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Operator
Good day, ladies and gentlemen, and welcome to the Clorox Company first quarter fiscal year 2021 earnings release conference call. At this time, all participants are in a listen-only mode. At the conclusion of her prepared remarks, we will conduct a question and answer session. If you would like to ask a question, you may press star 1 on your touch-tone pad at any time. If anyone should require assistance during the conference, please press the star 0 on your touch-tone pad at any time. As a reminder, this call is being recorded. And I'd like to introduce your host for today's conference call, Ms. Lisa Burhan, Vice President of Investor Relations for the Clorox Company. Ms. Burhan, you may begin your conference.
Lisa Burhan
Thank you, Sharon. Welcome, everyone, and thank you for joining us. We certainly hope you and your family continue to remain safe and healthy in what remains a challenging environment. As usual, we have a few reminders before we go into results. We're broadcasting this call over the Internet, and a replay of the call will be available for seven days at our website, thecloroxcompany.com. Today's discussion contains forward-looking statements, including statements related to the expected or potential impact of COVID-19. These statements are based on management's current expectations but may differ from actual results or outcomes. In addition, we may refer to certain non-GAAP financial measures. Please refer to the forward-looking statement section, which identifies various factors that could affect such forward-looking statements, and the non-GAAP financial information section, which includes the table that reconciles non-GAAP financial measures to the most directly comparable GAAP measures. both of which are located at the end of today's earnings release, which has also been posted on our website and filed with the SEC.
Sharon
So what's going on with this thing? Oh, this is my brand new next gen... Wait, how did you get in here? Oh, well, the door was open. I think the bigger question is, what's going on with this thing? This is my new vacuum. It's almost top of the line. It has artificial intelligence. Not to mention, I got a very good deal. And is that all it does, the back and forth thing? So far. This morning, it looked like it was going to go left, but then it didn't. You know, artificial intelligence is supposed to be all about self-learning. But the only thing this thing is learning is how to ruin a carpet.
Linda
What's the opposite of artificial intelligence?
Sharon
Oh, I think we're looking at it. Yeah. Here's a thought. When it comes to customer experience... Almost is not good enough. You've got to have the real thing.
spk07
CX1 is the only true next-gen CX cloud platform with native AI that actually gets smarter with every interaction. Only CX1 has real next-gen AI for a real next-gen experience. Does it have an on-off switch?
Sharon
Well, that would have been extra. Would have been smart. Yeah, probably would have been. Mm-hmm.
spk09
We'll be right back.
Lisa Burhan
Linda will offer her perspective and will close with Q&A. For the total company, Q1 sales increased 27%, reflecting about a point of benefit from the acquisition of majority interest in our joint venture in the Kingdom of Saudi Arabia, and about a point of headwinds from unfavorable foreign exchange impact. This quarter's 27% organic sales growth is supported by double-digit sales growth in eight of our 10 businesses. I'll now go through our results by segment. In our health and wellness segment, Q1 sales were up 28%, reflecting double-digit growth in all three businesses. Our cleaning business had another quarter of double-digit growth behind continuous strong demands for our disinfecting products. While we continue to make progress expanding supply, we're still not at a point where we can fully meet ongoing elevated demand. Despite those constraints, our Clorox brand continues to see increases in both household penetration and repeat rates. We've been investing behind this momentum to convert new users to lawyer consumers, and we've been seeing very strong return on our investment. On the innovation front, our bleach complexion effort is now complete. the Clorox Fabric Sanitizer Platform and Clorox Disinfecting Wet Mopping Cloths both continue to show strong growth. On a related note, our wet mopping cloths along with our Clorox and Clorox Scentiva branded disinfecting wipes and Pine Sol Multi-Surface Cleaner all recently received approval from the EPA for kill claims against the virus that causes COVID-19 on hard, non-porous surfaces. Our professional products business also had double-digit sales growth behind strong shipments across all of our disinfecting product lines. A key driver of growth this quarter was the Clorox Total 360 system, which uses an electrostatic technology to deliver disinfectants to large, hard-to-reach areas. To support sales and continued momentum in this business, We're bringing online new production capacity this month for the disinfectants used in these devices. In addition, we've created a dedicated out-of-home team that focuses on growth opportunities in new channels and spaces to further build on strategic alliances we've already established with Uber Technologies, United Airlines, AMC Theatres, and Cleveland Clinic. Lastly, within this segment, Our vitamins, minerals, and supplements business grew sales by double digits this quarter. This strong growth was driven by shipments to replenish retail inventories following the recent supply disruption and by shipments in support of our Renew Live brand relaunch. Our priorities this year are to continue to improve service levels in order to capture the strong consumption trend, execute the Renew Live brand relaunch with excellence, and deliver consumer-meaningful innovation. Turning to the household segment, Q1 sales were up 39% with growth in all three businesses. Grilling sales more than doubled this quarter due mainly to strong consumption behind grilling occasions and increased household penetration. Sales growth this quarter was also driven partly by customer replenishment of inventory. We've been very pleased to see the strong turnaround of this business, reflected in our continued share growth, strong collaboration with retailers, and successful entry into the pellet category, with our Kingsford pellets continuing to build distribution and share. With recent increases in grilling occasions in new households, including millennials, we're optimistic about the prospects of this business and will invest behind this momentum to drive long-term, profitable category growth. GLAD sales were up by double digits in Q1, behind ongoing strong demands for our products as consumers continue to spend more time at home. We're building on this momentum with a consistent stream of innovation, including our new GLAD ForceFlex with Clorox trash bags, which launch in September. This product eliminates food and bacterial odor throughout the trash bag and has already earned more than 1,000 five-star ratings online from consumers. Our Glad Forceflex trash bags with unique fragrances and colors, which launch in Q3, also continue to perform well and are among top-selling new items at major retailers. Cat litter sales grew in Q1, driven mainly by strong online shipments and innovation, supported by higher advertising investments. We're encouraged by our return to share growth in Fresh Step behind the continued strong performance of Fresh Step's Clean Paws innovation platform, and the strong start of fresh step-with-gain original scented litter with the power of Febreze. In our lifestyle segment, T1 sales increased 17% with double-digit growth in two of three businesses. Rooted sales were up by double digits for the third consecutive quarter. The growth is driven mainly by continued strong consumption especially in larger size systems and long-last systems and filters. Sales growth was also driven partly by customer replenishment of inventory, an effort our team has been very focused on. Household penetration for Brita continues to grow, which gives us more reason to invest further. We'll be introducing a new and improved long-last plus filter that allows water to flow faster and captures more contaminants, along with the new pitcher.
