Good day and welcome to the Edgewell Fourth Quarter Fiscal 2017 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Chris Gough, Vice President of Investor Relations. Please go ahead.

Thank you, Allison. Good morning, everyone, and thank you for joining us for Edgewell's fourth quarter fiscal 2017 earnings conference call. With me this morning are David Hatfield, our President and Chief Executive Officer and Chairman of the Board; and Sandy Sheldon, our Chief Financial Officer. David will kick off the call then hand over to Sandy for the earnings and outlook discussion followed by Q&A. This call is being recorded and will be available for replay via our website, www.edgewell.com. During the call, we may make statements about our expectations for future plans and performance. This might include future sales, earnings, advertising and promotional spending, product launches, savings and costs related to restructurings, changes to our working capital metrics, currency fluctuations, commodity costs, category value, future plans for return of capital to shareholders, and more. Any such statements are forward-looking statements which reflect our current views with respect to future events. These statements are based on assumptions and are subject to various risks and uncertainties, including those described under the caption Risk Factors in our annual report on Form 10-K for the year ended September 30, 2016, as amended and supplemented in our quarterly reports on Form 10-Q for the quarters ended December 31, 2016; March 31, 2017; and June 30, 2017. These risks may cause our actual results to be materially different from those expressed or implied by our forward looking statements. We do not assume any obligation to update or revise any of these forward-looking statements to reflect new events or circumstances. During this call, we refer to certain non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles, our reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures are shown in our press release issued earlier today, which is available on the investor website section of our website www.edgewell.com. Management believes these non-GAAP measures provide investors valuable information on the underlying trends of our business. With that, I'd like to turn the call over to David.

Thank you. Thank you, Chris, and good morning, everyone. Before Sandy takes you through the financial results, I'll briefly comment on the 2017 including the state of the categories in which we compete. And then I'll discuss our outlook and plans for fiscal 2018. Overall, we ended a difficult and challenging fiscal year 2017 with a disappointing fourth quarter. In the quarter, we fell short of our objectives on net sales due to continued category declines, intense competitive pricing pressure, share declines on our Fem Care segment, as well as hurricane impacts. As a result, net sales for the full-year declined 2.8% below our third quarter outlook. For the full-year, the categories in which we compete in the U.S. declined on the aggregate 4 points with Razors and Blades down 5%, including untracked channels. Despite that challenging environment, we competed well during the year gaining dollar share on a 52-week basis in global Wet Shave, as well as in Sun and Skin Care. And despite our top-line softness, we grew adjusted operating profit 2.5%, expanded operating margin 50 basis points, and increased adjusted EPS by 11%. We did so while maintaining the investments in our core growth initiatives and in working A&P. And we held or increased promotional spending where appropriate given the intense competitive environment. We also made progress during 2017 against our three strategic pillars in support of our medium-term goals. Our first pillar is to focus on and improve our fundamentals in part by providing compelling innovation for consumers. We've done so in Wet Shave, for example, where we launched innovation in all segments including Quattro YOU disposables and the Fits Mach 3 private label offering in the many markets around the world. And we gained value share in the U.S. on a 52-week basis and gained…

Thanks, David, and good morning, everyone. I'll start with the fourth quarter results. Reported net sales in the quarter were $565 million, down 7.5% and down 8.4% on an organic basis with declines in each of the segments. From a geographic perspective, organic net sales in North America were down 13.4% and essentially flat in international. Organic net sales excluded a $4.5 million benefit from the Bulldog acquisition and a $1.1 million benefit from currency. The organic net sales decline was largely driven by lower volumes in Wet Shave and Feminine Care. Although we expected net sales in the quarter to be down, we came in below our outlook primarily due to sustained negative category trends in Women's Systems and Disposables in North America, European supply chain issues that persisted into the fourth quarter, Wet Shave category softness in Europe, as well as additional share losses in Feminine Care and some weather-related impacts from the hurricanes. Gross margin was 48%, a decrease of 280 basis points driven by lower volumes and unfavorable price mix in Sun and Skin Care and unfavorable cost mix in Wet Shave, reflecting negative transactional currency impacts, lower volumes, and an unfavorable product mix. A&P expense as a percent of net sales was 12.6%, down 90 basis points, with lower spending in Feminine Care specifically related to a prior-year Care Free media campaign that we did not repeat. The decline also reflects a shift of some advertising spend to trade promotion support, which is reflected in the net sales results. ZBS savings on non-working spend also contributed to lower A&P in the quarter. SG&A expense was 16.8% of net sales compared to 17.7% in the prior-year quarter. The improvement was a result of lower incentive compensation expense this year and cost savings from our ZBS initiative,…

