Please refer to today's earnings release, which identifies various factors that could affect forward-looking statements and provides information that reconciles non-GAAP financial measures to the most directly comparable GAAP measures. And with our planned acquisition of GOJO Industries, we're taking a decisive step to expand our leadership in health and hygiene and unlock long-term growth opportunities. I mean, obviously, you, you did, reaffirm your guidance, how we should be thinking of, the competitive environment now and the promotional environment. And then as we head into the back half of the year, we continue to expect category growth to be in the 0%-1% range.
We have excellent innovation plans in the back half, strong demand plans, and we're beginning to see the fruits of that. But I would say the consumer was largely steady as we had expected and in line with category growth. I'll return to the point I made at the beginning on Q2. We think it's well within that band, and again, Q1 and Q2 were about the same category growth rate, about flat.
And just for context, if you remember, we went live with the new ERP in July, and that was for most of our operation, including order to cash, demand fulfillment, and logistics. So that's really just quarterly noise and has no implication on the full year. And then from an investment perspective, we have double our typical launch size investment plan behind marketing, behind demand creation, et cetera. We're excited about continuing to offer consumers additional value in the trash segment, and particularly, again, focused on ensuring that we are innovating, and giving people better experiences.
| Metric | Period | Current guidance |
|---|---|---|
| Organic sales growth | FY2026 | reaffirmed (guidance reaffirmed) (unchanged) |
| Category growth assumption | FY2026 back half | 0%-1% (unchanged) |
| Price mix | FY2026 | about -1% (headwind) (unchanged) |
| Glad JV termination benefit | FY2026 back half | about 50 bps of gross margin benefit |
| Advertising as percent of sales | FY2026 | about 11% (unchanged) |
| Digital investment EPS adjustment | Q3 FY2026 | about $0.08 (last quarter with adjustment) |
| Gross margin phasing | FY2026 back half | Q3 about flat, solid expansion in Q4 |
| Metric | YoY | Note |
|---|---|---|
| Category growth | about flat | Q1 flat excluding beauty and Q2 down a tenth of a point; consumer under stress in the 0-1% range, with a January pickup partly weather-driven. |
| Total company price mix | about flat | Net revenue management initiatives partially offset value-seeking behavior and channel shifting; full-year expected about -1%. |
| Household pricing | negative | Volume-driven consumption and share loss plus a shift to larger sizes in bags and wraps and channel shifting created price-mix headwind. |
| Household EBIT margin | about 5.3% | Stepped-up promotions behind trash and litter and higher manufacturing and logistics costs. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| ERP transition | Through the hard part after Q1 | Final manufacturing phase completed in January and went smoothly; remaining year is about stabilizing and then optimizing | Completing |
| Back-half innovation | Launches planned across all major brands | Shipping has begun but most shelf resets occur late Q3 or early Q4; Clorox allergen platform, Glad LeakGuard, full litter relaunch, Hidden Valley with new Avocado Ranch | Ramping |
| GOJO/Purell acquisition | — | Planned acquisition announced to expand health and hygiene leadership; leaning into a long-standing area of strength | New strategic addition |
| Promotional environment | Back to roughly pre-COVID levels with pockets of intensity | Elevated versus last year but in line with historical rates; trash and litter more promotional, with Scoop Away Costco promotion creating data noise | Stable with pockets |
| Litter relaunch | Innovation planned for the back half | Full multi-year relaunch beginning in the back half with new packaging, graphics, claims, items and price pack architecture; early results encouraging | Launching |