Colgate-Palmolive (CL) 28 Apr 232023 Q1 Earnings call transcript

Company Profile

Participants

John Faucher	Chief Investor Relations Officer and Senior Vice President, M&A
Noel Wallace	Chairman, President and CEO
Stan Sutula	Chief Financial Officer
Dara Mohsenian	Morgan Stanley
Filippo Falorni	Citigroup
Peter Grom	UBS
Kevin Grundy	Jefferies
Olivia Tong	Raymond James
Chris Carey	Wells Fargo Securities
Nik Modi	RBC Capital Markets
Jason English	Goldman Sachs
Bryan Spillane	Bank of America
Lauren Lieberman	Barclays
Mark Astrachan	Stifel
Stephen Powers	Deutsche Bank
Robert Ottenstein	Evercore ISI
Fulvio Cazzol	Berenberg
Andrea Teixeira	JPMorgan

Call transcript

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Operator

Good morning. Welcome to today's Colgate-Palmolive 2023 First Quarter Earnings Conference Call. This call is being recorded and is being simulcast live at www.colgatepalmolive.com.

Now for opening remarks, I'd like to turn this call over to Chief Investor Relations Officer and Senior Vice President, M&A, John Faucher.

John Faucher

Thanks, Allison. to first welcome conference earnings and call. morning, our quarter XXXX release Good Faucher. is This John

statements. release call conference differ Please earnings the and these could forward-looking filings recent materially statements. prepared with could Form press materially including our the most website, of discussion to for Today's refer on subsequent cause results filings, differ XX-K that include to actual from XXXX will statements. these our SEC, report related all SEC materials from a the and and Actual results annual available Colgate's factors on

This the of the in to conference including press available is earnings release. call website. Table will financial identified reconciliation in also full corresponding include release and GAAP press a those Colgate's earnings A non-GAAP on discussion financial X measures the of included measures, is

Joining will this me Wallace, Financial our and Chief are Sutula, you Officer; our outlook. Chairman, results provide Officer. on with President Noel Chief on and thoughts QX Stan call Executive Noel XXXX morning the and some

will for it up Q&A. open We then

Noel?

Noel Wallace

and John, good morning, Thanks, everyone.

the surrounding because of we from year. still did year, the of gone, organic to the uncertainty and were tell quarter base this our the you earlier We with end the half. business geopolitical our and we growth materials, in about for the business in earnings there of That share momentum start guidance press some risk the us macroeconomic our and a our to balance is particularly issues strong gives see raise confidence As the concerned the had year. to and on less notable second guidance the release net XXXX, from year sales said, of can growth the and raise we that lower earnings per

I tougher growth people driving focus that we Since face Priority want the remarks focused of three priorities comparisons. are as focuses is organic the my sales Colgate our on to on. results, on commentary one

enterprise-wide to to capabilities firm The our growth helps flexibility past utilize with increased return build along to pricing will portfolio with support to difficult, now. drive for and to that that We fund taken performance moving we balanced and pricing built revenue pricing, competitive these, our going the be and we household growth. a driving over brand management, of environment volume market in the and us is We to provide innovation health, have investment and know two years commitment brand algorithm spending have a marketing share growth and is brand a but times look the to forward we like penetration. volume

Priority delivering or on so is the of growth exceeding packaging still earnings for and items, is to productivity middle delivering our targets. XXXX year below-the-line goals materials, vital. per share for our our year. we're and global laser-focused initiative brand two strong earnings We both Growth the fund a our and also start while from to had productivity exchange and against We are productivity foreign delivering the we the headwinds on P&L foresee in our the investment Funding to driving year-over-year raw

flow and flow improving there operating both and still we free finally, cash are year up the performance. our know on for focused to had with cash opportunity And start strong cash improvement. we further we flow a Again, is

to and expenditures drive debt down to leverage through and through cash flow utilize earnings will fund shares. growth dividends return shareholders cash this to to the We in capital repurchasing paying

this the to well So deliver the uncertainty aware for with but us. capabilities year, however, challenges of I'm people and pleased also how environment. the Colgate-Palmolive, we brands, I'm has in and ahead started the the

your questions. take that, with So I'll

Operator

today Stanley. Morgan [Operator of Mohsenian will Instructions] from Our question come first Dara

Dara Mohsenian

morning. good guys, Hey,

question going the your of just will in a you results off? as strong this discuss point, pricing your clearly, obviously where longer just trails line how time that recover A, we QX, do forward it's about but dynamic to you but in So So pricing. you do business look growth of And we're a an sort think confidence also of volume that at sustained can as is the top question drops ahead know bit unanswerable as outsized volume land and period pricing of off? manage term? drive out I

And just a performance share and if in terms some working pricing of your improved are of of your window market the that when as into you drops off, a performance market QX talk product regions B, strategies bit in category maybe in driving categories about key trends? and can share

Noel Wallace

Dara. Thanks, Yes.

