Financial Data and Key Metrics Changes - Q2 revenue was $274.1 million, a decline of 3.4% from $283.8 million in the prior year, primarily due to lower eye and ear care category sales and cough and cold category sales [10][11] - Adjusted EPS was $1.07, slightly down from $1.09 in the prior year, but ahead of expectations due to sales performance [10][11] - Free cash flow for the first half was $134 million, up 10% year-over-year, with a full-year outlook of $245 million or more [5][15] Business Line Data and Key Metrics Changes - The North America segment saw a revenue decrease of 6.1%, while the international segment experienced a revenue increase of 2.7% [11][12] - E-commerce consumption growth remained strong, with double-digit year-over-year growth, driven by long-term investments [4][11] - The DenTek brand achieved over 50% market share in its category, with a focus on dental guards contributing significantly to revenue [6][8] Market Data and Key Metrics Changes - The overall market for eye care products has declined, impacting Clear Eyes' supply and market share [44] - International OTC segment business increased, supported by higher Hydralyte sales, despite Q2 being affected by distributor order timing [12][14] Company Strategy and Development Direction - The company is focused on diversifying its portfolio and channels to drive long-term growth, with a particular emphasis on e-commerce and brand building [4][6] - Plans to enhance shareholder value through share repurchases and potential M&A opportunities, including the acquisition of Pillar Five for approximately $100 million [16][18] - The company anticipates a revenue range of $1.1 billion to $1.115 billion for fiscal 2026, with organic growth expected to decline by approximately 1.5% to 3% [17] Management's Comments on Operating Environment and Future Outlook - Management noted heightened uncertainty in the business environment due to supply chain constraints, high inflation, and geopolitical events [3] - Confidence in the business strategy and diversified portfolio is strong, with expectations for improved supply of Clear Eyes in the second half of the year [17][34] - The company has not seen significant impacts from macroeconomic trends on its needs-based product categories [33][34] Other Important Information - Gross margin for the first half was 55.7%, up 60 basis points year-over-year, with expectations for a gross margin of approximately 56.5% for the full year [12][14] - Advertising and marketing expenses were down due to timing, expected to be 14% of sales for the full year, with Q3 anticipated to have the highest spend rate [13][14] Q&A Session Summary Question: Follow-up on Clear Eyes supply and shelf space - Management confirmed that supply chain improvements are expected to benefit Q3 and Q4, but acknowledged a reduction in market share due to supply constraints [21][23] Question: Cold and cough season expectations - Management indicated that the cold and flu category is not a significant revenue driver, and it is too early to predict performance for the upcoming season [25] Question: Retailer inventories health - Retail inventories have been steady, with no significant impacts from performance issues, aside from e-commerce order patterns [27] Question: Women's health performance - Women's health category experienced noise in order patterns, but overall performance remains positive over the trailing twelve months [29][46] Question: Macro environment impact - Management noted that while consumer trends are slowing, their needs-based products are somewhat insulated from broader economic pressures [33][34] Question: Capital allocation and M&A strategy - The company remains focused on M&A opportunities while also prioritizing share repurchases, with a disciplined approach to capital allocation [37][39] Question: Clear Eyes marketing investment post-supply improvement - Future marketing investments will be evaluated based on opportunities, with no immediate increase in overall A&M spending anticipated [65][67] Question: Private label competition - No significant changes in market share or impact from private label competition were reported [68]

Core Viewpoint - Geopolitical events, judicial rulings, new law legislation, and policy changes are significantly impacting stock movements across various industrial sectors [1] Group 1 - Geopolitical events are influencing market dynamics and causing volatility in stock prices [1] - Judicial rulings are leading to substantial shifts in investor sentiment and stock performance [1] - New law legislation is creating opportunities and challenges for different industries, affecting their market valuations [1] - Policy changes are reshaping the competitive landscape, prompting companies to adjust their strategies [1]

Group 1: Market Overview - Stocks are rallying on expectations of a 25 basis points interest rate cut by the Federal Reserve in September, which is anticipated to positively impact corporate earnings [1] - Lower interest rates may lead to higher inflation and keep rates above the Fed's target of 2%, while geopolitical events are increasing, prompting central banks to buy gold and speculative investors to purchase Bitcoin and other cryptocurrencies [2] Group 2: Coca-Cola Company - Coca-Cola has a dividend yield of 3.07% with an annual dividend of $2.04 and a 64-year track record of dividend increases, maintaining a payout ratio of 72.34% [3][5] - Despite a 6.37% increase in 2025, Coca-Cola's performance is about 50% lower than the S&P 500's 13% gain, but the dividend yield remains a significant factor for investors [3] - The company continues to grow revenue and earnings by diversifying its portfolio beyond soft drinks into sports drinks, teas, and enhanced water beverages [4] Group 3: Johnson & Johnson - Johnson & Johnson has a dividend yield of 2.95% with an annual dividend of $5.20 and a 64-year history of dividend increases, maintaining a payout ratio of 55.61% [6][7] - The company has become leaner and more efficient, focusing on pharmaceuticals and medical technology, particularly in oncology and immunotherapy [8] - Johnson & Johnson's stock has increased by about 22% in 2025 and is trading at around 16 times forward earnings, which is a discount to its historical averages [9] Group 4: Prologis - Prologis has a dividend yield of 3.56% with an annual dividend of $4.04 and a 12-year track record of dividend increases, although it has a high payout ratio of 109.49% [10][12] - As the world's largest industrial real estate investment trust (REIT), Prologis specializes in logistics and warehouse properties, which are expected to have stable occupancy rates as consumer sentiment improves [11] - The company is pivoting into sectors like sustainable energy and data center development, with predictable cash flows from long-term leases and strong tenant demand [12]

Market Sentiment & Geopolitical Impact - Markets initially reacted to geopolitical events with de-risking, but the limited surge in oil prices suggests a lower risk of straits being closed [2][5] - Stress tests have been passed by the market, indicating potential for stocks to perform well [4] - Geopolitical events have not significantly altered growth and inflation expectations for US stocks, bonds, and the dollar [6] Inflation & Monetary Policy - US CPI, calculated on the same basis as the ECB's core CPI (excluding housing), is lower than Europe's, suggesting a potential dovish tilt from the Federal Reserve [6][7] - Inflation expectations are currently above CPI, which could lead to positive surprises if inflation is lower than expected [12] Market Dynamics & Investment Strategy - Consumer discretionary sector is leading market gains, while energy lags [1] - There are echoes of 2021 with some stocks receiving bizarre valuations, but institutional investors are less risk-taking due to macro uncertainties [8][9] - Retail investors, who bought the dip in April, are driving speculative activity, while high net worth individuals and institutions remain cautious [10] - Macro conditions are improving with better visibility on tariffs and regulation into 2026, supporting a bullish outlook [11] - Businesses have shown resilience, with earnings performing better despite potential economic weakening [12]