Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Christine McCracken with Cleveland Research.
Christine McCracken - Cleveland Research
Hi, good morning.
Bert Alfonso
Hi, Christine, how are you?
Christine McCracken - Cleveland Research
I am well. Thank you. Just in terms of your 2009 guidance, it was a little disappointing relative to your expectations. Is there anything specific that you would call out aside from the obvious cost inflation, challenging environment that was driving that?
Dave West
I think we said it in the June Analyst meeting as well, there is a lot of volatility in the commodity markets, the complex pretty much across the board is up. We expect it is probably be another difficult year, from a commodity standpoint. We know we need to continue to make the investments in the business, both in the U.S. and internationally. So as we do that, while we see growth next year at this point from an earnings per share standpoint, it is just too early for us, given the cost environment to commit anything other than, then again we do not believe we will get into that longer-term range.
Christine McCracken - Cleveland Research
That is not a function of not being able to get sufficient pricing to offset that commodity cost. There is no push back from the retailers that may be making you less confident in your outlook.
Dave West
Right now, we did get good price realization in the second quarter and we are pretty much on track from elasticity modeling standpoint, from what we would have expected right now. So that is about all comment on pricing.
Christine McCracken - Cleveland Research
All right. I leave it there. Thanks.
Bert Alfonso
Thanks, Christine.
Operator
Your next question comes from the line of Eric Katzman with Deutsche Bank.
Eric Katzman - Deutsche Bank
Good morning, everybody.
Dave West
Hi, Eric.
Eric Katzman - Deutsche Bank
My question is going to revolve around the gross margin and then also working capital. I just do not understand how there could be such a change from the last four or five quarters when it seems like most input costs other than dry powdered milk have gone up. Most of the companies in the industry are reporting higher working capital usage due to the flow through of the inputs, and you said inventories were down 117 million. So can you just walk through some of the gives and takes on the gross margin line and what is happening and how that is influencing working capital?
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