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We're very excited about the clarity this work is bringing to the business and the value creation opportunity ahead of us. But we also recognize that the path forward will not be a straight line. During our first quarter earnings call, we laid out five key priorities for fiscal 2023 which are all progressing nicely. Let me say just a few words regarding each of them. First, starting with an operating cash flow. Year-to-date, we have driven a year-over-year improvement of over $700 million, largely by right sizing our inventory levels through improved forecasting and supply planning processes. Second, gross margin performance improved sequentially behind our ongoing fuel productivity program and Project Ovid which you will recall completely transformed Newell's domestic go-to-market operations.

We are on track for a record high year on productivity savings across the supply chain. Third, Project Phoenix is simplifying and strengthening the organization by leveraging scale, reducing complexity, streamlining the operating model and driving operational efficiencies. The program is pacing well, and is on track to deliver $220 million to $250 million in pre-tax savings upon its full implementation. Fourth, our SKU count, which was over 100,000 as recently as five years ago, is expected to be down to less than 25,000 by the end of the year, with numerous other complexity reduction actions also underway. Finally, we have successfully transitioned to and are operating in a new operating model with three segments, centralized manufacturing and supply chain and on one Newell approach with our top four customers and across most geographies.

It is from this much improved operational and organizational foundation that we made an important where to play choice to focus on and drive a disproportionate amount of our organizational and financial resources to our top 25 brands and our top 10 countries, which each represent about 90% of sales and profits. Once that decision was made, we turned our attention to our how to win choices, which were fully informed by the capability assessment we have just completed. That assessment clearly demonstrated the need for us to significantly improve our abilities in consumer and customer understanding, innovation, brand building, brand communication and retail execution. That's why when we revealed our new strategy in Paris last month we said we are making a major pivot in our frontend consumer facing capabilities to properly support leading brands in top countries.

Since these how to win choices are cornerstone elements of the new integrated strategy, we have started to fill talent gaps across key areas and have established clear action plans and KPIs for each capability improvement project. For example, we are upgrading the company's ability to understand consumer and customer wants and needs. This should enable actionable insights around superior product development, leading to stronger claims in a more impactful and focused innovation pipeline as we concentrate on fewer, bigger and longer lasting innovations. In addition, we recently revamped Newell's innovation process, which will be underpinned by proprietary consumer insights. As part of this work, we designed and instituted a project tiering system and implemented an enterprise-wide biannual innovation process to sharpen the company's innovation plans, drive alignment on the funnel, and determine prioritization and resource allocation as we identify bigger bets.

We also put in place a centralized tracking system for all new initiatives to enable multiyear technology platforms and ensure appropriate financial rigor to drive accretive margins. Relative to brand building and brand communication, we're building out a comprehensive brand management function, which was not in place previously. Going forward, Newell's brand managers and the multifunctional teams who support them will be responsible for profitably growing our top 25 brands in our top 10 countries alongside a newly redesigned brand communications governance process. Finally, as it relates to retail execution, our sales teams are leveraging the portfolio of Newell's leading brands and scale to actively pursue new distribution opportunities, which they've identified across every business, while also dramatically improving our sales fundamentals in existing accounts.

Although it's still early days, I'm encouraged by the progress we were making in bringing the integrated set of where to play and how to win strategies to life. Importantly, these are not just corporate plans. They've been formally cascaded throughout the organization, informing the segment, functional and regional strategies where work is ongoing. Key members of the leadership team and I have visited six of our top 10 countries across Europe and Latin America in the last two months to ensure we are driving the strategy into execution. Now, before turning the call over to Mark who will discuss our financial results and outlook in detail, I want to address the revisions we have made to our top line estimates for the second half of the year. First, we are incrementally more cautious on the consumption of discretionary products, largely due to the resumption of student loan payments in October.

As payments restart after a multiyear moratorium, many consumers will undoubtedly have to manage their budgets even tighter given persistently high core inflation, which has lowered real consumer income. Second, several of our major retail customers recently revised their shipping terms on our business, moving from what is known as direct import to domestic fulfillment. While we welcome this move, because we expect this change to be a positive for Newell longer term, it does put additional one-time pressure on back half shipments as their weeks of inventory coverage comes down further as a result of the transition. Lastly, we are now planning the baby business more conservatively in the back half of the year, due to the bankruptcy of Buybuy Baby.

