CL - Earnings call transcript Q3 2017 | Colgate-Palmolive Company

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Operator

Good day and welcome to today's Colgate-Palmolive Company Third Quarter 2017 Earnings Call. This call is being recorded and is being simulcast live at www.colgatepalmolive.com.

Now for opening remarks, I'd like to turn the call over to the Senior Vice President of Investor Relations, John Faucher. Please go ahead, John.

John Faucher

Thanks, David. to quarter welcome call. release and morning, our earnings third conference Good is President Vice Faucher, Investor This Senior for John Relations.

and and website, available on differ Henning Joining Form Cook, me a all Treasurer. Vice A Today's CFO; This press forward-looking will X President Chairman, website. include on Ian and measures, President Jakobsen, statements. factors the President GAAP and conference Paik, the this identified earnings in that CEO; corresponding the Dennis these and of from morning Vice cause available in Corporate Colgate's Controller; conference are include full to to for Elaine results discussion call discussion measures release Hickey, could the with X and on release will recent release. filings and is financial earnings the included Annual Colgate's differ press including also XX-K our financial from XXXX a the statements. of actual these Tables filings, earnings materially results call SEC press Actual of is Please to reconciliation our statements. SEC, refer and subsequent could non-GAAP most materially including Report those

Ian M. Cook

last jump Thanks. just said did we Ian. thought Thanks, are in we what a be we as call. against give I John. perspective call, would again on you on I This this to would on last, the with is we the on focusing where

and that of focus called we advertising which a a of in and e-commerce while, the continue little but and more would John or we and our consistent some with we toothpaste way the be with across spend; from out areas would on special growth play focus: they full continue retail partners in whether statement. our that we to our hear creative, brands maximize that deployed focus seek spend all high-growth way on local brands income of innovation category on would Asian you'll Naturals in businesses, remember, a You'll to work in and countering would I to summary focus impactful, click; portfolio increase as specific businesses, our that of productivity importantly our aggressively third, with was to guess our brand-building markets; brick pure of and we up going Eurasian to special on the down to that and we more finally, work a productivity. of focus that four and behind would be be us very in

we that example, deploying, XXX% So the start and that in quite is consumer demonstrating media that advertising XXXX, we our see We our advertising let we behind would in create think the the in brand not models brand but this would XXXX comparisons with that advertising. advertising broad focus case, have of the second that and the has increased press and the rather purpose brands. given and deploy half second is we the awareness is and to was be of focused said been proven would array said, our half motivating work acceleration to core our businesses, against we me year, I you've equities, also of behind these across that And consistently and that and just would been and seen term but persuasive would that buy, an enormous indeed of the innovation, represents the increase beating not it we we just would here longer digital. very in and that much the our to of that was We Hill's the that something buy especially which our to millennials. now, but focused that, is to said of substantially, the XX% percentage creative fact over given build spending on between there all a norms per consumption our going in we into, and have the capita digital, for give continue behind a markets. something course and of emerging growing and opportunity globally, people a to is of advertising also XX% testing case range engagement invest And release that working our reference

beginnings we well. of So we we our the we're getting long the the advertising and consumption not think on building is but deployed near invested and on just We our focused that, as term said with advertising on a way have indeed return the term, would. the

say, The second second our the the specifically half, talk as innovation about Naturals to have innovation like but we array toothpaste combating that said, the local of broad brands, innovation, the on and affecting our business, John in on I'd Eurasia. business I was and in as you'll from Asia hear I is particularly

of gone XX% business, a – that very data on innovation was has The India bit Secrets that Russia Nielsen plan early focuses in where our in have so-called to Russian Russia. them in and data Russia on launched been been this that which since proceeding July or that from ground Naturals our launched has centers the launched, have more of a divisions, they actually interpretation has and Scantrack July before, in of points Scantrack and information in of are located building has than it India. some a and about so This us about share a incremental, distribution of little point markets, offerings we interpretation X.X each interpretation and which that our of data. share have from XX.X% been the for different to China on total Ancient overall third was in, allowed from modern is products and X trade XX% the and of And As actually the our the the against in share built given to the earlier major mentioned actually shows we has change July, tailor Naturals up Naturals we market, in China. example,

encouraging our investment read, days, start the to but Russia an Secrets in share early obviously Ancient yet innovation. first So that come considerable behind and with

We the markets across have the interpretation an across and of of Central in Eurasia, Asian by all year, launched beginning of of end Naturals will by fully quarter. principal all launched the first our will we Asia of the be

good So some progress.

indications little about would bit in something You'll for more will hear suggest Europe, a us. but positive be early Naturals

the States, working discounters which developed collaboration toothpaste, China packaged inside, approaches been a mom-and-pops which very Colgate drive when purchasing oral product. a our of on-the-ground business the the national in Love and a launched particular in it One growth brands. our to Colgate different Chinese heart-shaped whether held to the to working have our capability we to one e-commerce, And China, has top-selling to customers manage clear continue do in annually e-commerce we're Teeth launch product recent Max on statement within Dare It from a a of in in a with or launch, except see is focus partners e-commerce The Colgate significant seen, local in store Europe, growth was with The Day, China with this course, using in forever. health like in in retail of everywhere, and strips toothpaste, consumers that since e-commerce breath awareness yes, a a Fresh our capture marketplace in sponsor To full China partners. tube, Love can with It item as Colgate Love September. we, toothpaste an business, It's has we has is would drive so it's e-commerce. potential in months. Dare e-commerce course, team we cash-and-carry that strips profitable And five separate acceleration campaign to inside, of different of toothpaste, the between India, e-tailer compete, approach on around, our Brazil, in site. approach. and of third, then, will to this our the invest flagship e-commerce income breath give else, – categories went or and I channels on example specialty in with pink that, United idea which to in the grow all since we're pet toothpaste