those, back come you growth the initiatives and in volume obviously the the the that's quarter. continues that years to last again couple deploying me that we've particularly CAGNY, obviously and against And see of talked strategy we've been sequential three about, driving at channels. all of to execute core making Let delivering progress adjacencies against and we're and the over the

significant had pull of Fabuloso of well. we take been continue categories. And the despite out America if and belief six sequentially as America to this our all strategy across So of fact North clearly geographies first is to our the volume down. recall to our the you the have would we up sequentially the all North of working quarter. five plays North deliver pricing was the But up that back improved divisions that in America business,

through sequential the improvement we're go to and So volume we we're with progress pleased fear. quite we seeing, very move as frankly, the year expect

to consumer see that in Now contemplated points, We drive remains consumer the where got innovation, particularly the of to goes the right marketplace, where channel where on right right environment being that the we've continue of strategies, that strongly the but is absorbed brands a are shall feel inflation today growth. relative level across portfolio shopping we the is. consumers price it to

Asia. good volume very pricing in Flat toothpaste, -- in Europe. Importantly, Good growth good was toothpaste me, saw first up in strong positive Oral both America. in the we and across and growth double America, in share on the in and saw quarter, as that's Latin shares we -- excuse our Europe in business share growth Care quarter and digit, positive share North

feel momentum we where the we and which a we through half. now. feel sequential a that right pricing said, where get a quarter, challenging strategies behind the we're we as business the But overall, the second and lap more overall, consumption we volume that And quarter, certainly, of back improvement there. strong as good are the bit back expect from the and expect strong half standpoint you So the had executing move volume And about we for from pullback year. of pricing will good quarter in us, we'll in was little we're about as

Operator

from come Citi. of Our Filippo next Falorni question will today

Filippo Falorni

Maybe consumer Can health your obviously, price as increases? emerging of the And in markets environment you like a you second your mentioned, recent more in then to are consumer the like contrast markets evolving talk lot What and the compare seeing you you emerging uncertainty. developed see U.S. key to response Europe? compared markets? you can the how do and in half, of about terms

Noel Wallace

Yes. Emerging was strong.

first that organic double-digit the the improve. quarter. better that we're to in performing quarter. quite frankly, saw emerging You the sequentially they in over volumes in we've pricing did than last obviously pretty the look pleased fact Sequentially, volume three markets, taken with at the And continues again, if you quarters, the

advertising to and being that markets strong able innovation support drive seen that everything one, we're market pricing said, putting in we of emerging we Now have; second, in business. continue gives into in the continue as accelerate back you've into back that we back can half and innovation intend the category. the the the confidence that got advertising to markets year, to sustain increase half, to that the the do move the and the to we've in again, That we're of level support particularly volume order to: into emerging us, growth in we advertising

in and the growth of China, key and Latin America, of overall, emerging South with particularly and Brazil good. markets three those progress We regions, Mexico, pleased Asia, were So both pretty Africa in in particularly Africa. the all in strong China really

a pricing we the expect So progress But good shares in emerging pretty markets. little emerging elasticity and you good regard. that of taken feel stand holding given in about where up, we've would we more across that level overall, markets as

As it relates time to the tell. will second half,

the we see compounding mentioned the of And back back got feel I as move we shopping upfront, we the business volume strategy many the news we pricing important in move balance order impact to got half we're we pricing to the we've we'll upfront, P&L, the and the I as got year. strong capturing of as back through of mentioned is And the but which shall The good half, consumers across to I between better pricing really categories expect We've good the need innovation. As half. a flexibility into that the see. today. how ensure, in drive channel in is we've that omnichannel impact are get a

Operator

Peter come Grom UBS. of from question will Next

Peter Grom

and good operator, Thanks, morning, everyone.

perspective. to inflation this million range? guess all pretty still And basis remarks. I is morning on XXX prepared is point as the that we reasonable last to get the I bridge, headwind point to the million the headwind the appreciate the discussed So on that the trying in a from maybe from you of $XXX commentary a a that Stan, But impact is range at $XXX I'm reference, close dollar dollar what in you’re call,

what there's think broadly inflation in component just any about either frame the But and that how bridge of is inflation of than way Or move the we So to year? I realize number? as balance to was within -- there the just line. more more through that that

Stan Sutula

Peter. Thanks, Yes.

we elevated. down $XXX commodities. driver in million tail the why around our at more. see Hill's, predominantly coming as seeing lot is and remain ag as a underneath $XXX of We this. those That's there's relief prices that still year. those, that particular, we're first, it But level, the see that through And range, So range don't we on look kind to that on seen affects haven't of which the main that inflation we range really is go million of we continuing still come a

and Home look they those If for balanced. and the you do Personal moderated Care, Oral guidance for Care the our year, in Care, categories, we toothpaste, that reasonably reflected stayed was and at have other more, like

look here out So we in -- for we're essentially remember, QX. as locked

a for QX, We end year. the going as range place for have less of in bit that still back viable into the QX locking already and I little the

the us this the around what that will year. to this exceptionally an gives had is And good due that The happens the That significant pricing on we going then to as Growth the year moderate wrap we we've saw, to the are to say despite that very margins start taken that on confidence we and year-on-year the Now this. helps go impact, we commodities range increases you has a last as year, that to in to inflation. expect be through also helped mitigate that. increase still fact we Funding

Operator

come will Jefferies. Kevin from of question next The Grundy

Kevin Grundy

strong congrats Noel, you everyone. morning, And on Good on Thanks. Great. for a reinvestment. result here. question