Linda
How can you start your own event space business today without using any of your own money? You can create your own event space in less than 60 days just by securing financing. I'm going to break down the entire process on how to do it. The awesome thing about this, it doesn't matter if you're a newbie. It doesn't matter if you're an intermediate. It doesn't matter if you're an expert. This process can work for anybody. But look, I'm not even going to try to waste your time here. If you aren't interested in leaving your nine to five and building a steady stream of passive income, then skip this ad and don't go forward. Go back to doing whatever you're doing. This is not for you. What's going on guys? My name is Brian Waldron. I'm a seven-time event space owner. I've helped hundreds of people leave their job and start their own passive income generating event space. Just like this one. But before teaching other people how to do it, I was actually doing it myself. See, I opened up this whole venue using $50,000 of other people's money. Now it makes us $50,000 every single month. So if you are sick and tired, if you are tired of being broke and broken, if you are tired of grinding it out every single day and just not having enough, I need you to hit this link right here. Grab my ebook. It's going to show you everything on how we do to get other people's money to turn into things like this. Look, I knew nothing about event spaces before I got started. And truthfully, most of my students didn't either. With this e-book, you will have the knowledge and you will have the experience to go and do it yourself and get the same kind of results. There is a proven way you can get hundreds of thousands of dollars of funding with no type of experience. Just take one of my students right here who got the e-book and said that the method is bulletproof. She was able to generate 10K without even opening the doors. you got to get the ebook. There's no way around it. Let's go. If you are serious about taking advantage of opportunities, learning how to create more income and more impact in your life, you got to click that link. Let's get it. Let's go. What are you waiting for? Click. Let's learn more and let's grow together.
Brian Waldron
Managing people, managing budgets, managing organizations, and learning how to do that effectively. That's the reason I'm getting my degree. I want to be better. I think that is the one key thing that WGU has and a lot of other programs don't have.
Lisa Burhan
The food business also saw double-digit sales growth. behind ongoing strong consumption of our Hidden Valley Ranch products, which continues to benefit from more at-home eating occasions. This is another business where we're seeing household penetration growth. We will continue to invest in innovation and are encouraged to see a strong start to our new Hidden Valley Ranch secret sauce dressing. Finally, Burt's Bees sales decreased this quarter. As the business continued to be impacted by lower store traffic, especially in parts of the store where Burt's Bees products are typically found. We've since accelerated our online strategy and strengthened our presence in the fast-growing cough and cold category with the launch of a new line of rescue balm with turmeric. While we expect the category-wide challenges to persist in the short term, we have strong confidence in the Burt's Bees brand and its long-term growth prospects, supported by a robust innovation platform. Now turning to international. Q1 sales grew 18%, driven by ongoing elevated demand for our products, disinfecting products, and essential household products across nearly every geography. Organic sales grew 17%, reflecting about 9 points of benefit from the Saudi JV acquisition and about 8 points of unfavorable foreign currency headwinds. Our international business has very strong momentum, and we're looking to build on that through investments that accelerate our Ignite strategy. Increasing the stake in our Saudi JV is just an example of that. Another example is the international expansion of our Clorox disinfecting wipes, which are now being supported by a dedicated supply chain separate from that in the U.S. This will allow us to better meet ongoing elevated demand in our existing international markets where we currently offer wipes, and to launch this Consumer Preferred Forum into new geographies. Now, I'll turn it over to Kevin, who will discuss Q1 performance as well as our updated outlook for FY21.
Kevin
Thank you, Lisa, and thank you everyone for joining us today. I sincerely hope you and your families are well. I'm pleased with our very strong start to the fiscal year, reflecting broad-based strength across our portfolio with double-digit volume sales, and profit growth in each of our reporting segments. Additionally, each reporting segment delivered gross margin expansion, contributing to our eighth consecutive quarter of gross margin expansion for the company. As you saw in our press release, we raised our fiscal year 21 outlook, given the strength of our Q1 results and our expectations for higher top-line growth over the balance of the fiscal year. Turning to our first quarter results, first quarter sales were up 27%, driven by 22 points of organic volume growth and five points of favorable price mix. Sales results also included one point of growth from acquiring majority control of our Saudi joint venture, offset by one point of FX headwinds. On an organic basis, sales grew 27%. Gross margin for the quarter increased 400 basis points to 48%, compared to 44% in the year-ago quarter. First quarter gross margin included the benefit of strong volume growth, as well as 170 basis points of cost savings and 150 basis points of favorable mix. These factors were partially offset by 300 basis points of higher manufacturing and logistics costs, which were similar to last quarter, included temporary COVID-19 spending. Selling and administrative expenses as a percentage of sales came in at 12% compared to 14% in the year-ago quarter. primarily from increased operating leverage. Advertising and sales promotion investment levels as a percentage of sales came in at about 9%, equal to the year-ago quarter, with spending for our U.S. retail business coming in at 11% of sales. Importantly, this represented about a 30% increase in advertising support this quarter compared to the year-ago period, reflecting stronger investments to support our ambition to accelerate long-term profitable growth. Our first quarter effective tax rate was 21%, compared to 22% in the year-ago quarter, primarily driven by the impact of our increased ownership of our Saudi joint venture. Net of all these factors, we delivered diluted net earnings per share of $3.22 versus $1.59 in the year-ago quarter, an increase of 103%. Excluding the contribution from our Saudi joint venture acquisition, Q1 dilute EPS grew 66%. As you also saw in our press release, Q1 net cash provided by operations was $383 million versus $271 million in the year-ago quarter, an increase of 41%. Our strong cash flow was due to profitable sales growth partially offset by higher employee incentive compensation payments made in the first quarter, which were related to our fiscal year 20 performance. Turning to our fiscal year outlook, we now anticipate fiscal year sales to grow between 5% to 9%, reflecting our strong Q1 results as well as our raised expectations for the balance of the fiscal year, including double-digit growth in Q2. And, as we noted last quarter, we continue to anticipate deceleration in the back half of fiscal year 21 as we lap double-digit growth in the same period in fiscal year 20, when we saw the initial spike in COVID-19. Importantly, we continue to assume our back half sales results will be significantly stronger relative to pre-pandemic sales levels. We also continue to anticipate about one point of contribution from our Saudi joint venture, offset by one point of foreign exchange headwinds. On an organic sales basis, our outlook assumes 5% to 9% growth. We expect fiscal year gross margin to be about flat, reflecting the benefit of strong cost savings and higher sales, all set by rising commodity and transportation costs, as well as temporary costs related to COVID-19. For perspective, we expect gross margin expansion in the front half, followed by a contraction over the balance of the fiscal year, as we lap gross margin expansion of 250 basis points delivered in the back half of fiscal year 20, driven by strong operating leverage from robust shipment growth during the initial phase