expansion put that question, the it was about there. quarter We our very negative right finally, worldwide lot are a wait we of year. focus not e-commerce that let another points price saw distribution you We've same quarter, quarter of the made pace productivity, so that quarter. the in program. know, The we do And And rather just good thinking year around a XX.X%. one prior focus progress the of in margin basis we, on this funding-the-growth maintaining shows as but as than in profit And, gross from example, holistically, year-to-date third is XX for our this funding-the-growth, just e-commerce lot comment. me So roll-forward now and got gains rapid fact, second channel. business third productivity

fats were and Our but of maintaining Texas. our a funding-the-growth at where delivered the from to second curve we the that moved being and year. oils both a the usual have and funding-the-growth XXX and in basis which resins volatile for that balance continue resins, saw basis quarter, with to points And points, And expect traces end the where across favorable, was negative in of the and impact oils XXX price we affected headwind fats half, negatively of second event weather largely differently transaction. by material the to no marketplace, the builds of we the and year,

those extreme secondly, Colgate profit net in we of we then a came (XX:XX) gross the beyond. the this last and, more Global talked year and the morning, second in was program Growth on Program and margin the had streamlining and our And Program about structural to and functions, and on our into flat investment for hubs for projects our from real advertising way you of Efficiency when continue you've And report. to Growth and optimizing quarter our the support of So our focus our seen global expand our as incremental services Global Program, with two chain, and and balance see successful implementation year-on-year. same our focus cost commercial to-date, our announcement importantly, global this we pace growth of facilities on opportunity earnings in Efficiency the building included as Global Efficiency with supply extending XXXX Growth business off, XXXX,

we of on John. report hand those the are will were fact back the let said continue back and focus, to quick that to and a me be, they our now So areas call

John Faucher

some with on with by start on of for will will finish off before quarter I followed general our detail I outlook Ian. on it some fourth Thanks, performance. further questions. XXXX up commentary color the the divisional opening then quarter, for

will call As at our on that on outlook Ian XXXX category quarter the a January. more This a mentioned back will in conference September give color of growth. discuss reminder, our us trajectory fourth we earnings in

first first said quarter, Net year. and X.X% a in improvement press half with improvement volume the release, versus growth, in up the were foreign X.X% a QX was X.X% in versus quarter showed third exchange growth sales the the the X% As benefit. pricing XXXX, the sales of of third Ian the year. the versus quarter sequential Organic half flat

we in one of versus quarter, the third the divisions. in in second every sequential improvement our quarter volume Importantly, showed

experienced favorable foreign in we are the of benefit We encouraged turned third first quarter, the on since quarter also the exchange for top time from as that XXXX. foreign exchange a balance, line

in GAAP Although gross quarter, volatile. and better, is Brazil, U.S., remain modestly profit offset important as marketplace In consumer and year-over-year and raw was XXX underlying slightly the and and geographies, a the operating categories the was QX. third which Global higher that including pricing no in our in points quarter. of category Europe, On Efficiency funding-the-growth quarter, trends Ian down flat of points that from profit There savings was basis margin a Asia. We impact improving slowly the basis, our the believe we growth margin XX improved rates do costs. outlook parts benefit the are material was GAAP Program. strong the excluding our our year-over-year basis On several mentioned, basis, in Growth year-over-year delivered down

margin sale in Excluding matter, on our and in and XXX Program, operating basis Global previously by land XXX of profit increase the primarily driven disclosed Mexico, of a a gain impact advertising Growth litigation investment. a down Efficiency basis our was point points,

comparisons throughout advertising have half year We the year. consistent be discussed would the and a second of rate year-over-year more that we'd investing be the particularly all the in that in year, at notable

was division. year-over-year approximately up was quarter year-over-year Our every and advertising in in up the investment XX%

increase share expecting was in bigger an year-over-year On in year-over-year. the GAAP even fourth are a of per diluted We $X.XX XX% advertising earnings basis, quarter. down

Excluding and the previously at diluted mentioned earnings per and benefits $X.XX. Global one-time disclosed was previously of Efficiency from Program, our share impact the Growth year-over-year flat matters, tax items,

We share three to This have $X.X the through versus billion quarters returned of than increase is year-to-date XXXX. an through shareholders first more dividends. and repurchase QX X%

was the half were foreign by in Category divisions. sales premium Now in In quarter, growth with majority minus our moving growth our driven The the we improvement in fairly We'll volume, exchange. in in share and sales America. U.S. sequential Care, year-to-date. negative. now organic and market sequentially first QX, growth in a categories of broad toothpaste the versus positive of toothbrushes based, X%, organic Maine whitening gained versus the in we've second with territory as share in continues to to our year-to-date maintained slight Oral were growth category when and North slightly X.X% of leadership the White off volume sales White Net categories franchises. U.S. rates for favorable Tom's area of we priced North America. start Colgate with X% improved strength down the saw net Luminous the be Optic quarter In sales us, improvement and segment an behind The

in this Our and data not improved strength sales by and syndicated driven e-commerce. covered club channels by providers quarter,

as to we strong optimize to our cleaning portfolio. look promotional e-commerce strategies market saw Home digital our in gains In we in our share. see and to continue marketing Care We drive business, household growth

improved hand While dish our did the we category are sequentially line, still our versus trends as third seeing trends. in sales quarter the in weakness second

is needs believe call, not making said do business be, where but we it to As on are we progress. the the QX we yet

by we'll solid Now, in growth the America. Latin of driven look net sales America growth. volume quarter, and pricing Latin at delivered X.X% combination a

exchange Foreign quarter. was the by favorable in X%

points our than toothpaste, division was broad growth to XXXX. significantly volume growth strong advertising in for the Mexico more based across to plus XXX slightly, growth. X% down showing investment Latin the of we since division, growth, with Our but QX allowed The us strong the was volume profit most in continued hubs share volume see was which basis gross to year-over-year delivered market increase division. year-over-year XX%. highest growth the America our also of

there Our team excellent Colgate did QX. with impact Mexico an job dealing the of the in devastating earthquakes

focused after Puerto right thoughts Our aftermath. are helping and them communities deal Maria, teams Rico with and to they continue rebuild with Hurricane now as the Caribbean our on are

in of we a While more have was QX impact on notable the America. Latin results impact our modest, will Maria it divisional QX results Hurricane on expect

the continued business Brazilian encouraged in quarter. the by are We improvement our in

in-store activity volatile, While we launches, the advertising. effective product remains behind market and grew volume new increased