So obviously, results here. strong

are guys top getting for. the You that payback you'd hoped line

gross through. You're profit come seeing

came standards. of You've you one. thing, just levels The That's sales about course. gross and even since thinking high it as since a point seen made advertising by Number you are that. and should exceed advertising profit? of a you historical good on How percent reinvestment marketing increased you levels in -- a come in, was

standards, top about 'XX which to to necessarily sales it's that And as as dipped are? then historical if and to where you of we growth here realizing that? 'XX, mean, margin and line high, of How you but that we sales, -- are sort think it's begins that's are percent you go I the payback at with number gross relative thinking a not is decisions should XX% driving X% back high two, of comfortable to about improve? how profit

Noel Wallace

was leverage continue and to obviously, that. driven to to our more of critically we the Yes, of and Kevin. P&L driving circular really able of the important by feel advertising. we're we with more increasing support pleased move nature the out P&L is levels that in getting And advertising the and get we're line, obviously is the Sure. as getting P&L, pricing top driving Thanks, how sustaining the the to we're advertising we're business, the to level in

and programmatic business, Skin the particularly and moved obviously Health Hill's great where seeing Care relative the Oral in into content more money market. that we're our money, on the We're in seeing our and digital. ROIs growth We're personalized market We've and shares digital businesses. around we're delivering the spending to

offerings So that we we that the to And we're we continue and with portfolio of that think really pleased with a the have. advertising speak. that broad the attracting we off obviously against balance levels building brands fact expectations are deliver the that

many to important have our we're to drive of around continue very, seeing very sustain We to reach world, ability high the household penetration, brands the is in and with business. that that growth the the reach

As we my need get businesses. forward, particularly parts still we to in of some view, would continue and We in look spend to businesses, Europe more of some those behind businesses categories would anticipate have through support, results. half the because gross we're seeing in we margin expect to as the fund accretion year the more the U.S., we and continue of to back those the

moving how drive it are of is deliver growth we continues running our middle the that brands, sustainability that's and and for margins, right the share better show forward, brand P&L, what better equity, per to line which that a to of our and want kind of shareholders. of continuity of bodes and in earnings top the leverage strengthening obviously to we continue we're now, brand big the testament out the And and getting ultimately for accelerate flywheel how the the ultimately, well support invest,

Operator

question next from Our Tong James. will of come Raymond Olivia

Olivia Tong

contribution of usually, about Growth talk to margin. than Funding the you start bit. a as a materially savings wanted I could little your improving bit, a that supply the chains And then if imagine year build gross function the I it's on of bit progresses. a expand year better expected. Clearly,

assume quarter should regular happened is here? there this a something of the from onetime-ish in Or So we cadence strong Funding sort result that Growth quarterly to contribution? the

Noel Wallace

was This very Olivia. intentional. Thanks, Yes.

accelerate first were seeing. back we of went in sure looking year, we the margin projects half year this order that half we place deliberately for accretion in have of we inflationary the given gross to As to pressures last through were the make that

where once done we've the In has back put had work line us to would getting that's the to gross I facilities on of half see efficiently, say the more utilization come addition, has capacity their our whether run growth which feasibility. to allowed of funding facilities to projects that again that onto more teams, a the We've in quickly down, we determine Hill's lot to far the obviously, that on the very year. the much increases sustain in first in ensure we half focused order advertising in margin opportunities to see the that want get to back and we the

make the we that deliberate job So to really a as have we the in it that we expect strategic in more that the teams you certainly And to and growth regard done numbers focus got as was to balance continue and funding saw front. the move that sure through of of would wonderful up year.

the and you Let a color He'll some again throw give particularly commodities Stan. seeing of we around have underway, initiative. productivity to over around little global we're projects what other our on more me it bit that

Stan Sutula

little FTG. work going And the these Noel. the had SKU, on volatility year. in than Thanks, start team to a utilization. has we a comment that. time deliberate. years, very saw chain quick the be some particular, a different a highlighted around I In That Noel to just moderated actually was little bit prior had in had improvement terms as you has think, here. In prior This the capacity we've Hill's Supply of Yes. build strong of better years. through that very bit is on

equal be the should so have year, be So versus there's this this at you to point that as from is go SKU because still more cost, important the And we year, we think go view. of through through the year I to you as as the growing material through a will we the strong start a headwind the think look year. going

continue GPI that. to need have offset program, help our from that we we So that impact. we And then get benefit to

line charge the look also for we is to the as P&L, but the throughout saw that material not but team GP in quarter, offset You driving headwind. the productivity a small line, in MBO things the just in

Operator

Carey Our from will Chris next Fargo today Wells of question come Securities.

Chris Carey

morning. Good

I just commodities. about wanted Stan, So comment one to confirm

and clear. to been million kind $XXX sequentially slowed million stepping range, of the little bit to was full obviously. then American think question, the the expecting this year that then bit what I that somewhat $XXX just it from standpoint? little And Peter's an has a margin But around for a you're is related on quarter, inflation up operating just North

bit going, relief maybe with there quarter little business maybe logistics this I inflation, obviously keep the with easing with a and transportation and I was thought would that building of North otherwise. have know noise productivity some and the recall but and America can

that So any and clarification So America America. the on unpack just margin maybe is thanks can comment see way that you where there performance North you on going? North things commodities and for

Stan Sutula

why I start with first, the North let's So start commodities. don't here? --

we the to we $XXX relief we in XQ But largely into year, come locked. so mind, And I that keep a that as million term. the mind, locking, $XXX said, into don't to half as So in ensure bit we we of see million through. range supply. So go hopefully, in we'll on our right? lock back May, still keep And the a lot have little in is short we're the almost get, already of see the moving order more impact. closer

basis. margins go still a North about think improved a through, year-on-year also America the on improved basis. and sequential we on margin America If so here They North

overall point in here. recall year. the the GP of so down So improvement through clearly, about a again, doing Logistics in at we'll see start expect versus that come of lock in to what ocean the We on benefits the some America the But That's help Fabuloso activity. logistics see And mostly that's we look it you of we logistics, go do as of side total, that view, some quarter. certainly We've seen will we have had start a you in which the think margin. the largely North as important. we're us, from behind getting if impact progress year.