of the pandemic. We continue to expect fiscal year selling and administrative expenses to be about 14% of sales as we continue to invest aggressively in long-term growth initiatives. Additionally, we continue to anticipate fiscal year advertising spending to be about 11% of sales, spending closer to 10% in the front half of the year and 12% in the back half in support of our robust innovation program. We now expect our fiscal year tax rate to be between 21% to 22%. None of these factors We now expect fiscal year 21 diluted EPS to increase between 5 to 8%, or $7.70 to $7.95, reflecting our assumption for stronger top line performance partially offset by a rising cost environment. As we shared last quarter, our fiscal year diluted EPS outlook continues to include a contribution of 45 to 53 cents from our increased stake in our Saudi Arabia joint venture. primarily driven by a one-time non-cash gain. Excluding the impact of the Saudi acquisition, our fiscal year diluted EPS reflects strong investments behind the robust momentum we're seeing broadly in our portfolio. We're engaging new consumers, supporting back-up innovation plans, and expanding our portfolio into new channels and markets, all in support of our ambition to accelerate long-term profitable growth. In closing, I'm pleased with our very strong start to fiscal year 21. Buying room bust top and bottom line performance across our reporting segments. This provides a strong foundation for our continued momentum, which we plan to drive through aggressive investments in our Ignite strategy in support of creating long-term shareholder value. And with that, I'll turn it over to Linda.
Lisa
Thanks, Kevin. Hello, everyone, and thank you for being with us today. I hope you are well and in good spirits as we continue to navigate this pandemic. It's great to be joining you on my first call as CEO, especially after the tremendous first quarter we delivered. Our results show what Clorox does best. We serve people who count on our brands, especially during a time when they need to feel safe and when their home is the center of their world. This reinforces my first message. Our outstanding results are a reflection of our team's dedication to serving consumers and communities. I'm incredibly proud to see the broad-based strength in our portfolio. with double-digit sales and profit growth in all reporting segments. In the last eight months, all eyes have been on Clorox disinfecting products, and our brands delivered once again this quarter, with double-digit sales growth in our cleaning and professional products businesses, reflecting continued higher usage of products in homes, businesses, and healthcare settings. And now, we're also shining a brighter light on the terrific performance delivered by other parts of our portfolio, with double-digit sales growth in eight of 10 businesses, demonstrating the important role our brands play in addressing people's everyday needs. It's particularly gratifying to see great results from our grilling and glad businesses, as the team has been relentless in driving progress on our business plans, including meaningful innovation.
Kevin
After saving with customized car insurance from Liberty Mutual, I customize everything, like Marco's backpack.
Lisa
Based on double-digit top-line increases and significant margin expansion in our first quarter, We delivered very strong earnings growth for our shareholders, and I'm happy we were able to raise our fiscal year outlook. These results would not be possible without the passion and commitment of our Clorox teammates around the world. I'm thankful and proud of how they live by our values and take to heart our role in supporting consumers and communities. While I feel good about our financial performance for the quarter, there's one thing that continues to keep me up at night, our ongoing focus to meet unprecedented demand for much of our portfolio. We're certainly encouraged by the progress we're making in a number of businesses, including having Clorox bleach mostly back on store shelves, but there's more work to be done. I can assure you that our teams are leaving no stone unturned across all businesses experiencing elevated demand. We're continuing to focus on products that can be made faster and investing significantly in third-party supply sources and in efforts to expedite our products to retailers. Our consumers, retail partners, and communities are counting on us. and I want people to know that maximizing supply continues to be top priority. Next, the Clorox team and I will play 100% offense behind our strong portfolio of leading brands consumers love in support of our ambition to accelerate long-term profitable growth. I feel privileged to be CEO of the special company, and I have my sights set on extending our momentum longer term. In this uncertain environment, people are turning to brands they trust, and we're proud to have trusted brands in our categories. We're seeing this play out in strong household penetration, not just in our disinfecting products, but in many parts of our portfolio. For perspective, the percentage of our total portfolio with stable or growing household penetration has more than doubled year over year. And as I look beyond the pandemic and try to answer the question of whether or not we can sustain our strong results, I'm encouraged by the trends we're seeing, particularly consumer behaviors formed during the last seven months. They're good indicators our brands will continue to play a meaningful role in people's daily lives. For example, people are prioritizing health and wellness, drinking more water and taking vitamins and supplements. Focusing on safety and hygiene, cleaning and disinfecting in and out of their homes. Staying home more, including cooking, grilling, spending time with family and adopting a pet. Spending more time online with about 90% of people saying they've shopped online since the pandemic. There are strong signs these behaviors will stick over the long term, as people have been building these habits for three times longer than it normally takes for routines to form. And, while early, we're encouraged by the strong repeat rates we're seeing across our portfolio, among core and new consumers. This is the time for 100% offense. And that means investing significantly behind our global portfolio, including through advertising and market-leading innovation. increasing capital spending to expand production capacity in the near and long term, and partnering with retailers to enhance shopping experiences and grow our categories. With the strength of our global portfolio, the sustained consumer behaviors we're seeing, and our significant investments to drive growth, Clorox is in a great position to keep winning with consumers. And finally, the defining opportunity for Clorox is simple, to serve even more people around the world with a strategy that helps us make the most of who we are and where we have strategic advantage. Our IGNITE strategy puts people at the center of everything we do. And fundamentally, we will address consumer needs and follow them in the most meaningful ways we can. Here's what I would highlight. Clorox is a health and wellness company at heart. With the strength of our brands and capabilities in disinfecting, we're in a great position to extend our role in public health. We'll continue to lean into the strategic alliances we've established with leading brands to keep their customers safe. And we'll certainly pursue more of these types of relationships with other organizations to increase our support for people outside of their homes. I'm also excited about expanding Clorox disinfecting wipes in international, supported by a dedicated supply chain that will allow us to scale this business in our existing markets and enter new geographies. More than ever, people are online and we believe digital behavior is here to stay. Horrocks has leaned into e-commerce and digital marketing early so that people can engage with our brands in more personal and relevant ways. As people navigate a tough economy with pressures from unemployment and less discretionary spending, they'll continue to turn to brands they trust. And we'll continue to earn their trust and loyalty by focusing on superior value. And what's also important to me is that we continue to be committed to growing the right way, guided by our values and with ESG embedded into our business. It's how we'll help our people, our communities, and our planet thrive now and in the future. Operator, you may now open up the line for questions.