Mexico, toothpaste product Protex starts products Xtra Action we forward, QX, Mouthwash body Brazil, Total Pro toothpaste our enhance launched bar from Going base to continue soap and recent business. we wash. benefit strong in will saw In In new Freshness launches. Latin our from business several to several American Hidrata including launched Triple and Colgate

quarter. to were pricing up in the Europe growth, quarter. driven X% Europe, with in grew Moving volume sales X%, negative the Organic net X.X% by sales

and was of European across was – the particularly and strength Foreign division the quarter volume there. were all in working meridol. to rebuilding quarter. market the Colgate, growth volume volume our the elmex still exchange all by the across with Oral we're hubs. We of shares The in driver the three division and growth in toothpaste key growth based brands across by net on growth was return broad Care France, our in favorable sales X.X% with pleased

initially quarter. We launch to line incremental market are repeat very plan our expected. geographies into forward. this than expectations several more of pleased initial is in Naturals of with markets the in proving new with the results Colgate and We rates our during shares going is achieving continue Europe ahead expanding Naturals high

and to We gains Gourmet especially also Sanex antiperspirant Care categories, continues new benefit of market Personal Care expect to drive highly and Zero% deodorant. across Palmolive line, our Personal our body business multiple variants our successful share two wash from line

Pacific. flat Asia flat. plus X.X%, the while quarter, Asia were were organic sales and in were Net the Next, in Pacific sales Both slightly pricing up in volume quarter.

was Australia first exchange Foreign QX. India was by We a and sales growth sequentially quarter. trends third. favorable half year. by impacted of the to beginning volume be improved Services encouraged The was slightly in from the and continued by China the growth by return China offset growth in in at in to in QX declines The e-commerce were the to implementation of India. quarter the second Tax while business, weakness the the volume very Greater volume Volume our after the driven in of brick-and-mortar during Greater Goods

As and in sub-Saharan of second entry improving channel our expect in the should reported quarters. changes in division high-end of X.X% Indian the in to our the impact launch a net The sales a discussed by volume quarter the distributor advertising as decline India toothpaste, key weakness primarily in continues African investment over increases referred earlier. company press be significant driven quarter Vedshakti The the release, growth that foreign they Naturals the QX trends in the Africa/Eurasia seen volume. exchange recent Ian favorable recovery business. and growing improvement pricing sequentially to offset gradual of course Colgate with in benefit segment Swarna the in coming fiscal also continued wholesale they of have and from their

Middle segment. in points, price of have by volume quarter, a our also Ancient We we difficult toothpaste seen posted driven adjustment environment. in business Naturals highlighted As promotional and line Russia the other companies of in-store in in businesses, a activity, our to the launch economic growth Secrets Colgate have due their East for slowdown the

As X% business the quarter, benefit in the support continues we we growth will drive while by continued And our sub-Saharan our benefit our product volume be fourth Africa/Eurasia our our in distributor for up African Middle with do to investment finish from strong to headwinds The changes was investment. the including year U.S. beneficiary a ago look net Along increase a major Hill's flat from expect have quarter, capita growth, at lapping third behind new launches, strong with exchange. we period, the we'll consumption. business. East pricing initiatives advertising X% a e-commerce. and from in X% raised foreign toothpaste with business growth Hill's. also delivered per the growth sales volume in driven of

Our volume United international sales promotional We've driven specialty business saw our region and Japan. States, for every in performance net improvement in pet sequential except the by in growth activity. seen improved

shelf the in should resets a Over we few further superstores. quarters, next from pet benefit see

We and campaign about and effects Diet This continue the and supporting to advertising dogs, to X launch product. be Youthful cats help performance product our Science digital dogs years older of helps a and in with Vitality enthusiastic meaningful older. aging cats older adopted. of the the We're fight get

older Youthful Animal Planet with working Science which Vitality stories heartwarming dogs. about web Adoptable, the series, Specifically, cats Mission tells is and Diet on

for outlook our to turn we'll XXXX. Now,

we expect low-single-digit both As continue stated rate increase the for press in year. a and net sales our sales organic to to at release,

to expansion basis to margin margin end basis, points to raw year outlook expect in material be digits. benefit we our XXX our digits. QX from versus expect our earnings expectations expect On the this versus share XX mid-single lower now of is pricing. range low-single-digit our guidance higher the basis, This our EPS a third growth. of mid-single basis, previous a reduction in XX quarter GAAP per to gross the down down results earnings our a range. non-GAAP due still be GAAP gross quarter, to low- On are second for share we of our a we to of outlook for costs be points On combination basis less year we XX the our will Given in per maintaining and

Program Efficiency with flat charges from it share Excluding be one-time we items, to for questions. that, expect would earnings up QX Global and the other Growth and And we'll per year-over-year. roughly open

Operator

our with from take question we'll Citi And you. Nicholson Wendy first Thank Research.

Wendy C. Nicholson

morning. good Hi,

Ian M. Cook

Good morning, Wendy.