Noel Wallace

Yes. a of things. Maybe couple

XXX was focus basis We as quarter. Stan profit profit operating the nicely, operating business. on obviously, roughly were said, been big which North points has up So the in for our first up America

step, the right we're right particularly So the against P&L, taking making managing progress the of profit decisions feel gross we overheads making controlling and around and the logistics. right middle the our and

So an business. has important that reinvested sure was we're element, progress that, been and making the in that

a other of Obviously, North up volume the digit couple highlights great up North that in a with America little softer. for ex-Fabuloso, So toothpaste. was on have double America. Toothbrush growth, growth quarter, is volume quarter quarter been on would the including business. for on Toothpaste

a You our we of remember, our were out resupply and year stock lapping product competitors. from some last of of some

So was But Care Fabuloso we mentioned, a Personal single volumes Home the to high good recall. bit due up progress. overall, soft, really were digits. down Care, there. as

helped in we other line that aspect channels. The to And making growing growth. in is non-Nielsen some part and our of is for in has this I we're strategy out growth the of to North significant drive terrific non-measured faster-growth channels, America channels, call of which America obviously was where progress saw that top North would again, significant

translating the the on So top North the P&L of and is moving we news to and the seeing forward, we're opportunities, America, middle P&L. good line, but focused progress a see on overall, good the that's very good quarter for

John Faucher

that. of QX volume QX, Just from on Stan, year-over-year sequentially from then, North performance ex one have And to America to clarification Fabuloso. not QX the... up on up would point QX been

Stan Sutula

the supporting fourth pricing market. margin, on advertising Yes, up in market quarter, it's or you the by Fabuloso to and versus XXX that operating combined both increased that's innovation about as see down the with taken the really basis the we're And investment driven points year-to-year in bringing we've it's so. impact,

Operator

question next come Capital Modi will Our of RBC Nik today from Markets.

Nik Modi

Any material, us exactly raw what just If question any whitening clarification And stuff. and around Oral more innovation you've Stan, is it the franchising Care I has you the on Noel on on just would broader any the impact driving what's just helpful. ag on pressure that? the can curious causing perspective a done work be core quick I'm detail or strategy. ags just give halo that on the the then and could the whitening if toothpaste. ask my are

Noel Wallace

Sure.

and some expanded if have North market that, Optic range at much that we prices deliver me Optic on Colgate Let and impacts and Stan those into brand. seen have -- brand, we've strategy whitening around commodities about as significant you Yes, particularly specifics products significant ag take the the very we more And get Hill's the the White very nice is White Nik, the and the America, very efficacy then at-home here in to as halo entire the whitening prices. that take let me we'll building across the the particularly to premium consumer, brand. as the well

short halo the the to is is, franchise the well Optic to your the as answer clearly, transferring brand. improving as So Colgate entire effect question

Stan Sutula

the the the kind And Nik, Yes. commodities, of across board ag. with most of on it's

that range. protein even driver out of drought Ukraine, the better, the the pushing has forget world effect been with the that though are $XXX on to impacts that. risk of the things have that Don't pressure areas all of and of has well So soybean, been the et the as some the U.S. $XXX put million crops, this, corn, remains Hill's. pressure other cetera, the That on real wheat, livers, side little all risk bit some there on in of million of like a chicken

Operator

English come will Sachs. Goldman from question next of The Jason

Jason English

over cadence could if them. you recover X,XXX can it, obviously, at basis was folks, segue about great talk lost you Good with points years. and in it. the were for which wanted We've components recover, to a margin the the Good unpack Hill's in because margins. of hoping that's Hey. the enough to I on and you profitability the Hill's and last morning, quarter, actually I few

much what's how the of on we So there improving of looking acquisitions? mix and recent that? cadence at from And capacity your are the effects bringing

How supply utilization? much of some like chain a the capacity, assets result up the that is as the the slack in stress standing of and you're past maybe related underutilization to of the

think buckets, if bucket reasonable is I think large third it there's tell then and and How to for third of other the roughly I come the back? me the the the when? And that cost. think the Sorry that bucket at could is X,XXX, is bucket pricing And if so, multipart.