Operator
Ladies and gentlemen, if you have a question, please press star 1 on your touchtone telephone. First question comes from Andrea Texeria with J.P. Morgan.
Andrea Texeria
Hi, thank you, and congrats, everybody, for the results. Linda, I was just following up from your comments and also Kevin on kind of the momentum of the portfolio and obviously you raised your guide for organic, but it does look like your EPS could have some room here. I was just trying to see if you can help us like gauge the level of investment or perhaps some of the mixed effects that we should be seeing. so that you kept your EPS relatively under control given the gain that you had. So just to kind of parse out what part of it is reinvestment in promo or just a mixed effect. Thank you.
Kevin
Hi, Andrea. This is Kevin. I can talk about our EPS as soon as you think about the balance of the year. So as you mentioned, we've raised our expectations for the year 5% to 8% off a very strong start to the year. If you think about the impact of the balance of the year, As I'm sure you've done the math, we were projecting we'll be down in the back half of the year on our EPS year over year. That's primarily driven by the impact of the prior year. If you recall, we grew EPS about 30% in the back half of fiscal year 20. So from the initial impact of COVID-19, the pantry loading, very strong results in the back half of the year. We have to lap that. And in addition to lapping that, as we've spoken the last couple of calls, We are leaning in and investing behind the additional growth opportunities that we see in front of us. And you may have heard my prepared remarks. We think that advertising investment will be back half loaded. So we'd expect to be spending about 12% of sales in the back half. One, supporting a very robust innovation program. We have teed up for the back half of the year, as well as pursuing a number of new growth initiatives, both our partnerships and some international opportunities we're spending behind. And maybe just the last comment I'd make, Andrea, and I think you know this about us, we are certainly not looking to maximize one quarter, but making sure we're taking the right investments that generate long-term value. And so we think this is a good opportunity for us to do that, and we'll certainly do it in the back half of the year.
Andrea Texeria
That's fair. And if I can just ask about professional, where do you think this business can become as you're progressing with all these investments and new partnerships?
Lisa
Yes, you know, professional has been a strong part of our portfolio for a number of years with high single-digit increases up to this point, and we continue to see a long runway for the business, both in the businesses that are established well today in the healthcare and industrial customer setting, but also we're setting our sights on expanding the reach this business can have as consumers start to leave their home, and we can create environments partnering with businesses to keep them safe. So that's what we're focused on right now is investing in the people to support that future growth, investing in the innovation to support that future growth, and of course investing in the brand so that people continue to turn to the most trusted cleaning disinfecting brand with Clorox.
Operator
Thank you both. Next question comes from Wendy Nicholson with Citi.
Wendy Nicholson
Hi. My first question is just sort of a follow-up to that. Totally get the difficult comparisons year over year in the March and June quarters, 100%. But I also heard you call out higher commodities and maybe freight. And I just wanted to ask what your thoughts were on pricing, whether you plan to take price increases to offset some of those commodity increases or whether you feel like the market is tentative and shaky enough where it's better to potentially hold off on pricing?
Lisa
Yeah, Wendy, thanks for the question. You know, we're committed to not taking pricing during the pandemic. It's a do the right thing, and we want to make sure consumers have our products at the right value. And so what we're focused on right now is a continued lean into our aggressive cost savings program that we've had for a number of years. to ensure that we have the fuel to manage the investments that we have and, of course, to manage any bumpiness we expect in commodities. But we do expect cost increases through the back half, as you said, and we're monitoring that environment closely. But again, we're committed to ensuring that consumers have our brand during a recessionary time at the right value, not taking pricing during a pandemic, and leveraging our cost savings program to manage through short terms up and down.
Wendy Nicholson
Got it. And that actually leads into my second question, which is kind of thinking sort of strategically, but also very much with an eye towards, you know, the dollars that you're investing in capacity. I mean, clearly there is a surge right now. And the fact that you're signing so many agreements with the airlines or whatever, I mean, clearly there's just this huge demand for disinfecting products and wipes in particular. But there will be a day when that passes. So I'm kind of curious just as you think about capital spending, you know, are you hurrying to build, you know, capital to support demand that is, I think, going to be huge for some time to come but is eventually going to fade? How do you think about that conceptually so that you don't end up with a lot of capital that ends up, you know, not being needed two years or three years down the road?
