Kevin B. Jacobsen
Executive Vice President & Chief Financial Officer at Clorox
Sure. Thanks, Chris, for the question. And let me start with the overall basket of cost increases we're looking at. And as you mentioned, we started the year expecting about $400 million, a little below. We've updated that with this most recent outlook, and we're rolling up to a little bit over $400 million, but generally, still in that area. What hasn't really changed for us is commodity inflation overall. It represents about half that total inflation. While we've seen a little bit of change by item we purchased, the general level of inflation in the commodities is pretty consistent with what we thought about a quarter ago. So no real change there. We've seen a little bit of improvement on resin prices, and then there's a few other areas in chemicals and ag products that have gone a little bit the other way. But puts and takes, but by and large, our commodity inflation expectation is consistent with what we thought earlier this year.
Where we are seeing a little bit higher prices is primarily in logistics, and I'm sure you folks are seeing what's going on with the price of diesel. That's coming in higher than we anticipated. So we revised up a bit our expectation on logistics cost inflation. So we're still operating in generally that $400 million range, but a little bit higher cost we're expecting in logistics for the balance of the year. In terms of how I expect the gross margins to phase going forward, I think this is an important inflection point for us. As you know, margins declined for about five straight quarters given the tremendous cost inflation we're dealing with last year, as you recall, about $800 million worth of cost inflation in the supply chain. We stabilized margins in Q4. They were essentially flat year-over-year. As you saw this most recent quarter, gross margin down about 100 basis points, primarily for the charge we took on the Pine-Sol recall. Excluding that charge, they are generally flat year-over-year again. And we expect to start growing this quarter. As you saw in my prepared remarks, we expect 100 to 200 basis points of margin expansion.
So I think this is an important inflection point. We're getting back now to starting to rebuild margins that we've been working on for a while. I expect that to continue as we move through the balance of this year. As we said, we expect to grow margins about 200 basis points for full year, but I expect that to build starting from Q2 as we move forward. And then your longer-term question, Linda and I and the entire leadership team remain committed to rebuilding margins to pre-pandemic levels. And we said that's going to take a while. It's difficult to predict exactly when we'll be able to achieve that because a lot of that is outside of our control. I feel very good about the things we control, the pricing we're executing, the cost savings program, and our supply chain optimization work is all very much on track. But the reality is, the cost environment continues to be very dynamic.
At some point, I expect cost to roll over. These are cyclical commodities. But it's difficult to know when that will occur. And that will likely either accelerate or delay the time of our margin recovery based on outside events. And then on the cost buckets outside of commodities, when you look at logistics and manufacturing, there are some of those costs that I think will stick. When you look at labor, I expect those costs will continue going forward. But there's other elements, diesel, things of that nature, I do expect also to see come down at some point. And so we'll have to see exactly how that plays out. But what I feel good about is we're starting to make progress on our commitment to start rebuilding margins. That starts for us this quarter. And I would expect that to continue as we move through the year.