Noel Wallace

Thank No. Jason. you,

me to bit, difficult you improvement let and again. to business that growth continues continued then top specificity we that Hill's and comps organic more perform strong and for. sequential line of little But the very a can volume looking despite in well, strategically, Stan So up this a provide continue the come were structurally

in So and XX%. again, improvements X% XX% on on with and volumes. last that's overall, pleased sequentially the obviously And year year of XX% XX.X% last pricing

as deliberate Italian in significantly the drive drive associated that. operating results market, the three dilution, we're the as more will advertising couple strong be we by obviously, in sustain our into facilities even of that, the our ag the is our the a business. that levels. in current the forward and Stan That built get obviously that facility elevate the would do of up things following. integration Red quarter ability to We've cost, to innovation new sustain and that portion be increase of continued margin largely we through levels driven is seeing ability the market, the significant said there. the and advertising going that Obviously, the to strategic plus of pricing marketplace, drivers have increased into, moving Red a capacity. to the private we label Collar the which particularly We So is key and move would of Collar as or manufacturing with variances very we we support. we the

plants, We'll plants, back through constraints our sequentially will far forward. we're full forward, put as that improve margins those more to will efficiencies existing look us the will throttle progress allow to out we of the Funding year. deliver strategically, the half plants move regard. we the of running look as As efficient continue be at in which Plant those Growth in into we that more get

to line overall, the and doing the well, strong all we capacity growth. ultimately taken is the steps feel to and progress business improve strategically, middle that. We on rightfully good, P&L, you need to the So is we've of say, delivering do the focus very very, as there

Stan Sutula

Yes.

Let me here. pick up

So a in sales, look ago, at couple the million XXXX. look, of we're you versus investments well and $XXX business first in if take you first, up if net of you these years keep quarter quarter the back mind, go just a over

impact to total slightly what investment a as XX at point the Hill's. off. the brand the So we in company has basis impact paying is If label has -- basis points over we to look margin, XXX the said private

a basis. material at on that you a is So a as take look GP to impact margin Hill's impact, that

that and Hill's slowly the it contract that at that volume as and next time, through will private down, Now label down margin. Hill's will wind backfill couple we with of then years be wind over

material already also of we've the inflation as Now been impact the but And we're manufacturing Collar mitigate the not to that keep have Collar and pricing quarters, just in now, talked come manage of impacting they've a footprint. all here significant that against the facilities this. about, Red entire is has last taken predominantly fact Red Hill's the mind, their helping on, But several raw utilization, over margins. that's us helping as

the savings. That's growth the funding enabled to Hill's to materially of contribute

right where is think Hill's positioned. So is now well I

the through manage can quarter. case of in as material first coming to go we in I we going and margin improvement rates think our sequential clients that continue we'll we supply carefully out fill see to improvement so saw year. We're

Operator

of Our next of from question Bank Bryan will America. Spillane come

Bryan Spillane

I for just quick -- Stan. first got clarification I've a

I think talk higher about in original going expense the your maybe than guidance, plan. we net interest

is you color, that. put I related this assuming if number a March. just on refinancing? refinanced you can -- put could -- And in some debt some put you some the think So maybe to I'm

exposure So the the is debt? follow-up. rates? it have a related to then of just Or refinancing it short-term financing is like variable I And to

Stan Sutula

for the question. Bryan. Thanks Sure,

So large going here as we to interest it number. first, call want on we saw out up, not -- is this a look, well, is rates because this we

So quarter $XX issuance. It's year. the to think related not for you really should first around the million debt

predominantly We demand on had are with that. the very on increases It's of number really happy and good that in rate assumptions the very We Europe. bond.

there, what the So coming the as the year. we we to look difference slight at had into the changes ECB anticipated and

we moving inflation banks, to As now. central depend moves that's and that's going all a right our know, it's target, guess but best to on

So modest year. impact for a that's the

Bryan Spillane

Noel. Okay. then And for Great. a question

Colgate position more the maybe years little more definitions, was bit chains? you to about And ago? Just input has maybe talked about And a bit than and right? half. about that the if reading the a risk if specific maybe consumer at think So bit Q&A a in it a and of is that level, talk like that risk remarks guess, costs supply a risk are I so with the what little listening what me maybe we kind volatility case do, that a of not higher prepared lot than got risks maybe a to you how or in sounded just concerns of manage is risks in less to the two from second or lot may little the agility about, could -- just

Noel Wallace

you. thank Bryan,

appropriate significant seen affords we inflation price we've the categories, when various unknown, the quarter half I in going is everyone. those really consumer the breadth the really, pricing. the in the clearly, value-oriented of been compounding combination points a consistent to that's happen fact that to the world. periods at different print in So innovation really really us most portfolio our our And historically, theme that our the impact back segments to weathered push the terms well, one address first anywhere opportunity -- of and think, that's what's great through a I'll the by the time of the at environment around and fact big of

that. new frankly. we pleased progress, Toothpaste a of across well based like seeing premium that's fact category very premium key business end positioned of growing, with with particularly our is middle the pleased in some at for has growing focus, on us, and squeeze in the we also to the market, and see have. a value been and we're and channels quite been you the relaunches business base times this, that with that we're and of Premium in the We're the focus strong our have great the So the tend obviously

we lot as materials, stabilization least seen we've those you've packing on but about continue we seen a and heard that see, a Colgate a the side, elevate, move. at we've the stabilization shall across prices Raw to ag

more confident multiple raise got we've we felt So transparency to more dimensions the that. in predictability that. because on why a the guidance bit reason we see across Hence, there little more

As Stan that some got will mentioned, obviously off. contracts we've come

have second adjust to rising to be inflation, comes, the some the wage pricing decide it on Now the year and they how would that relative the unknown of key that They're of we'll will we our to as commodities suppliers deal ultimately with is do. half particularly in purchasing. facing what there