Thank you. We will now begin the question-and-answer session. Our first question will come from Ali Dibadj of Bernstein. Please go ahead. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Hey, guys. So, a couple of things on my mind at least. One is that there's just so much uncertainty that you've described, in the category, competition, sounds like retailer shelf space, certainly on commodities as well. So, I guess, on a scale of kind of 1 to 10, 10 being completely solid, we think this is all good, or 1 being, we really don't know, how certain are you about the 2018 guidance that you've given? And, look, you may want to kind of give that 1 to 10 for top line and margins and EPS separately, but just trying to get a sense of your certainty given all the uncertainties.

That's an interesting question. I think it's certainly not a 10. As you indicate, there's a lot of factors in flux, and it's certainly not a 1. I think that we're comfortable with how we're approaching the market. So, we're very, very comfortable that we know the levers that we're trying to attack. I think we're very confident in our innovation. So, confidence of the plans that we've reviewed are very high. Less certain, frankly, about the outside world and the categories, and we're going to need to monitor them and be agile. So, that's how I'd characterize top line. We think that we're going after the right levers from cost and productivity, and that we'll keep banging on those, because we know we're going to need to be agile. And depending on how categories change, we're going to need to be flexible. So, I think that we're pretty confident in the middle of the P&L. And so, therefore, reasonably confident on the bottom line. That's kind of my best answer, Ali. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Okay. Okay. So maybe 5-ish on the top line then progressively towards 10 on the bottom line given the flexibility you have. So, on the guidance again, you certainly expect the back half to be a little bit of a resurgence, so 60% on the EPS, positive low single-digit-type organic sales growth to offset the first half. Can you talk a little bit more about the innovation? It certainly sounds like it's in a lot of categories. Is it really reliant on all of that innovation to drive your top line? How does it work with retailers, so at this point do you have kind of agreed-to shelf space or launches agreed to in the category with the retailers already? And then, do want to ask about A&P phasing and investment phasing as well throughout the year. Thanks.

First of all, on the innovation front, yeah, we're very optimistic on the innovation front. And I can go into that more throughout the call. To your point, I think we're very comfortable with our plans with the retailers for the launches both in the U.S. and in Europe and around the world. So, I think that those launches are pretty well put to bed. I think certainly there's some details to work out, but they're pretty much put to bed. Beyond innovation, certainly there are planogram changes coming in the different segments at different times of the year, generally Q2 to Q3 in Fem Care. And I think there's still room for those to change. And in fact, room for us to rectify some of the weaknesses that we've had, particularly in Fem Care. So, beyond innovation, we need category management, we need to gain share of shelf throughout the year beyond innovation. I guess there was a question about phasing A&P, maybe, Sandy, if you could touch on that for me.

Right. So, versus 2017, we are phasing more of our A&P into the first half of the year. I would also say when we talk about spending, we're really talking about spending across the entire P&L. So, both in A&P and against gross sales for different trade promotional and couponing and pricing activities. And I would say we certainly have aggressive plans on that as well in the first half. Some of that is obviously behind the innovation that's launching in Q2 and some of it's really behind the rest of our core products and portfolio.

Okay. Thank you, Ali. Operator, next question please.

Our next question will come from Kevin Grundy of Jefferies. Please go ahead.