Wendy C. Nicholson

in expansion the your more in quarter we've significant can into to philosophical a step-up still you despite balanced in spend, well Hi. we below see in do want contraction in be some in get My growth maybe sales the much up, the to the and spend, know guidance, coming market growth you spending, got margin quarter environment. your question business. on, to hey, term have a a And as the outlook in kind third message so organic to because of general I term. than to longer to for Great But long in where with operating year, just new margin don't rate. fact look hey, and a your of sequential more where the give favorable shares need has we but Thanks. exchange is seen touch is XXXX or see hey, you growth managers much think too market we've because the foreign I shares directionally that markets, saw you spend, improvement can't remember

Ian M. Cook

That one question, Okay. Wendy. very was long

time. benefit we oils, in commodity particularly John said, quarter. higher long didn't time in the it and a quarter to quarter first through the was highlight than margin in the particularly get I and from the react pieces. point in notwithstanding, to on was made, trying no to So transaction to I in roll headwind The went you And expected resins. underlying that for as point the There reason exactly pricing there mentioned, third pressure, is forward fats as

our perhaps similar facing know, contract, composition in gross quarter this Now, in you particular their business. many of a saw space as margins

our markets, the about expansion excess is for running to which the our program. of of underlying business. growth market rate in about think this not back which specific the to think – in growing invest XXXX in and in consumption going forward guidance money – traces about middle how per it's capita we class, the and we as We business So of we think the is the do emerging we why population particularly building categories, more

growth, faster of view, of as spend than categories, pickup rate some by not in and that on in it But our the at about some is why know, we So market growth the that we're as country-specific well think costs. well. thereby all our slightly encouraged we growing make progress share category you is assuming

could the margin, company, part times, we announce can couple margin, We cost terms us of now which and a that for our the we little bit line together equities expansion of take and in in to that are a efficient a gross the balanced a expansion as to all SAP and our levels our gives volatile order and our in we which grow appropriate of balance the structure see thinking a us, that is is of that And innovation. Centers, growth, many years, in that we've the we so secure addition Service announcement, of move enterprise, I gross can that of with more in are began reasonable the And across next continued to a with Colgate the we we our us we our you the have time, see forward maintain build advertising brand structure, fashion we look a back, these environment a extra as in saving. speed focused we're think in journey savings structurally years would on for focus technology very been peers at over in gross volatile charge But return. several margin of between and hubs, environment. deliver in, to structural we and top cost, much give the of binds leading the felt think that's why that because

Operator

Next, with we to Jason Sachs. will go English Goldman

Jason English

folks. for allowing Thank to me question. you Hey, ask a good morning,

Ian M. Cook

Good morning.

Jason English

we pull a about threads deeper. bit if little Mr. wanted I out talked and a see couple that go Faucher to can of

innovation, pricing of And First, then part maybe that is a driving the what growth, little pricing factors out, it lots in of meat also think driving underlying give yet some under of the that do predominantly you he pushing pressure? pressure, a costs. bone the more us the contributing are on we markets. to saw about in premium how enduring of quarter guidance in the and less those margins for some the of pricing it, I'm emerge I'm reset a be many attributable at pressure conversation out business. couple the some to same of lot of XXXX. trying may of health the to obviously, terms premium as of trying tease pricing think about And a on future. not underlying that, bit just premiumization sounded And first, natural – despite expound this on innovation Can time about to expectation like, dichotomy mix we of you're higher talked but you a of think

Ian M. Cook

and we because happy they're have we space, consumer we the margin we the before a a of entire markets that a words, and our value say, across and comment, from innovation, that in instead bandwidth full well, as we Faucher be yeah, time, innovations, make rural the premium, with portfolio, – the an the questions. a innovation innovation into these point that – even point whenever good in pay now price said bias capture and Mr. across which we as of Yeah, to compete always dig operate we to think remark. sure we is But view, same move emerging of to premium. you Naturals pleased think on to I a emerging accretive view. are markets, other as of And we of can't to tubes, Naturals we make at way, it packaging gross in innovation when to that the would Look, for see to and deliver we the the make ties from forms can the do if point all the occasion, sachets consumer in in of business, it I'll and, innovate points, innovation have of consumer. have in we that make

but So, where the premium we portfolio innovation. always even yes, full consumer to the and full if portfolio a to more that forget we we're value, talk across that never we the premium innovating end sees bias have fact a

you did Program, Growth Europe. third to years, going had story. started seen to Europe, you pricing, be continue which of Europe would quarter, we and Efficiency guess different bit under many of as when kind America, European the is that which this see. any pressure I unlikely underlying to is we And a and concluded pricing see have the remember, is and you matter in we given that may a pressured it we category strategy that structure that the is in been growth why first a expect soon, North pricing factors. saw turn at Now, for the and you has decline of little with we Global a of because One when many, time change couple look conditions is market quarter, we'll

is heightened in factors make make the activity dish, extent business, going impacted to would our a were in Number hand Care And promotional which, also heightened and on, going be progress You I I second on that by case, said competitive businesses, last our particularly certain to of promotional liquid activity, have in the we to the call in continue adjustments to the on would one a softeners couple pricing Home been and that which soap some businesses. had in say, order we quarter. dish think.

on back points pressure would the augurs we retail we Home the ease would consumption ability we clearly will And, say I rather relation you promotional price the building the we this building on to an the right in the I transaction to markets, that which in that take in continue is beginning the to we're and we to behind U.S., focus where impact. put And promotional basis, cost intensity getting on pricing the investment, data so future. see And have that pleased because in weekly I'm specific seen of eases, say advertising the much finally as and have think do, a and of promotion. done past those Care, to brand track have we for easing in monthly important. obviously, put as areas channels to pricing as our emerging that trend well that

I assured I expect can cost our be so seriously can of direct of that those you kind pricing the as well, think a we commodity same type in that consider plans. markets, think, for doing would future in you increase