The China. is other aspect

will world, where but impacts the the We only business, not China quite Asia frankly. see

don't expect We to in quarter-to-quarter. to from that progress expect progress be vertical. a obviously expect it market. slow a it I I be

we seen yet, half but have probably back see retail an come that is the will the first business shall not travel that in in half, the see. we XXXX, and expectation second of We not

Asia Now it. on think obviously but strong as we back China, we're deliver to very comes progresses, well quarter and a positioned into we we'll and that economy get the had Q&A there, sure as I'm

you little big first foreign fact a the moves. driver think has last risk. to forward. know, in low exchange. strong getting you pricing from with and always in past been it's The again, We come as been a going That very we're that back remarks volatile, the and fourth is where in that quarter. positioned quarter the here we'll as well the right have the prepared of single-digit saw now -- the P&L, as clearly impact bit but see we currencies into P&L, euro, the is But has American exchange both adjust that we'll Latin The the but foreign through a

Operator

Lieberman Lauren from come Barclays. will question next of Our

Lauren Lieberman

you was volume Two questions that's that basic. where discuss. was in you on typically on curious of by if I stand you I about curious But could kind balanced just perspective we think everybody know But sort as just the -- was a pretty category volume else. more not algorithm, by revenue like is offer growth of seen? kind and of And the segment. that performance first path you've forward shift towards any something I that

didn't other the be we question environment I and haven't And support. prepared a your you from knowing about sort Noel, a companies, commentary in just something lot that remarks, heard your difficult. if ability it and particularly just comments innovation or know mentioned And and the -- confidence a pointed I in on of the advertising then was was, competitive would of pipeline compete to other general

So on I sorry, just environment. that the color curious on a little competitive -- behind more bit mean,

Noel Wallace

and Thanks, good Sure. morning, Lauren.

the take me will categories. label aggressive. and and good you question news is as costs brands function Let local see second likely down, will private be The come both environment of our particularly more getting intensify The competitive that first. a

North If you label label, benign, progress we're private shares. take private no and in America

in of cleaner, to of Europe. speak, hand So acute growth bit private little little a and a bit soap the label bit in exception liquid a little with more

as back well. the see did as we first or the discrepancies quarter take them we'll brands price half as saw private to global you between label we and pricing that translates gap As how have the in increase, in expect to

it's that anticipate Obviously, label think promotional could half. environment costs competitive in say things likely worsen flat I volumes local we're competitive back back half, to to the of prepared into what and we in we elevate been need category, is see in costs their And will that. the the So expect increase for constructive brands to come I as from we're in but in you'll well that which probably think that, quite nature we more so to far. are, stay private the most, terms but regard. where hearing the based on

question, your volumes. On first

category market driven into on world slightly the general, of flat volumes so just that's by much Oral the volumes, to there's obviously, that in So I the gone Home negative side, across and if take both Care. the Care fact pricing most volume Care, Personal

Oral markets in us at Toothpaste, strong good most look most growth volume the I Toothpaste. across you markets talked progress on specifically, If growth Care as on in about, double-digit side, really

trade on single pleased competitiveness bar the that low one a side business categories there. strong side elasticity, digits we're in side Home terms business seen the to to on mid-single And bit from Both high down. hand more mid- we've volume standpoint, Care depending Care, the little where digits growth, like little seeing more in Personal really soap there, marketplace. with So on And a on pricing of we're the the of has around experienced and cleaner given little taken particularly and bit we've more depending what a of up the that price the marketplace. particularly in digits single a challenged liquid pricing soap. more

in had than in sequentially more pleased the that But and we this given pricing the overall, quarter. up, again, fact fourth quarter had with lot really we a sequentially up

So good we're that. all progress to overall. volumes the and carefully, over watch We'll have

Operator

question will Mark Astrachan come of Our from Stifel. next

Mark Astrachan

in wanted Europe. I and to ask margin about North America EBIT

how where years bit progression the levels. a biggest where you some it you competitive Is think I do are Hill's, around that? one markets to seems it or to levels realistic And were margins? drop-offs historical also be like get about to more FX, back seems cetera, is the helpful. impacted timeline et are versus a look appreciate sort take potentially it that you to of you know than of ago, inflation, spend outside at relative could those of If it's it levels? you a few eventually of today why others. would little maybe think Is like of that of those Why kind that of not but

Noel Wallace

on The that gone market moving a as really top business We of your North Yes. couple quite the to only demonstrating America, the is and through Yes, as Thanks, that very quarters. some spending. clearly around growth is Mark. the wanted on That's in up for of spending that's not our line. last brands, we're line clearly behind answer. the the see but us bottom reinvest the in We answer we've strategic. forward, notably

overhead we've in It's sorted America. and our in been P&L Getting through gross profit key getting America. had leverage getting that to we gross continue a top plants, out in efficiency the in North P&L. business North clearly the profit forward. good a line. invest translating forward better progress middle focus, We're of see But we'll that the We're so better to will behind moving lot the and drive moving

gas seen that other into driven, we obviously, Europe, around prices, of a exchange a world, environment gas certain the than to inflation extent the the around increased in plants. the materials prices effects European markets raw fall-off high purchased bit higher we've more little by and foreign particularly in Europe and obviously, of and our the some

a benefit as first quarter XXXX, the our more pleased the execute again, the were move able strong little the in taken towards to we've of pricing But So pressure in and of quarter, us been back overall, latter see we'll bit that end there's we there. we forward. XXXX pricing and of that half

your and our to drive top gross overall, continue observation got we of of is the levels importantly, increasing a we've -- advertising profits through So the correct. good handle the feel to move as We getting line. the up operating back sequentially year and the or half sustaining margins