Hey. Good morning, guys. First question I'd like to start with kind of coming back to the guidance. I think we're all trying to bridge the gap a bit, I guess, between what was clearly a challenging quarter and year to where you expect to land in fiscal 2018. But I was hoping you'd touch on the innovation a bit. And without asking you to front run anything, as we look at some of the brands that have had success in blades, more recently in Dollar Shave and Harry's, it's been around price point, it's been around packaging, it's been around building strong brands that resonate with consumers. So, what's sort of the unmet need that you're sort of targeting here with this innovation that would give the market confidence that you can get back to sort of flat to down 1% sort of growth? So, that's the first question. Maybe anything you can help us with there with innovation to kind of give us a little bit more confidence on the topline. And then second question, if I could just squeeze this in also is on M&A and capital allocation broadly. And some of the difficulties in the business provide a greater urgency to diversify away from the base business or alternatively, there's a disruptive brand out there in Harry's that's had tremendous success in both B2C and brick-and-mortar retail that resonates well with millennials. So, I wouldn't ask you to comment on that business specifically, but how you're maybe thinking about diversifying away from the base business versus potentially bolting-on to the existing businesses. So, thank you for both of those.

All right. Thank you, Kevin. On innovation, we've actually put a fair amount of effort over the last several years to become even more consumer-centric and to develop more impactful innovation. And what we've done is we've really tried to work on consumer insights informed by emerging trends, call it customization, personalization, but also convenience. Marry up those insights with technologies that are obvious and perceptible to consumers. And then, thirdly, marrying that up with – in an offering that reinforces our brand equities. Let me bring that to life with two of our launches coming over the next year. One is on Intuition F.A.B. We don't mind if folks think that F.A.B.'s short for fabulous, but it actually means Forward And Back. And it's a new unique bi-directional razor for women that is the only razor that safely shaves forward and backwards. We think it's great for women, particularly for legs, concept scored in the top 5% to 10% in all the markets that we've tested it. And it also fits the Intuition brand which is built as an all-in-one convenient simple proposition, and this just reinforces that brand equity. Secondly, let me talk for a second about Hydro Sense. We're actually coming out with a new razor handle that can be personalized. It's a shock-absorbing handle to follow the contours of your face, but there's also a switch that allows you to operate it in a more rigid way. I actually like that for below the nose. So you can change it depending on what you're trying to do with it and personalize it to your taste. We're also launching three new cartridge ranges with different skin conditioning gels, so you can customize the shave that's best for your skin. This all reinforces the Hydro brand. It's all about skin care, skin performance and we think that'll reinforce the brand and help us greatly in the market. So, that's just two examples. We can go down every segment within the, give you a product line, has innovation coming in the next year. On the M&A front, we continue to look for bolt-ons to reinforce and to complement our product lines with a particular emphasis on skin care, grooming, close-in adjacencies. And that's a key priority for us.

Thank you, Kevin. Operator, next question please.

Our next question will come from Bill Chappell of SunTrust. Please go ahead.

Thanks. Good morning. Actually a couple of questions not on Wet Shave, just first on Fem Sun Care. Just trying to understand the fourth quarter performance if that was meaningfully different from what you expected because I thought you'd have a pretty good line of sight to returns after a season. So, just trying to understand how that impacted you. And then also on Feminine Care going forward, I mean, is there any R&D, anything we can see that will slow the declines? I mean, I understand we're going to continue at this rate for the next three quarters, but is there anything kind of like Wet Shave where you're hoping that it'll stabilize, or should we just expect it to be in decline for the foreseeable future?

Yeah. Okay. Great. Thanks, Bill. On the Sun Care, the quarter played out about where we thought actually. For a little context, in the fourth quarter, sales are roughly 25% of consumption. So, it's a very light sales quarter that is therefore very susceptible to small changes, being a large percentage relative to consumption. And we kind of said that last year we had a very strong quarter. We knew coming into this that that comp wouldn't be favorable. You take the quarter out of it, and I'll point out again, we think we had a very good year both in the U.S. from a share point of view, and also international. And we were happy with our innovation and our market growth, and we look forward to progress in the future there. So, Sun Care was kind of where we thought. Feminine Care came in softer. We actually lost a little more share than we thought. And looking forward to your question, we do see declines continuing now through Q3 till we anniversary the planogram losses that we suffered this year. We actually do look to work to stabilize them beginning at that point. We have innovation plans for that timeframe and a road map for future innovation over the coming several years. We also – what we'll also – it isn't just an innovation play through category management working with the trade. We need to increase share of shelf and the quality of placement. And we've been making changes organizationally to help support both with our new COO. I think that organizational change, it will bring better operational focus against the business. And we've also just gone to a new business unit organization with a GM, to also help on agility and alignment. It's an organization model that has proved to work well for us in the Infant category, another one that's kind of uniquely U.S., North America-based and is different from Shaving or Sun. So, for those reasons, we will aim to, stabilize them over the medium term.