Up until now we assumed in our financial modeling that a buyer would emerge for most of their stores. Since that is no longer likely, we have adjusted our sales forecast accordingly. Revising our top line outlook and related demand plan now allows us to continue the strong progress we have made on inventory reduction, which is why we are maintaining our operating cash flow guidance for the year. Additionally, we are taking bold actions to drive stronger productivity in the supply chain, which were made possible by a recent decision to consolidate our supply chain into a centralized organization structure. Specifically after benchmarking indirect overhead at each of Newell's key facilities, we are taking a series of discrete site specific actions to right size the company's manufacturing labor force.

These decisions are never easy, but we are committed to building a one Newell optimized global manufacturing network that minimizes total landed cost, optimizes asset utilization and leverages Newell's global scale. Moving forward, we are assessing how to optimize the company's entire plant network as we look to transition to more regionalized multi-source plants with upgraded automation and digitization capabilities, where appropriate. We will, of course, share more of the relevant details as plans are finalized. These top line revisions notwithstanding, we remain optimistic on the back-to-school season, which kicks into full gear in the coming weeks. And we continue to expect much stronger performance for the company in the back half relative to the first half of the year.

Photo by NeONBRAND on Unsplash

The pace of change has accelerated across the company and we are moving with speed and agility to unlock the full potential of the enterprise. On a personal note, I would like to thank Newell's employees for welcoming me as their new CEO and for their strong endorsement of the new company strategy. At its core, our new strategy focuses on improving the company's consumer-facing capabilities, while distorting investment to the most attractive value pools and simultaneously building upon the strengthened operational and organizational foundation we have built over the past several years. Their unwavering commitment to our purpose of delighting consumers by lighting up everyday moments inspires me every day. We have plenty of work ahead, but I sincerely believe we are off to a great start.

While we continue to navigate through a challenging macroeconomic backdrop in the near term, I remain confident in our ability to accelerate the company's financial performance over the long term. I will now hand the call over to Mark.

Mark Erceg: Thanks, Chris. Good morning, everyone. As Chris indicated earlier, our Q2 results continue to reflect the significant macro-driven top line pressures we have been contending with since the third quarter of last year, namely soft consumer demand as inflation continued to put pressure on discretionary spending and subcategories continue to normalize, along with trade inventory destocking and the bankruptcy of a major retailer. Thus, while the 13% contraction in net sales of $2.2 billion and the 11.9% decline in core sales might on the surface be discouraging, we believe a more thorough examination shows the interventions we have made to improve the underlying structural economics of the business and strengthen operating cash flow are working as intended.

For example, normalized gross margin and operating margin both improved sequentially due to enhanced productivity efforts and Project Phoenix savings, which were critical in helping mitigate the significant 400 basis point headwind during the quarter from inflation. Nonetheless, Newell's normalized operating margin contracted 490 basis points versus last year to 9.1% as normalized gross margin declined 320 basis points versus last year to 29.9%. And top line softness resulted in 160 basis point increase in the normalized SG&A sales ratio. In addition, during the second quarter, net interest expense did increase $21 million to $76 million, reflecting overall higher debt and interest rates versus year ago, but the decision to right size the dividend in a nearly $700 million year-over-year reduction in inventory allowed us to lower debt levels versus last quarter by nearly $300 million.

Our effective normalized tax rate of 13.7% was slightly below a year ago, which when combined with the other elements we just reviewed, brought normalized diluted earnings per share in at $0.24, which was considerably better than the $0.10 to $0.18 outlook we had previously provided. Turning to operating cash flow, the planning team did a great job managing inventory levels down while increasing fill rates, which in North America improved to 94% year-to-date from 82% last year. This allowed us to generate $277 million of positive operating cash flow year-to-date through the second quarter. Importantly, this stands in stark contrast to a $450 million use of cash during the same period last year. Therefore, through the first six months of 2023, operating cash flow improved by more than $700 million and encouragingly in transit inventory as of June 30 was approximately $275 million below year-ago levels, so we are confident inventory levels will be even lower throughout the balance of the year.