Operator

Teixeira Andrea And we'll next JPMorgan. from from question move to our

Andrea F. Teixeira

within you. the as Thank the question is and the for with third morning. promotional in quarter. good got regarding you if North American in spending the progressed traction spending advertisement Hi, sales you more cadence My And quarter.

sales destocking planning the other if that to also out if – in where find potentially the I buildup, see can quarter the for buildup, with some was you. you So particularly in words, organic across Thank the last lift any quarter the with last trying in areas and of had year. you that mean, I positive fourth the or you're into board there was was

Ian M. Cook

track inventory destocking we not Yeah, year. third did destocking we see well. quarter. levels came the in some trade obviously We any have I We think this into as did

think, by broad if in in mentioned we the increase actually rates nonetheless growth States. category in prepared were his remarks, John I quite as but based, the United pleased modest

quarter, have now favorable seen, seen the would first the retail of quarter sequential if category a appropriate our that channels, we and the said for Care but be this little continue in year. necessarily more from pricing have in have earlier question, Home I progress you the pickup North response course, to we have America growth As as the we competitive the rates made seen, businesses bit in clearly

So I be the behind would underlying us, against say categories out growth the regard. to nothing The call we're that exceptional seem building to inventory going and would forward. in destocking in

Operator

with we'll next Bonnie Wells And go Fargo. to Herzog

Bonnie L. Herzog

thank right, All you. morning. Good

Ian M. Cook

Good morning, Bonnie.

Bonnie L. Herzog

your have Growth Efficiency Hi. on a question I Global Program. and

your And against you're I be the gross up it, tough if guess business extended way QX, that any guys might wondering that decision to offset benefit aggressive in to by more especially you're that future then already implies you you've that started margin are since another in on begin margins might I'm that this any encouraging Thanks. pressures in it's expecting think more need compare? there fundamental I While cost projects cutting.

Ian M. Cook

those rationalizing Growth long you're answer focused for that Service the and through our is been since the Global all more had the that further Business efficiency have Colgate have we been thread the company see hubs we the thus opportunity on based the have, intently building together began done is further has SAP fact And I the across ties we on the Yeah. and And time. can technology manufacturing Program commercial Efficiency program, seeing more we what facilities. our we far. that Centers the the we guess that speed of on success a and other through expansion and generate these on

developed So last learning the rather we over It's several more building reaction it's anything. not to in that the years. on have

yes, point turn looking to around we're of that Now, savings. a business from view, the pure for

last several ideas that Every go and we can had initiatives things, more speed looking More this over it some been one years. the these volatile our into on more what things in as you does that you learning all building the was have get into deploying it get these a in give go world, of importantly, more as And truly we but minds, we time protection, more after. it with efficiency. learned we're spawns of thought you didn't the and for downside and you

reactive would to wasn't gloomy future. I a more was say So it It proactive.

Operator

Next we'll Jason go Gere to Capital KeyBanc with Markets.

Jason M. Gere

here a mix geographies a to trying softer either Good about thanks. doing we're tuck-in talk morning. exiting seeing in maybe or different environment, a guess to bit. don't portfolio lot strategically little the I In make businesses wanted fix sense of Okay, that companies the I acquisitions.

So out bit talk of next some seems can kind about new structure just to the with little you Are prune a maybe the leaner over to sheet out be few maybe some the balance leverage portfolio? about there, you to you Can categories that the a areas your mix cost the that there prestigious what environment, more years? add and guys then here maybe disruptors actually are and changing there. of we about that's talk locals hear the and

Ian M. Cook

in and and categories capita question, and good strategic. Very Care, a therefore well engagement, know, consumption gross all in building Jason. as that are is of dynamics loyalty If step order, we therefore programs back have the underlying I we I Pet, favorable programs in have the order, on terms education I that back Home that the per margin order, potential in Oral pricing, very the on Care Personal, we toothpaste. favorable emotional Yeah, think, in that because are growth a take you and full way the in the sharp And have portfolio categories you today, portfolio, that priority consumer order. favorable bring to focus

four portfolio the prioritize we have do. the clear and them categories the looking we time, the we premium those time within we have way It's having that segments. accentuate to So very our we kids. have focus, like we're despite to of even today, within obviously segments, end a from done Disposals, fact

the our and that's case You from any view. first with the Care don't of Home point than love the fourth less three,

I – divested was probably the over tactically business example and put a have for business we a bleach it the last bleach as the We our where think Latin home better acquirer, of with America Clorox years Colgate. than

things might see? small one there are that Maybe. that like So

quite a be broadly, always or customary And discipline against the one. financial in as have of study We outside, against lot view. even the on technology whether good whether demonstrated We one is buying it in brands, attention of quite it be have we put put companies, about idea past. Your that. we think a we again, it It's our that.

assumption balance work which well feeling little done that an And financials different a volatile the been buyer, GABA, bit if Sanex perhaps candidate be on and You're pressure very home, flexibility. these the in of was out, we us. was and we attractive, the times, all a looking have sheet right, for a and external of we do willing with would would as have for Tom's have

brand right at technology, price. answer saw the absolutely, is, the So business the right

Operator

go Grundy with we'll next And to Kevin Jefferies.

Kevin Grundy

Thanks, good morning.

Ian M. Cook

Good morning, Kevin.