Thank you, Bill. Operator, next question, please.

Our next question will come from Jonathan Feeney of Consumer Edge Research. Please go ahead.

Thank you. Good morning. Just a couple quick ones. What role do you think household inventory is playing in North America Wet Shave, particularly around systems? I mean, we're getting deep into extended period here of your leading competitor discounting. And just kind of wanted your take on, is there some – is what's happening here just some level of overhang? And do you have any visibility into households and are people trying different systems, having lots of different razors around? I mean, I can't be the only one who – that wasn't the case three or four years ago. And my second question was incentive compensation, obviously is there anything funny going on with that, that could affect the pacing of 2018 which presumably some new targets for that? Thank you.

All right. Hey. Thank you, Jonathan. On the household inventory, it's a question we've tried to figure out how to answer for a long time, but I got to tell you, I don't think we have very good visibility. So, my comments will be anecdotal. We – even household panel data, it's just not something we've been able to put a fine point on. And I really do think every year in each of the last 10 years, household inventory of razor handles has gone up. To your point, every launch with all the effort, every launch of a new handle and all the trial and stuff, everybody gets a handle. And, I'm sure in most households, there's two or three handles sitting around. Now, I don't know that it's gone up. I think it's been the case for many, many years. The other place where I could see an inventory overhang frankly is in the shave clubs where they've been sending a lot of cartridges every month, more than I think people use. So, as that segment slows, I could see inventory going up there. But as I say, that's only anecdotal. And then I have no real comment, no insight about the sales – your second question. I don't think that that's playing at all in the phasing.

Okay. Thank you.

Okay. Thank you.

Operator, next question please.

Our next question will come from Kate Grafstein of Barclays. Please go ahead.

Great. Thank you. I just wanted to confirm that private label is still roughly 20% of your Wet Shave business. And as you look into the next few years, what are your growth aspirations for this business and are you open to making it a bigger piece of the overall Wet Shave portfolio despite the negative mix it has within Wet Shave? Thank you.

Great. Yeah, I don't have the exact number but it's about that. So, that's a good order of magnitude number. And we have plans to grow private label roughly in line with overall shave. And it's less of a goal than, we're going to compete and we're going to satisfy consumer needs, whatever they want to buy. So, I think that it's an output, not an input. We're going to support it. We're going to work with our customers, get great category solutions where private label certainly plays a big part, but it's only part of it. We're going to bring innovation at the super premium level, at the premium level, at the value level, and at private label, and it'll be a balanced effort. It'll be market driven.

Okay. Thank you, Katie. Operator, next question please.

Our next question will come from Wendy Nicholson of Citi. Please go ahead.

Hi. I just had a question about the distribution losses in Fem Care, because Playtex in particular is still a big brand. So, I'm just wondering where you're losing distribution and when the retailer tells you you're losing distribution, why is it? Do you have a supply chain issue? Is it just that they're trying to take brands out of the category? Are they keeping the Playtex brand on shelf or is it more in the Stay Free business? Just if you could give us a little bit more color there so that we can anticipate, okay, are there – is this a problem that could affect more of your portfolio or is it really limited to Fem Care, et cetera? Thanks.

Yeah. The Fem Care planogram issues are Fem-only related. They're not – those kind of buying decisions and the merchandising decisions are category-specific. So, that's – what we lost was generally – when we're referring to that, we're actually talking about the loss of the sport pads and the liners products that we launched, what, a year and a half or two years ago. And the reason for it was fairly simple. We didn't get to the threshold turn metrics that the trade wanted fast enough. And so, it was a fairly objective decision. It also reflects that there's continued efforts to try to consolidate space, brands, whatever, across CPG, not just Fem Care. And that's a pressure that we faced and that's where we lost spacings.

Got it. Thank you.

Thank you, Wendy. Operator, next question, please.