Lisa
I think it would be helpful to step back and just talk a little bit about what we're seeing in the macro environment and why we have strong beliefs that we're going to see a lot of these behaviors continue well into the future. We're seeing consumers in the U.S. and around the world cleaning much more frequently, cleaning new surfaces, and of course cleaning both in and outside of the home. And that is true for business customers as well, where they're having to welcome people back to their businesses with safe environments. From our research with consumers, they're telling us that they expect many of these behaviors to stick, regardless of whether or not there's a vaccine or how long COVID goes on, because it's a way to reassure their health and wellness and for them to feel safe. So we're hearing from consumers that this is here to stay, and we've seen evidence of that in past pandemics, as well as just bad cold and flu seasons where people have adopted new behaviors. The other thing I would tell you, in addition to capacity supporting just that change in behavior, We also see significant growth opportunities that are brand new to our business. Expanding clocks, disinfecting wipes, and international. You know, if you step back, we're in about 100 countries around the world with very little presence in disinfecting wipes. That's a big opportunity for us. Complete white space that as we build capacity, we can lean into that even further. And the other thing that I would talk about is in the industrial space, there's new technologies that we have. And we think those cleaning behaviors will need to change on a more permanent basis to reassure people that it's safe to enter those businesses. And so that's the other thing I would just put in perspective. We can shift supply to the opportunities that are most poignant at the moment as we move forward. And then, of course, Wendy, as you always know, we're really good at balancing and spending capital in a disciplined way. And we can make adjustments to our network, whether that be through in-housing or working with third-party manufacturers as we move forward. And we've been very balanced in how we've approached this so that we can do just that.
Wendy Nicholson
Great. Thanks. Sounds terrific.
Operator
Next question comes from Kevin Grundy with Jefferies.
Kevin Grundy
Great. Thanks. Good afternoon, everyone. And congrats on a really strong result. Just kind of building on Wendy's question a little bit, I want to kind of dig into the organic sales growth guidance. So not expecting it's a wide range, but understandably so, up 5% to 9% core sales coming up from what was previously flat to up low single digits in August. So can you dimension for us a bit? What's changed since early August? Is this, you know, retailers carrying higher inventory levels now in some of these higher demand categories? An extremely strong quarter that was not anticipated in early August with Kingsford as an example. Maybe just dimension for us because the magnitude of the upward revision is noteworthy. Maybe just kind of dimensionalize for us a bit what's driving the more bullish outlook. Then I have a follow-up for Cameron on cash flow.
Kevin
Hey, Kevin. This is Kevin. I can take your first question as well as it relates to sales. And, you know, to your point, we've taken up our expectations for the balance of the year pretty materially. I think there's a number of things we're seeing that's giving us even more confidence for this year. The first is we continue to see growing household penetration. So we are now three-quarters into the pandemic, and in Q1, it continued to grow. Additionally, we're seeing increased repeat purchase rates with both new and existing consumers. And so growing household penetration, accelerating repurchase rates, both giving us more confidence. And as you know, we've been exploring a number of additional growth opportunities, both our partnerships as well as expanding our disinfecting portfolio outside the U.S. And we're seeing more and more opportunity in both those spaces that will start to contribute in the back half of the year. And then maybe the last time I'd mention is while we knew we'd have a very strong year as it relates to our disinfecting portfolio, we're seeing very strong results outside of disinfecting. I mean, you clearly saw our results in our household segment. Again, we're seeing users, more users coming into those categories. They're increasing their frequency of usage, and we think that's going to continue through the balance of the fiscal year. So I'd say those are the key drivers that led to us taking up the outlook for the full year.
Kevin Grundy
Got it. All right. Thanks. That's helpful. I have a number of questions. I'll just do just one more if I may. Just with respect to balance sheet and cash flow. So the cash balance is higher than you normally carry and the business typically needs from a working capital perspective. Understanding is a lot that the business is considering now with respect to additional capacity and so forth. But between the higher than the normal cash balances, the business is throwing off a significant amount. of cash from operations. Talk a little bit about, if you would, just in terms of intentions with respect to CapEx, and is there any intention to return to share buybacks as well, something that the company's kind of gotten away from a little bit in recent quarters, but now as we sort of move through the pandemic and there's greater visibility, it could be something that's potentially on the table. So thanks for all that, and I'll pass it on.
Kevin
Sure. Happy to, Kevin, talk about cash. And as you mentioned, Kevin, we're seeing a pretty significant acceleration in the cash we're generating. Last year, our cash provided operations was up about 56%. In Q1, it was up about 40%. We're sitting on just a little under $900 million of cash on the balance sheet, which, to your point, is more than we typically hold. That really gives us quite a bit of financial flexibility. So for Linda and I, job one will be to continue to look for opportunities to invest in our base business. We know that's where we can continue to create very strong returns for our shareholders, so we'll do that, including investing more in capacity to the extent we think that's required. Additionally, we'll continue to look for targeted M&A. We still have an interest in pursuing strategic acquisitions. The good news is I don't feel like we have to do it to be successful. We've got plenty of cash to pursue acquisitions to the extent we find a good opportunity. And then, Kevin, you mentioned about share buybacks. We actually restarted our share buybacks very modestly in the fourth quarter toward the end of the quarter. And in this quarter, we returned about $240 million to shareholders, a combination of our dividend plus about $100 million in share buybacks that we assigned all to our dilution management program. So we are back in the market. I do expect that to continue. I expect this year we'll return around $900 million to shareholders, both in the form of our dividend and our share repurchase program. But I think that the key takeaway you should have is the company continues to generate a significant amount of cash, and that gives us a lot of financial flexibility to pursue growth, both organically and inorganically.
Kevin Grundy
Got it. Very helpful. Good luck.
Kevin
Thanks, Kevin.
Operator
Next question comes from Jason English with Goldman Sachs.