Kevin Grundy

surprising you're and spending level like spending, of to of questions appropriate context, been longer topic wanted and trade the in for in ad guess John And spend quarter, the in it'll cycling a I leaning where now was back fourth ad advertising advertising following a sales. number the at not sub-XX%. in And calls the the on spending I sales again of there's striking company past the a on again a as and spending given total more in bit the balance come ad spending right seems what on percent of couple these years but up of term. to is you're low as a between discussions be that's percent my mentioned historically it

do give in today, environment? several the not know with you sales look just we still it as a you prepared I is that of question are the you're So higher little ad you. of spending move XX% but current or within to years, the at north because comfortable guidance not think next needs XXXX Thank to that

Ian M. Cook

savage come the spending. back that advertising exchange with the do moves one court not the we of foreign we savage, work strategy advertising foreign sharp and fact to change over the this made balance think that to at reason the year coming a extremely doesn't beginning the between couple year do to is made is Yeah, into in indeed retail the a resort has we we years and at in all, last the to that of what sometimes a to I do. statement the That made matter offset that as have we we move what traditional premise, exchange. this and wanted promotion were of and And had we reduced statement last we that's what commercial as

level. our build level we as a it go build it country. plan. advertising. it in would the have build rolls against off advertising level that say the when country. advertising, of this business We of by at we a we So I we healthy build brand it And by forward, corporate is year We

I awareness, And more for more world, ROIs is sure advertising advertising. into the a seeing be year, period of long are competitive of in think what moving economies. we're advertising that some you're would have potential the there the own spend the its always as traditional air digital, any be we're we the the And to would activity and building to good shift by to this talk we be. forward marketer, from on context getting, of a to time the of brings continued course, you particular which make we adequacy driven in If

shorthand be appropriate does the I to going we mentioned but undervalue always think, the and by be, two would answer in that be way what year we'll forward we this So the the things not working little bit a but earlier, our guided investments. at of good for any business, spending of we'd do retail, balance and level is, power those

Operator

Ali Bernstein. Dibadj Next with to go we'll

Ali Dibadj

Hey, guys.

Sorry if missed... I

Ian M. Cook

Hey Ali.

Ali Dibadj

I that? two more And Hey, I Faucher then could, have guess savings. charges the missed organic could if just sales productivity point at good. sorry if John if QX higher from the you margin gave can greater it's like what if talk it's more return little into about or extending like an turn perhaps one-time one so return doing And other of But the mean accounting a perspective. what program you're here. of business kind you've extension, you're extension noticed far, in to much i.e. question, but contemplating on from questions. what number purely here, question, but that clearly perspective, And as but less time? it's recurring I guidance is that then as you any, regular opposed well, you do cost bit Dennis by also as We appropriate, if charges, the or XXs-percent, And see just I on so for jump Hickey the a divide XX% I the much versus don't been that to your more so words savings a we charges, than in

does does indeed happened much it it the of what than don't is has and one of the – questions, far, reactionary. So earlier Growth feel nature like Global so the nature the feels aggressive, more actually perhaps to Efficiency actually feel the like extension know. of I it different so

feel it as but way. count certainly of profile. Thanks. more wasn't would your well. But it that it feels focused said that of love obviously And given would that type return head interpretation You

Ian M. Cook

Well, there, period. let was start can it. all, not given left you have where me Everyone at Ali. Thanks, view. their It reactionary

the the it think been process has and the the organization gone thing I have I you to part and then tried focusing earlier, in important say opportunity to the learning simplify do we say, in has been to as have areas we simplify on, with needed through to what one it. technology do

for built built a as have required us management to and been So in structure focus rate return, the Program, Growth impact areas delayer the we to Efficiency infrastructure, the capability. of the to against SG&A many we lot an building is quality. allowing more in way of without Global have any operate a higher reason of This a

for planned had planned had. learning and the based on we entirely for So

external the give the from you an same aspect of on didn't view, And point as we the didn't detail believe before. activities Ali, and do program, fourth kinds themes with discrete the top it. a this We are from assured view, these point some through focused quarter have are from and view, programs. of productivity of with of guidance. And that we comforted in technical we obviously that as these auditors financial we indeed point and On line one-time no, have always been been miss a of our a in legal company

Operator

to Dara go Morgan we'll Mohsenian next And Stanley. with Okay.

Dara W. Mohsenian

morning. good Hey,

Ian M. Cook

Hey, Dara.

Dara W. Mohsenian

get hoping was that of the of review to John commentary the more world around a besides category of I some growth So made.

for to First, we're And that consumer. a pickup sequentially slight the of in category the terms growth, mention in should theoretically seem in category did trends you indicators that weak macro be fit pretty year-over-year favorable growth. seeing U.S., still but with doesn't

if a a in temporary second, hearing weakness, So what's we're it's or There pickup continues of general U.S. and are so recover number some look macro view as about you of to term Thanks. pickup forward. initial And more comfortable the category going driving category favorable, you've emerging seem XXXX? think from markets the that seeing and markets. you I'd emerging and companies to get indicators are we then in longer and you generally this slight if out growth QX and a seen on your builds love similar question in signs CPG that

Ian M. Cook

good we're obviously questions, focused yeah, one on. extremely Yeah, and

we very And when the saw yes, of with said, we way about next So, you to as in January all, we of in said very, market-by-market as that we this things this couple pleased, what we we as carefully we one months earlier, track of is in want upticks the in informed order categories. terms talk can that we the our were as John with see talk over quarter.

still build the we looking America. seeing X% a developed and are back at world, depending the North clearly see If Europe look modestly little around them the still our in emerging markets strengthen. have flat what on shoots seen, world, is between in rates to continue take you you growing digits, geography. growth and and we and to category basically you step to those X%, Again, green macro mid-single up the are see And

in don't brushing see done, see that changing because consumer of way. any As some in will behavior in data don't of terms and our teeth I any think is bespoke adjust said the we we any we we've of before, indication their this research

saying The were in can January. closely We'll improvement. point be from still, be very, informed are we very as where they So a this a and view, we before. have an bit little as of macros watching category been of