Our next question will come from Jason English of Goldman Sachs. Please go ahead. Jason English - Goldman Sachs & Co. LLC: Hey, good morning, folks. Thank you for squeezing me in. Two questions. First, you talked about the slowdown you're seeing in international markets. Can you contextualize that, give us a little bit more color? Because, obviously, we don't have the same degree of visibility into those markets as we do in the U.S. And then I want to come back to a question I think has been asked multiple ways, and that's just, the path to how you get to your guidance in the back half? I mean, you're talking 2% to 3% organic sales declines pivoting to 2% to 3% growth and the mid-teens earnings decline pivoting to double digit growth in the back half. I suspect there must be some sort of transitory drag this year that we'll be cycling in addition to sort of your aspirations with innovation. But maybe you can contextualize those puts and takes so that we can build up a little more confidence behind that divergent trajectory from first half to second half.

Okay. Great. Thank you, Jason. The slowdown that we referenced internationally was primarily Western Europe. So, let me comment about Western Europe. The categories have been a little sluggish over the last year. And it got a little worse in the most recent quarter. The more medium-term issues are, one, that the hard discounters that are famous in Europe continue to grow and accelerate growth and they're taking it out of what's the Nielsen measured part of the market. So, part of the drag in the measured channels is due to that channel shift. More recently, it was a soft quarter, softer than we thought it would be. As one competitive niche competitor launches, like Veet and the Philips One Touch that they launched a year ago and they didn't cycle and they didn't comp that, so the categories look soft. The other thing in the marketplace is that the trade's really going to less off-shelf promotion and are emphasizing the category less. And in the short term, we actually suffered in that and lost some share against what was a strong year ago period. Looking forward, we're going to work on our commercial tactics to succeed in a world where there's less off-shelf merchandising. We have innovation coming that I talked about, greater investments and then better supply chain. And those are the reasons we think we'll come back next year. In terms of the glide slope for the second half being stronger, we talked about innovation and we talked about Fem Care trying to attack planograms and the launching innovation. And there's a big other one here which is, the category has really been buffeted by our largest competitor who has thrown over $200 million in price cuts. And that really began, call it, Q2, and that should anniversary roughly by Q2 of next year at the end of that, let's say. And there is an expectation that at some point, they're going to want to grow, and this category will be a little bit transformed with this reset, but it will go into a more normal category where there's segments, and they're launching new price tiers and all that. And it's going to get to a place where everybody is going to compete in all the different segments through innovation, brand equity, et cetera, and are trying to bring value back to the category. So, there's an expectation here that this reset will moderate in the back half also.

Okay. Thank you, Jason. Operator, next question please.

Certainly. Our next question will come from Iain Simpson with Société Générale. Please go ahead. Iain E. Simpson - Société Générale SA (UK): Thanks very much. Two questions from me, please. Firstly, just looking at the year as a whole, I know you've talked quite a lot about the phasing, but you're guiding for it sounds like maybe flat, minus 1% organic in 2018. You did minus 2.8% in 2017. It doesn't sound like P&G's getting less aggressive in the U.S. anytime soon. It sounds like razors ex the U.S. is sequentially getting meaningfully worse especially in Europe. So, I'm just struggling on a full year basis what's going to drive the improvement here. Is it just kind of better innovation and execution and share gains against an end market that's kind of static or, as bad or worse. And then secondly, just on that, you're cutting marketing spend by meaningful amounts as your top line growth is deteriorating. Now, I would have thought in response to slowing end markets you kind of be looking to step up A&P, try and gain share to cover your fixed costs. And I just wondered if you'd kind of talk through the rationale and where you see A&P stabilizing? Thanks very much.

Okay. Thank you. Again, the expectation going forward is that innovation, better category management and absence of negatives in Fem Care will help in the back half and then like I had just mentioned the reset – the competitive reset anniversaries later in the year. So, all those factors play into a belief that the current trends will continue pretty severely through the first quarter and into the second quarter and then moderate in the back half and our competitive wins begin later in the year. On an A&P point of view, our plan is to reinvest all of our savings of non-working A&P, plow it back into A&P and then even more so, plus increase trade spend. So, when you add up the total marketing pressure, we're actually planning a healthy increase next year in support of that, of innovation, but also of the legacy brands to support planogram changes.

Thank you, Iain. Operator, next question, please.

Having no further questions in our queue, this will conclude our question-and-answer session. I would like to turn the conference back over to Mr. David Hatfield for any closing remarks.

Thank you, all, for your time and your interest. Thank you, all. Have a super day.

Ladies and gentlemen, the conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.