The company's leverage increased to 6.3x at the end of Q2, which was nearly one full turn better than anticipated. We believe leverage has peaked and expect it to drop to approximately 5x by the end of the year. Our long-term goal was to reach leverage at 2.5x. As we look towards the balance of the year, Chris laid out the incremental top line pressures we are facing, so I will not reiterate them. However, it does bear mentioning that this additional sales compression, coupled with our decision to lower inventory balances even further, does create a short-term fixed cost absorption challenge. Although we are aggressively optimizing the company's manufacturing labor force within the confines of our existing planned network, fixed costs deleveraging will still weigh on our second half gross and operating margins.

Second half operating margin will also be impacted by our decision to invest in capability building and brand support to implement and accelerate critical aspects of our new corporate strategy. Given that context, we've assumed the following for the third quarter. Net sales of $2.11 billion to $2.16 billion with core sales down 7% to 5%. Traditionally, we do not respectively comment on gross margin. But in this instance, we think it's important to point out third quarter normalized gross margin is expected to represent an inflection point as strong productivity gains inclusive of our simplification efforts and July 1 pricing activity across roughly 30% of our U.S. business, primarily in the home and commercial solutions segment, are only partially offset by inflation and fixed cost absorption.

We expect SG&A to be higher on a year-over-year basis in both dollar terms and as a percentage of sales as we increase brand support and invest in frontend capabilities such as consumer and customer understanding, revenue growth management, data analytics and retail execution, among others. Parenthetically, last year's third quarter SG&A was favorably impacted by a meaningful drop in management compensation accruals. Third quarter normalized operating margin is expected to be in the range of 8.5% to 9.4%. While this is admittedly down versus last year, the rate of decline is expected to ease relative to both Q2 and the first half as the structural economics of the business should continue to improve. We forecast interest expense to be substantially higher year-over-year and expect a mid-teens tax rate.

All-in, we're guiding to normalize third quarter earnings per share in the range of $0.20 to $0.24. For the full year, we expect net sales of $8.2 billion to $8.34 billion, driven by core sales decline of 12% to 10%. Normalized operating margin is expected to be 7.8% to 8.2% as we reflect the negative top line flow through and incremental capability investments discussed earlier. Interest expense is forecast to be up slightly versus year ago and the tax team has done some terrific planning work, which should create a sizable tax benefit in the fourth quarter. Assuming that benefit is realized, the full year normalized effective tax rate is expected to be close to zero. Normalized diluted earnings per share are now expected to be $0.80 to $0.90.

Relative to cash, which was our number one priority this year, we continue to anticipate $700 million to $900 million of operating cash flow, inclusive of $95 million to $120 million of cash payments related to Project Phoenix, which remains on track to realize $140 million to $160 million of pre-tax savings this year. The midpoint of our operating cash flow range implies operating cash flow will improve by more than $1 billion year-over-year with free cash flow productivity comfortably above 100%. So with all that said, let's summarize the key takeaways from today's call. First, top line pressures are expected to persist throughout the balance of the year. But as core inflation moderates, trade destocking slows and we cycle against easier comps, we anticipate that our top line results will improve on a relative basis.

Second, we believe the underlying structural economics of the business will improve in the back half behind significant interventions across all facets of the business. In fact, at the midpoint of our guidance range, we expect second half normalized operating margin to expand over 200 basis points versus year ago, and more than 350 basis points versus the first half of this year. Frankly, this would be a good outcome. Since again, using the midpoint of our range, full year net sales are expected to be down approximately $1.2 billion versus last year. Moreover, since we expect inventory to drop by approximately 25% year-over-year and the July 1 price increase that negatively impacted unit volume, one could reasonably assume production volumes will be down this year by 20% to 25%.

Thus, the amount of cost takeout required to hold Newell's gross margin flat, let alone expanded, against this backdrop is not inconsequential and should provide significant positive financial leverage once the macroeconomic environment stabilizes and we begin to see the benefits of the major pivot we are making in our frontend consumer-facing capabilities. Third, the year-over-year increase in operating cash flow is expected to be at least $1 billion, which speaks for itself. Finally, we now have a unified corporate strategy based on a comprehensive companywide capability assessment with very clear where to play and how to win choices. We believe strongly in the strategy and are investing behind it as we move with deliberate speed to unlock the full potential of Newell's portfolio of leading brands.

Operator, if you could, please open the call to questions.

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