Operator

of Powers next Bank. come Our will question Stephen Deutsche from

Stephen Powers

guess. couple of I a cleanups, Just

Fabuloso on during just the one my some just first call. recall the Just confusion because in on the received inbox I've --

the does Just quarter? reverse out impact is there one. quarter? in in was quantify number second question that the And That's a to what way a benefit as the

expected number Question a way topic. be there's the thinking don't the two, know that the to quantify on helpful or if how about what over benefit would year, as of well. but course logistics benefit I you're the was the

-- where well? up is Or of was a but and is line I And builds the question I specifically the to that on it margins, it just is driver get is more scale? Jason's time to margin? Hill's on that on that just Tonganoxie then piece the bridge on plant, is kind And the material as guess margin the of what last

Noel Wallace

Great. Thanks, Stephen.

Let and I'll on back the question, to Stan logistics. Hill's come have me and Fabuloso take the you

us material the to significant impact was So volume we that, performance quantify volume QX. move North as to That the was in the going was North is quite America. impact line. into behind a not Fabuloso it quarter. America It but We're to the second through

number, move versus benefits Fabuloso into Fabuloso you the the take of the North we the up as the volume. back if of business out of America XXXX were business sequentially fourth the see they Again, coming we'll forward. P&L So quarter in

the So news it quarter. was a good is us. And very time-driven the first that's behind in event

to products plant supply Tonganoxie progressing, the very on at for Hill's important the strategically, a that's us our side wet the strong demand around have current business for the know, you the we of as inability given world. and wet all demand

our And end have plant benefit wet start-up the tail we'll with the associated some But move that business of transition growth anticipate, should happen to that getting at moving up us the overall, into as accretive we obviously, strategic that and is the towards That So of third benefit running will and longer facility. Hill's we particularly that business the term. we line will costs be the certainly us quarter. see as through will of margin continued margin business. that XXXX, for

Stan Sutula

Yes.

up logistics here. pick me let So on

sales. in year-on-year the And expect materially. XX in decline in years. percent don't So our going incremental overheads. to of of it's come and of quarters, expect overheads several you the it we saw down through look Remember, year. logistics down -- it's I down SG&A it be a coming X.X% I been of saw to look the this was kind and the for sales if down it's we we remainder year, quarter, for QX, it slightly. was again we see as first headwind as And out and our to

the of with So X.X% think will through still go the X% start probably it we I the as at remainder now. we're year.

as think you So just moderate that's X%. above think we kind through out certainly and stay the sales, year, of look of how as the but a will rest percent should a help it year-on-year, about of I

Operator

ISI. next Ottenstein will question Evercore Robert Our come of from

Robert Ottenstein

Great. Two follow-ups.

one. a First quick one,

That that were e-commerce the North you helpful. club channels metrics more you would that? America. be very non-measured in stores? strong -- or that mentioned You can give And around in Was some us

And advertising core number. question really is then my it's on big the XX%, a pickup, spend

up be and may of expect for it return more full term? statement up, Is And little the then you income sense see bit the a to us more like that more get to where or this trying sense and what would look you longer-term following give have very of to into absolutely that, term? of mentioned a focused level short You can projects so longer innovation or catch a need you either year do as sales, that high you percent money you elevated is just going? going forward, maybe because

Noel Wallace

morning, Rob. Good yes. Sure,

Let questions. me both those take

stores. discount CAGNY talking faster at we've strategy that years by as First, are discount for stores, non-measured channels, that highlighted And growing on channels. focused a to I are again are certainly, channels very stores, few been that the back you which growth we plays now. mentioned, quite the Again, measured value Nielsen, club this on the about particularly not e-commerce,

seeing Some emerge of the in Latin big box America. stores that we're

So been seeing so has new of and for that China, this overall, of strategic deliberate coming in we're out us. obviously platforms some the

channels to if of And in tune to what getting the we're number, non-measured channels. we've in take significant Xx Xx you America growth measured seen the North

obviously, there. that growth. is to sustain The key So growth good

business up Our roughly sales. of in total e-commerce quarter, was XX% double our the now digit

and So good overall, share growth businesses. we're in seeing those

CAGNY. by and China, In brick-and-mortar business. in shares in at you of I we've the progress fact, shares continued we're in demonstrated e-commerce And the the had. driven in to some CAGNY, China, seeing that we if our increase fact, take since likewise, very e-commerce much strong that

is feel we us. working for overall, So the strategy

transformation, TV businesses. penetration, behind our in of awareness share clearly, higher scale given using space. our the but see many of scope frequency ROI mediums brand by to ability driven really spending. continue to we reach to see We're in penetration. lot terms terms terms delivering our supporting fine-tuning digital markets, retailers, largely grow category of our we for growth spending for in drive as and our growth growth the and coming, we're continued the and And we'll and that ultimately different fact and of Obviously, Again, in brand a in consumption, ROI digital elevate of wide more our brands spread of a

just want to absolutely the be We're is This of is brands, growth. sure measuring the it that very sake making increasing and We returning the spending quickly. for to deliberate back not spending. and category driving sure

at, aimed from Rob. results sustain accelerate of we've to So the We're brands health continue there's number the looking our line to top the obviously grow and not good a specific we're strategy the and we're and seeing put in marketplace.