Operator

RBC go we'll Capital next to And Nik Modi Markets. with

Nik Modi

been it comments seems be like I any looks of and any your going thoughts And debates could because this just And in Colgate year of where two. I in the us is to get period there cost can morning of obviously wanted your business category, across like I the the across of I we companies but it a or Thanks, structurally. of vein that challenge time on in doing market, up pace innovation on the guess keep question more I and last the pressure chain, could market, be et more it's channel that changes local best-in-class putting most mix, ask one but local that et which with Ian, – lot Yeah. think technology, cetera, going on competition, everyone. think of good to the are a in consumer the cetera. agree local supply is

So on industry broadly, just at wanted a your look I as your that the thoughts get to and business you whole. as

Ian M. Cook

abandon It's At Nik. of guess and change. ground to to level, a it. that's way best volatility, say strike, surprise. weather and gay great never thanks, the with Well, time you complete which Yeah. patterns I of all the country-by-country seem mind shock have this

of full you to for more that get you're serve, e-commerce more the the got the advantage on that make agile you make and you other business. price, way But to companies business. provide I consumers and those fundamentally sell can take slowdown on consumers, resistance to themselves, we point how I those time. you're down in nowhere ultimately it of enormous cost over the companies, the technology, company over areas, doing companies comes with In to and it, if engage from it, navigate and to the a the in dealing from will be which there's move yourselves to with you their on consumer think view, with which change change change sure picture sense, the consumers. constant the is brands brands quarters in buffeting then along, seem going a and and its the you relevant you think how true doesn't And And an Indeed, general categories, is and hand, buy pushes in one to that role of those that stay change you've big sell and of come transitory efficient and digital of consumers and lot right remain how from some business indeed and/or So it doing of you choosing structural broadest time. with the to engaging is engage run with as otherwise. and think is cost, to and organize products they to CPG of you going to mastery how consumers

business I a change a will it to of conclusion see don't over as a a do as I see challenge, you So become costs that necessity that's different time, have God-given but it forever must How but thing. headwind.

Operator

Okay.

absence, the to, because and being that just so number stem take you're am you are innovation at the to - are share go market question. Levy try to much Caroline I Asia on some didn't comment Caroline and it the Next including only you something in by route? of markets this (USA), sort I'm or seems with so Thanks I'm one, a just Inc. looking of players? lost for Macquarie. their that you China and And market shares, like and them going Levy that you to point right we'll Macquarie India, on a U.S., Brazil, trying France, And you the local just losing at UK, media Capital up? lot to rollback price can willing is

Ian M. Cook

different, some is The volume In Brazil, different. pressure. a pricing go through right. growing view. on by share to we've markets, You're of the business very of been that response and the seen a therefore from are protect kind of frankly, reasons margin market. we have and point some point usually view focused I'll

is where bit progress. still have that build we're prior it's so north making of the Mexico, little up, share to expect choices is made XX%. going the Our forward. market a but we damn north marketplace year-to-date of It share going XX% still there than with and year, frankly, and we're pleased market weaker is a we're

reason. You a come was France to France, customer

the back country, We building share, course and, share. and the now affects that and both European distribution the customer given share with France, size in the more and that of affects importantly, in of national are it sales

actually the that of share China, our process volume flat. So, In rebuilding. in is year-to-date is

distribution at the which because Our Naturals taking The yet end the local the And I two seeking premium a full high is the distribution, that it's story the reason value is Vedshakti, now counter in and advantage offset. in is earlier it's of as to mentioned And we is category, building in local Naturals we growth which building this and brands. share plan just again similar mentioned, is what including is year-to-date that our John on are category, is Colgate down. to of brands. the India, not have one down of offering

answers. but States. U.S. those share of flat, the essentially The answer the and lead to by be we would still tried is the actually I've geographies, So each in United

no there. there's So issue share

Operator

Okay.

Next we'll Chappell to Robinson go Bill with SunTrust Humphrey.

William B. Chappell

Good Thanks. morning.

Ian M. Cook

Bill. Hey,

William B. Chappell

a forward. looking buzz Just commodities the quarter and of on in question the kind

think total you way was headwind. much was XXX of I a of kind that Any in of to how a extraordinary. point said kind basis it surprise or quantify

you quarter, how of back You these it quarter fourth talked of or is in to drag play just end? kind in into far expect terms that into kind about do things resin XXXX fourth lasting costs, of the

Ian M. Cook

for at perhaps guided way The the second and we be thought but since year, lingering balance have I the would Candidly, have the longer on expected. the we seems than and quarter, of surprising, we Bill, that they to were totally And of think for the out reversed. not resins, oils coming down time. fats

point certainly a think XXXX change we're view, into got from a assuming be on may So haven't little a yet, of bit. fourth for And they fair assumption eyesight a no drift planning the we I quarter. whilst data would that

Operator

Astrachan Stifel. we'll with next to And Mark go Okay.

Mark Stiefel Astrachan

Yeah, wanted about... thanks I in. to for ask squeezing me

Ian M. Cook

Mark. Hey,

Mark Stiefel Astrachan

to high-single-digit-type that and putting a you about contrasting overlapping what who been Ian. when big to you competition what's with ask of sales bit know growth very growth brand. I up Hey, the relative have there GSK, how like on or a about can Naturals, factor share is I there, or sort multinationals talk performance think be contributing wanted local biggest about of

guess about relative I with terms you mentioned? how Naturals natural I positioning on how piece, think stood about what contributing do think of it's for? the consumer And and the So a to it of historically it brand in you what Colgate what vis-à-vis is just acceptance do

Ian M. Cook

in GSK has a long time. the competitor for we the the lead sensitivity-based a in Yeah. It's Obviously is But a questions space, been Mark. don't again, build Well, one we segment thinks the lot clearly in of there, a brand. segment in of market-by-market. technology, dentist-by-dentist, when thing. is we a world, with and are that's looking may but and everybody same it say although terrific have be the something, you to But the trouble Naturals, not Naturals

So say United you might say we States, Naturals, in the Tom's.