Jason English
Hey. Good afternoon, folks. Thank you so much for spotting me in. Very much appreciate it. A couple of quick questions. First, based on your remarks, it sounds like you're still running behind demand in health and wellness, effectively selling everything you can make. In that context, the $800 million revenue you've been able to produce to and sell to the last two quarters, any reason to believe that would drop off as we go into the second quarter?
Kevin
Hey, Jason, this is Kevin. We expect to still continue to have a very strong Q2. As you heard, we think we'll be up double digits. You know, the one thing I'd point to is if you look at our Q1, we delivered 27% revenue growth. About two to three points was related to rebuilding retailer inventories. That was on Kingsford, our vitamins, minerals, and supplements, as well as our Clorox liquid bleach. We've made pretty good progress on catching up with demand on Clorox bleach. And so we rebuilt some capacity in Q1. So I expect that to have some impact on Q2, but beyond that, I expect to see continued, very strong performance in our cleaning portfolio. And that's a, my comment is a global comment, not just in the US, but globally.
Jason English
Got it. So, so maybe not the 813 level. We're probably not too far off. That's what I heard. Your full year guidance from a reinvestment perspective. suggest that if I could look at AMP and I just compare it sort of a clean year in fiscal 19, you're looking to spend roughly $180 million more in AMP than you did two years ago. And SG&A is expected to be up around 150 million than it was two years ago. As we think forward, how much of those costs do you expect to stick? And how many of them do you think you'll have the flexibility to retract when and if demand begins to subside?
Lisa
Yeah, thanks, Jason. I'll start with that. You know, these investment levels are not a mandate in our business. They're a choice. And we're choosing to lean into the momentum we see in our portfolio right now behind some of what Kevin covered. Household penetration has more than doubled the amount of our portfolio that's stable or growing. We have the highest ever consumer value measure, so the percentage of people that deem our products as superior. We are seeing people enter our categories at rates we've never seen before. And we're seeing repeat, although it's early, strong. And so what we're trying to do by increasing our advertising and sales promotion spending, by increasing our admin spending, is about accelerating the long-term performance of the company. And that is what we are aspiring to do. And so it's a choice. It's not something that we have to do or that's dictated by the market. And we think it's a smart choice because what it allows us to do is hold on to new households. And you know that customer acquisition is one of the toughest things we do in established categories that have high share, so we want to make sure that we're doing that. We see additional places where we can grow household penetration in the US and beyond in our categories, and we want to ensure we're doing that. And then we want to support the behavior change that we see with consumers, whether it be in health and wellness, the fact that they're drinking more water or taking more supplements. In hygiene, the fact that they're cleaning more The fact that they're cleaning new surfaces and they're doing it inside and outside of the home. Supporting new behaviors as people stay at home. So people have been delighted by the fact they get to cook and they're actually enjoying more time around the family meal table. And they're able to use different methods of cooking like grilling during the week, you know, not just on the weekend or a special occasion. So we think this investment in both administrative spending and in ANSP supports keeping those new consumers in, bringing additional people into our franchise in hopes that we can accelerate the long-term performance. But I just want to be clear, it's a choice, and it's always a choice that we can revisit if these behaviors are not as sticky and we can optimize. One other fact I'd give you, Jason, because I think it's important, we went back and looked at our spending. Recall that we put about $70 million of incremental spending in the back half of fiscal year 20. And the return on investment was extremely strong, and it gave us confidence to lean in in fiscal year 21 that this is both a good short-term spend and long-term spend.
Operator
Super helpful. Thank you so much.
Lisa
Thanks, Jason.
Operator
Next question comes from Olivia Tong with Bank of America.
Liberty Mutual
Great. Thanks. Good afternoon. My first question is around the impact of volume growth and mixed-gross margin that you called out, because on volume growth, Could you talk about why it was such an outside contributor this quarter versus last? Because volume was strong, obviously, but only a point different versus Q4. And then on mix, I understand the aggregate benefit, but I suspect you saw a gross margin improvement in each of your segments as well. So could you talk a little bit about promotion, whether that was a factor or lack thereof was a factor?
Kevin
Hi, Olivia. Yeah, I can talk about those questions. Let me start with the benefit of volume to gross margin. It was more impactful in Q1, as you said, versus Q4. We got a little over 400 basis points of benefit to margin in the Q1. If you go back to Q4, it's about 350 basis points of benefit. And so as we've seen our volume continue to grow, we delivered about 22% volume growth last quarter, and we're up stronger this quarter. So we're seeing a little bit incremental benefit. And then on the mixed side, the mix was really driven by business unit mix. As we share with you in our prepared remarks, we saw very strong growth from our household segment, and that tends to have a higher revenue and higher margin, those businesses relative to the average for the company. So we have five points of favorable price mix. It was mostly all mixed, and it was mostly driven by the strength of certain ones of our businesses growing at an accelerated rate. Only two things are forever, love and Liberty Mutual, customizing your car insurance so you only pay for what you need.
Liberty Mutual
That's helpful. And then on consumption trends in your key categories, obviously lots of moving parts as you still catch up to demand in the health and wellness segment. But then you're obviously going against some volatile comps in household. But specific to household, can you just talk about the drivers of the acceleration there? Because The comp was easier, but it was two points easier versus Q4, and you accelerated your growth by over 20 points. So how much of this is related to, you know, exogenous factors like COVID and more time at home or an active outdoor season versus attracting new consumers to the categories or your brands? And what do you think is sort of a sustainable growth rate for the household business going forward?