Operator

will Cazzol today of question Berenberg. next Fulvio Our come from

Fulvio Cazzol

on on view investments. et is ease making Mine COVID, Nutrition I cetera. Pet tailwinds capacity. the standpoint, should as also think investments competitive we some category. the your And in growth during medium-term like the prospects And on your was medium-term interested the I outlook for the significant some are from you're about of ownership pet making if How think increased peers

in in the bit industry coming there favorable the quite turns less Nestle manufacturing. question. my a balance So a that's I think Is result and that pricing on power? softening risk is doing supply-demand years

Noel Wallace

Yes. Thank you very much.

a on answer first of me couple let -- ways the part. take me Let

wellness obviously, First, pet continue for age, quite delivered obviously, will we Those adoptions have, therapeutic obviously an pets aging will pet through to products COVID, and increased significantly. coming and population.

that. good we So feel about

the You brand the Hill's will franchise. penetration we've of about talked awareness brand and recall, low

softens feel not premiumization see even as today. volume, we So the softness little which the necessarily market necessarily a a to have value, in we grow but in seen not you if market bit, continuing

we've constraints right we internationally hence, investment to we feel some the awareness of And we're that given we we brand of brands grow strategy, lower in the portfolio have the penetration aggressiveness yet got exploit feel ensure today. have continue capacity We that to off to levels to advertising opportunities we the also have. that have of right the building the and

And so to we'll go continue obviously those moving after forward.

as We in capacity we plants see as competing feel that, we we nearly not issues opportunities real efficiencies up our the we the up currently line where better only produce putting our in. the drive we capacity Tonganoxie address in expand capacity aggressively speed obviously, a as or the to as to And to -- facility Italian market. past. to in business. I bring plus move recipes, us relative real for as But the those the that is we forward, we to segments We're feel obviously where bring can't for to weren't we have growth continue

of our so category overall, will that that business And drive levels but continue to well, drive retailers. the our given will support bring we'll not the as to only

Operator

Teixeira Our question last of from today come will JPMorgan. Andrea

Andrea Teixeira

to playing premiumization some seeing starting the in into called out a you know numbers. entry appreciate the of that your world. volumes out, consumer still I part down Stan, Are Noel, volume improvement level worldwide. sequential price see I is in parts you points the mix trade of

seeing the volume was I So increase sequentially. apples-to-apples into speak if wondering can that you you're

and share in the America that, and it And on the was in you're mostly But EMEA. stabilized, value share, assuming clarification understood leader then pricing. including leading a given Latin European, you're in especially obviously, I the LatAm.

soap in you sub-category? So how SKU are in categories progress, you volume seeing the in out particular as as especially those other how Personal share you play and regions? about that the And Care, over hand that within

Noel Wallace

a the the inflation, which area for to cities, we've in as prior kind question. premium segment of markets we're seen that's two where tale the under-indexed the of and Yes. grow in. lot with Thanks is Clearly, continues of have the you challenging

Health fueling that's channel particularly Oral in of a Care clearly, the business. our So lot our and in and advertising Skin investment strategies,

that a to The middle end we trade the bit down bit the with squeezed and a the made, segment little So more point getting lower into grow. end. lower see you continuing

of end margin as lower good our might dollars the better or that might premium while be segments. some margin percent absolute be some the lower, remember of than businesses, Now our

our breadth So that portfolio. about be, feel pretty mix the of continues the real and for we our advantage view, portfolio business, our of overall, relative in to to good our a

premium the businesses. a advertising seen pricing, clearly Relative segment, as shares, the And Latin a The out categories. particularly done trade of in ensure of significant in trade quickly have sustain get to would and we little in Personal down, Bar than markets. in the the particularly I as up market. the we We've little taken emerging pricing tends Care particularly down, possibly point increase okay. the to the elastic to the to in cleaners that innovation America. can, flexibility side deliver Home we volume we numbers many dish holding the P&L more bit the markets, price or segment, our be soap Care, more particularly we emerging of drive in for that them

a seen lot we've our of constructive But competition. from pricing

we'll label of been there very but yet, hasn't down private carefully. significant of as watch that trade amount a So to

were with the mentioned, positive as and around up pricing by Soap Personal challenged, Care double digit in in particularly Home segment. Care Cleaner worldwide the So bit little a more I Oral looks and positive volume. Toothpaste Bar okay, segment Care both

Operator

of Noel This and our for President remarks. concludes Q&A call the closing any Chairman, I CEO, portion will now to Wallace, Colgate's the call. return

Noel Wallace

us their the to And steadfast execution. extend they're start quarter, to We a to the resolve market the a year. in thanks just and in to stronger first our bringing tirelessly that off Yes. interest me XX,XXX strong getting innovation and deliver the greatly who strong for Thanks, appreciate let the company. everyone, for personal worked the Colgate momentum people have a your

look talking quarter. you. everyone forward I to So to Thank second the in

Operator

conference The attending We for now call. concluded. you today's has thank

You may now disconnect.

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