Naturals it's in to an of India, You it. got Ayurveda translate twist more

take different in ingredients, Russia transfer it's again. it you China, and and something it's You different got it to

local Naturals yes, is by So, but created brands. that's made trend different which been market-by-market. point, But includes these why brands, the we of some of the this hasn't it's local general

– groups So the thing. they of whether conceptual, – that to on tailor be a color be be some tastes a and build flavor, thing, to they the innovation of having very tricky products is, complex it is interesting color say, natural you ground local thing those offering shall specific they we helping a and

trusted Colgate take worldwide country. brand, is have brands, in been XX and indeed Colgate and As is brand years, one the definition India, for its we names, most the there Colgate, a of family to Colgate, in broadest

the companion American early So before entry means in established Colgate into that culture. many has the long these markets competitors been brand Colgate's our emerging of

for in and there's a very the country, country, you brand in is people and combining talking interpreted between the Naturals brand. no offering familiar by concept trusted clash the people start about so So Colgate

Operator

to go Lieberman Lauren we'll Next with Barclays.

Lauren Rae Lieberman

morning. Good you. Thank

Ian M. Cook

Hey, Lauren.

Lauren Rae Lieberman

to Hill's, it's before on it pretty think in just so was And pricing and to I One was rare things. see that, XXXX, had then go back price to no in the XXXX. Hill's. Two cuts I

club, sort of for a also in strategy distribution of gone was (XX:XX:XX) with more kind was talk funding promotional terms diversified just what's on I Is know pricing. your little I bit one. of on Hill's. second That it curious, just there? to some pricing In of footprint you with anything more quarter soaps. of And going or gross you I we America, So some about net to then e-commerce was North if mentioned activity you. kind the of about how that Personal and that competitive in think the if you've was forward. Care and Thank looked Care in saw promotional had Home pressure the like in also wondering this outsized But growth that's and should contributing it the

Ian M. Cook

is of than liquid I that it the mix true, channels we're tends slightly non-Nielsen lower The we so a the States have Lauren. the And Yeah. is ebbing and is the But activity, as seeing met. factor, United that which and the pricing channels, rest the Care contributory latest Home in soap mentioned, to other the shows predominant and slightly. promotional information have

answer not that's the America. factor. that's on North a E-commerce, So, no,

part the retailers, most the year, lot the of the of a pricing as strong introductory in going two, For quarter had brand, the activity we Hill's, of price, specialty re-engaging it that one Hill's with and with on – be know last the reestablish to as couponing in specialty and have so and/or into gets targeted otherwise, U.S. you retailers. was largely couponing that reestablishment translated

Operator

Consumer go And with next Research. Edge we'll to Feeney Jonathan

Armani Khoddami

much. very you thank Hi,

Ian M. Cook

Jonathan. Hey,

Armani Khoddami

This in for Jon. is Armani Khoddami

Ian M. Cook

Hi.

Armani Khoddami

this taking the X about maybe doing? around question any price? ability give as Thank investments Just some there, you. thought ahead a emerging in also ability has past Naturals, prices to the of one the take expectations. here we you taking a planned comment to specifically ability U.S., been it – So over performance price like we've competitor does the product that looked And you talked And – of But success the take or in over but quick Naturals U.S. confidence price be even to whether that the price Does with key how a to then lot markets – call. the seems performed are you. XX the about also the in it seems of yeah, as well. some have a know up line yours months. around I to you give for quick question ahead of

Ian M. Cook

have shall an it in we China have a of Yeah, had meaningful market-level pricing. emerging the we found offerings begun say, at, we Indeed price a done where we well, significantly test the learning as take offering we in-store had that we underpriced, markets we increased the so Naturals And the nationally, premiums. have in pricing. more to we at Naturals, are had

in real the than that Maine No with is has carries So acquired value that a value the a they basically price. But to meaningful here States, a most in have pricing progress of generates believes Tom's the price here been since Naturals with part idea. year strategy the better United Naturals trends pace in every was at consumer States. just around and toothpaste pricing And so, seen have general important grown month be our the to on some that States, keep general the your terms the concept that nicely in over that learning them United we last premium which we of to working think, in the of is marketplace. is we so question, the higher in brand I espouses it United here pricing or

of the seeks justifies all the indeed think learning that premium consumer it. demonstrates we a and price, I offering to-date have that

for question. thanks the So,

Operator

have back call additional I'll we the And turn for today. questions all are closing those our comments to over speakers any remarks. the or

Ian M. Cook

to thank look folk being in for making talking everybody, year. Thanksgiving it Thanks, you, the again and to the have happen, to to we Bye. Thanks say. to new everybody Colgate Dave. listening on and call and Happy forward what Well, we for the

Operator

your you today's for conference. We That does thank conclude participation.

You may now disconnect.

John Faucher	Colgate-Palmolive Co.
Ian M. Cook	Colgate-Palmolive Co.
Wendy C. Nicholson	Citigroup Global Markets, Inc.
Jason English	Goldman Sachs & Co. LLC
Andrea F. Teixeira	JPMorgan Securities LLC
Bonnie L. Herzog	Wells Fargo Securities LLC
Jason M. Gere	KeyBanc Capital Markets, Inc.
Kevin Grundy	Jefferies LLC
Ali Dibadj	Sanford C. Bernstein & Co. LLC
Dara W. Mohsenian	Morgan Stanley & Co. LLC
Nik Modi	RBC Capital Markets LLC
Caroline Levy	Macquarie Capital (NYSE:USA), Inc.
William B. Chappell	SunTrust Robinson Humphrey, Inc.
Mark Stiefel Astrachan	Stifel, Nicolaus & Co., Inc.
Lauren Rae Lieberman	Barclays Capital, Inc.
Armani Khoddami	Consumer Edge Research LLC

Colgate-Palmolive (CL) 27 Oct 172017 Q3 Earnings call transcript