Lisa
Olivia, I'll highlight two businesses. I'll highlight Grilling and Glad as good examples of what we've done and what our expectations are moving forward. So Grilling more than doubled sales as we talked about, and this was due mainly to strong consumption. We did see some inventory replenishment, but that was about a third of what we saw from a sales list perspective. And what's going on are two factors that are coming together really nicely. We spoke about in our investor day in October the fact that we were rebuilding our business plan on grilling from the ground up. And that was based off of business plans that were in partnership with retailers to grow categories and fundamentally reinventing our innovation program on grilling. And that has worked very well. You combine that with new behaviors we're seeing in the grilling category, and that's really where we got to the place where we experienced double digit sales growth. And what we're seeing from consumers is this. About three-quarters of people, even as mobility has increased in the U.S., are continuing to cook at home and expect to continue to cook at home as they move forward. We've seen 50% of charcoal grillers grill more during COVID, and the vast majority of those expect to continue to grill more, regardless of whether or not COVID is around in the near future or farther ahead. And the most exciting thing for us is we're seeing grilling occasions become everyday meal occasions. So before, you know, most of the time when people were grilling, it was for the weekend gatherings outside for holidays. And now we're seeing the grill being used for everyday occasions. And we expect that trend to continue. So those two things coming together, a revival of our business plans, having the right merchandising plans in place. And, you know, there was very little price discounting during this entire period of COVID. And we still saw the volumes hold steady and the sales increase that we experienced. So we think that behavior is here to stay, and based off of the innovation we have planned over the coming years, we anticipate that we'll be able to meet these consumer behavior change needs and continue to grow the grilling category. Then if we look at GLAAD, it's a similar story. We were back focusing on the fundamentals of price gaps, innovation, ensuring that we had the right distribution, and that has paid off for us in addition to the consumer trends we're seeing. So up double digits behind strong consumer demand, And this is really about consumers staying home more and cooking more. So what we've heard is people are using more trash bags because they're generating more trash. So purchase frequency is up for GLAD in particular. And about a third of households claim to be using at least one full bag of kitchen trash per week. And as people have told us they continue to cook at home in the future, we expect that to continue. You know, the other thing I'd call out on GLAAD is the innovation that's supporting people through this time. As Lisa highlighted in her prepared comments, we've launched GLAAD for slugs with Clorox, and that's doing extremely well. It's early days, but we're seeing really good consumer acceptance, as well as the GLAAD bags we launched in Q3 that are experiential with both scent and color. Those continue to have very strong velocities and are supporting consumers during this time. And one other thing I would call out, which I think is exciting for this business, is we've seen household penetration increases in GLAD, and we've seen higher household pen increases from low-income consumers. So we are offering them the right value at the right time as they stay home. And if we look to the future and we think about what these businesses can do, we certainly see additional room for us to grow household penetration and for us to continue to retain those consumers. And that's why we're leaning in and investing in innovation and leaning in and investing in advertising. But what we would expect in the back half as we lap a strong comp is, you know, we would see that growth rate rate come down. But if you compare this period versus pre-COVID, say fiscal year 19, we're still experiencing very strong growth.
Operator
Thanks. Congrats on a great quarter. Next question comes from Steve Powers with Deutsche Bank.
Steve Powers
Yes, hey, thanks. Just a couple of quick follow-ups, if I could, and then I actually really want to ask about the international supply chain wipes. But just to clean up what you were just talking about, Olivia, household and lifestyle, you mentioned the inventory catch-up. Can you just confirm whether those inventories were back in balance actually in the quarter or whether there are any lingering pockets of dislocation we should be aware of?
Lisa
Yep, for grilling, we have mainly gotten back to a point where we are in supply. And given this is the smaller quarter for Kingsford coming up, just given seasonality, we think we're in a good position moving forward. We still have some work to do on GLAD, still have additional work to do on vitamins, minerals, and supplements and Brita. So we're not out of the woods yet. And what we'll say is it'll be a staggered recovery across those businesses that we have remaining over the next two quarters.
Steve Powers
Okay, okay, that helps. And then on the international supply chain and wipes, can you give us a little bit more detail as to what that looks like as we stand here today, how expansive it is, how much is insourced versus, I presume, most of it outsourced, but just some color there, and then how that may be likely to change over time as you build out against the opportunities that you've spotlighted.
Lisa
Happy to. Yeah, this supply chain was incredibly important for us to build it local in market so that we could react to the opportunities we saw quickly. And we stood the supply chain up in just a matter of months. And we already have product shipping into countries today. We do have locations around the world where we're supplying because, again, we have business in Latin America and Asia. And so we're thinking about that expansion with ensuring that we have distribution availability in that market. We also have designed this product from the ground up as well specifically for the consumer in those markets. So the needs can be a little bit different depending on the country that you're in, the size of the wipe, the way that they want the lotion to feel. So again, did that within a matter of months and stood it up. We'll continue to be flexible just as we have built this business in the US over the last 20 years. As we expand in international, we'll have all of those things under consideration. How much makes sense for us to have in house? How much makes sense to have with third party suppliers? But the good news about this is we find this supply chain to be scalable. and we'll lean in and pursue this opportunity aggressively because we think our products can help so many more people around the world.
Steve Powers
Okay, thanks, Linda. Appreciate it. I'll leave it there.
Lisa
Thanks.
Operator
Next question comes from Jonathan Feeney with Consumer Edge. Jonathan, your line is open. Once again, if you'd like to ask a question, please press star one. We have a question from Lauren Lieberman with Barclays.
Jonathan Feeney
Great, thank you. I guess first I just want to talk about untracked channel dynamics, because you were helpful in sharing that about two to three points of the sales growth this quarter was related to restocking retail inventories. But there's still kind of even outside of that, you know, a number of these businesses that really don't tie to what's showing up in Nielsen. So I was curious, I guess, if there is new distribution we should be aware of for GLAAD or for Kingsford in particular. And if not, just, you know, is the performance offline, you know, dramatically different, sorry, untracked, dramatically different than tracked?
