a guidance for the year that we can put in our models for that?
Sara Hyzer: Sure. Yeah. So we are — I’m happy to — let me just give me two seconds, and I can pull that up. I would guide to a little bit north of $5 million, Linda.
Linda Bolton-Weiser: Okay. Thank you very much. Thanks.
Steve Brass: Thank you.
Operator: Your next question comes from the line of Rosemarie Morbelli with Gabelli Funds. Please proceed with your question.
Rosemarie Morbelli: Thank you. Good afternoon, everyone.
Steve Brass: Hi, Rosemarie.
Rosemarie Morbelli: Steve, I was wondering, when you are talking about March being a record top line quarter, if I understood probably, is that still mostly priced or are you beginning to see some volume in the March quarter — I mean, in March month?
Steve Brass: Yeah. So we’re seeing — well, again, without results being fully final, so this is directional. We’re seeing a big improvement in volumes. And that’s particularly been noticeable in Europe. And so Europe went through the same kind of disruption at the U.S. They’re just a quarter behind the Americas. So the recovery in Europe is really starting to happen now as we emerge from kind of six months or so post price increases. We have much greater promotional activity in market. And so yes, in particular, in Europe, you’re seeing a strong volume recovery.
Rosemarie Morbelli: Okay. Thanks. And then when we look at inflation, you touched on the higher cost of labor and the higher cost of cans even though some of your raw materials are coming down. Can you put a number on the inflation — in the inflation increase that you are seeing? And do you have enough price to cover it or you need to raise prices some more?
Sara Hyzer: So if we’re — obviously, the can is made up of a few different components, but if we were to break that down a little bit, the can, so the physical can itself I think what we’re looking at this year versus last year is going to be relatively flat globally. We have some regions that are slightly up, in some regions that are slightly down. So while the tin plate spot prices coming down, the cost to convert that into our physical can is higher when you compare it to prior year. So there are some offsets that are happening there. As far as the specialty chemicals, I mean, what we’re buying at today versus what we were buying at around this time last year. Those are going to be around the high-single digits, maybe low double-digits depending on the region.
So we are seeing some benefit of what we’re actually buying there. But again, then just last week, those prices started to go back up. So those can be pretty volatile month-to-month depending on what’s happening out there. So those are just that maybe helps give some ranges. It is very different depending on kind of the makeup of the different components of the can. We’re seeing differences between those buckets.