Lisa
Sure, Lauren, happy to start on that one. So I think it's safe to say that the relationship in our performance in tracked channels and untracked is going to be less linear over time and is certainly less linear in Q1. But I think it would be helpful to back up and just set the backdrop for what we've seen in fiscal year 20 and then specifically get into Q1 and then our expectations on this one moving forward. So if you back up in fiscal year 20, Track channels for us as a total company, including international and our professional products business, represented about 60% of total company sales. 80% of total U.S. retail is in track channels. And what happened this quarter is we had strong growth in professional products and international, and that accounts for about a quarter of our sales growth, which of course is not accounted for in Nielsen, as you highlighted. But if you looked at track and non-track channels, those growth rates were about the same at about 20%. And that makes sense because we've been on allocation for a number of our businesses, so you would expect to see both of those at about the same rate. But as you mentioned, Kevin called out inventory, and as we started to replenish inventory in businesses like Kingsford, Brita, Bleach, and vitamins, minerals, and supplements, that counted for about two to three points this quarter of the disconnect. We also had... a year ago inventory effect if you think about grilling because last year we had heavy inventory. This year we had low inventory and heavy sales and so we were replenishing that consumption and you saw a disconnect in grilling. And then the one other thing I'd call out for you, Lauren, is promotional periods versus year ago. And I'd really caution everybody against using narrow time periods like a week or four weeks because those periods have changed year over year and it causes noise in the data. as well as the fact that we were not merchandising anything in our cleaning and disinfecting portfolio given our supply. So those two factors, both inventory and promotional, also contributed. And then going forward, we'd expect this disconnect to continue because we expect strong growth from international, strong growth from professional products, and then as more consumers move online, more of that will be untracked.
Jonathan Feeney
Okay. That's super helpful. The other question I have is a little bit longer term. So historically, a key kind of mantra for Clorox was big share brands in mid-sized categories, right? And that's still in your investor slide deck and still kind of how you talk about your business. The thing, though, is that your previously mid-sized categories are becoming really big categories where everybody wants to participate. So I just, Linda, wanted to talk a little bit about how you may be factoring that change in whether it's competitive dynamics, overall category size, attention being paid to these businesses where you've kind of been able to operate at a very high level, but arguably with a bit less competitive intensity historically than maybe the case going forward.
Lisa
Sure, Lauren. Let me try to take that in a couple of buckets and start first with just your portfolio question and You know, I feel terrific about our portfolio. If you look at the broad-based growth we've had, eight out of ten businesses with double-digit sales growth, growing most businesses, expansion and household penetration, you know, strong consumer value measure across those businesses, I think our portfolio is in a terrific place to be competitive. And then if I answer your question around big share brands and midsize categories, I do think that's what we're still about. And these categories, even though there's a lot of attractiveness, are still relatively small to some of the categories in store. And even with the growth rates we've been experiencing, we would still consider them to be mid-sized. And then if I think about competition, maybe I would disagree a little bit, Lauren. I think our categories have been competitive for quite a long time. You know, we've had national players, if you think about cleaning in that business and certainly internationally for a long time. People have entered in our space and wipes before several times. So I think that's going to continue to be competitive and to your point, will be more competitive in the near future because it's a very attractive place to play right now. And what we turn back to is really what separates us and how we think we can win and that starts with having strong brands that consumers love and that they're loyal to. And as I highlighted at the beginning, those factors around the health of the portfolio, our household penetration, Our consumer value measure scores, how we're seeing people enter our categories give us reassurance that we have the right brands to win in that space. And then Ignite really elevates the role of innovation, and I think that's going to be critical for us to win in the future in these categories. People's needs are changing, their behaviors are changing, and we need to innovate to meet those new needs. And we're feeling terrific about the innovation program we have in place now. about the innovation you can expect to see in the back half of fiscal year 21, and then well beyond that. We're feeling great about that. So for us, again, that moment is about investing right now and leaning into the strength of those brands, knowing it's going to be more competitive, focusing relentlessly on superior consumer value, and ensuring that people know that our brands offer them the very best when it comes to meeting their needs today as they deal with COVID and staying home more. Does that help answer your question, Lauren?
Jonathan Feeney
It does, yeah. Thank you so much, Linda.
Lisa
Thanks.
Operator
Once again, to ask a question, please press star, then the number one on your telephone keypad. Once again, that's star one to ask a question. We have a question from Jonathan Feeney with Consumer Edge. Please go ahead.
Jonathan Feeney
Hey, thanks for fitting me in. Sorry about that. I have some technical difficulties doing more than the usual. Great quarter. I apologize if this has been asked. Does your 27% organic sales gain, in your opinion, represent any data you have a share gain on a weighted basis versus your categories? Because I'm trying to figure out, you know, where you stand, particularly in cleaning, but broadly. And then as a related question, what's your current share of sales right now in e-commerce, which would probably be your fastest growing and highest contributed non-measured sales? Thanks very much.
Lisa
Sure. You know, Jonathan, I think if – we can't answer the question in full because we have categories that don't have relevant tracked share data that we can quantify. So professional products is a good example and international. But I think if you look at all outlets, we're in a place where, you know, share is about flat right now and most of that is due to supply constraints. And we would anticipate if we were in a position to better supply across those categories, to see improvement in that. And I know you know that we hold all of our businesses accountable to growing share. So that's what I would say about the first part of your question. And then as I think about moving forward and how we are anticipating looking at that, what we're trying to see is in the very narrow buckets that we compete in, whether that be online or out of home, how are we doing in that individual space? Because it's hard to aggregate this and understand what we're doing broadly. So we're looking country by country. We're looking at specific channels in our professional business to see how we're doing. And then we're looking at online. Online, specifically, about two-thirds of our brands are number one share online, which lines up nicely with the rest of our portfolio. And we're doing very well there. And that has to do with the early investments we made in e-commerce. We were one of the first to stand up a fully dedicated team. on e-commerce pure play customers as well as standing up integrated teams on our brick and click customers. So we're in a very good position online as consumers continue to move online, we'll continue to invest there. And the one other thing I would point out is we've been spending over 60% of our dollars online for a number of years. So we are where shoppers are today and that's helped contribute to that share expansion.
Jonathan Feeney
Okay, thank you very much.
Operator
Once again, to ask a question, please press star 1 on your telephone keypad. And this concludes the question and answer session. Ms. Rendell, I would now like to turn the program back over to you.
Lisa
Thank you so much, Sharon. I feel great about our strong start to fiscal year 21 and look forward to another year of delivering value to all our stakeholders. Thank you so much, everyone, and we'll speak again on our next call in February. We hope you all stay well. Take care.
Operator
This concludes today's conference call. You may now disconnect.
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