Colgate-Palmolive (CL) 31 Jan 252024 Q4 Earnings call transcript

Company Profile

Participants

John Faucher	executive
Noel Wallace	executive
Dara Mohsenian	analyst
Peter Grom	analyst
Stanley Sutula	executive
Bonnie Herzog	analyst
Andrea Teixeira	analyst
Kaumil Gajrawala	analyst
Kevin Grundy	analyst
Bryan Spillane	analyst
Olivia Tong Cheang	analyst
Sergio Matsumoto	analyst
Christopher Carey	analyst
Stephen Robert Powers	analyst
Lauren Lieberman	analyst
Robert Ottenstein	analyst
Korinne Wolfmeyer	analyst
Mark Astrachan	analyst
Filippo Falorni	analyst
Edward Lewis	analyst

Call transcript

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Operator

Good morning. Welcome to today's Colgate-Palmolive 2024 Fourth Quarter and Year-End 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 Executive Vice President, M&A, John Faucher.

John Faucher

Thanks, Betsy. to conference quarter call. welcome XXXX full and release earnings morning, our and fourth year Good This John is Faucher.

Today's conference materially differ Actual results call will include from forward-looking these statements. could statements.

on SEC with the risks the Form at prepared assumptions SEC, time. materials, including and year Please all fourth and annual inherently website, XXXX Colgate's XXXX views on subsequent cause our factors this actual of filings and to our XX-K and and statements of results our materially our involve are report for Forward-looking related made quarter the refer earnings basis and and to release uncertainties recent statements. filings, could discussion on available full differ most a these from press that

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

Joining Executive morning his Sutula, results and open it our Wallace, Noel? are Financial Q&A. me you Chief Officer; provide Noel XXXX Officer. will Stan and thoughts President and on the then we'll on with call Chairman, this our outlook, Chief and Noel up for

Noel Wallace

well XXXX as and all joining for results as our XXXX. you discuss morning, thank Thanks, John, and our everyone, good Great. us today outlook we as for

driven line this XXXX, against the -- on confident ahead for year. I XXXX, strong our growth of and was long-term guidance. of of either they why plan in Colgate continue target year of sales very we our few drove billion financial goals in strategic be initial of X%. Let sales is or delivered you that results prouder me X% ambition. in deliver Net This to our of exceeded to make XXXX in organic team before couldn't by points tell which sixth growth to I the year a ability $XX one be which ahead consecutive of our our our

single-digit in and growth quarters. high XXXX. X of top in growth pricing volume We We in XXXX, organic all delivered single-digit delivered high on growth

the volume and on long-term deliver growth. We're we driving in grew year, to For every way believe we category. division penetration, the in every household best focused is which sustainable

is brand year on which percentage spending, XX% a increase, We another health. and XXX This XX% of of had up top increased is advertising basis improved points driving sales. significantly in XXXX, of up increase as

share share Our global year our category third of to of toothpaste category value growth. consecutive drive order in market strategy growth driving highlights growth that

XXXX well to strategy from innovation Our XXXX. from the and incremental off risen contribution to paying by as has XX% our capabilities is build scale as innovation sales

foreign despite We Growth capabilities another the and delivered strong significant the and operating year Funding gross spending compensation and expansion increased exchange headwinds productivity, through margin for on our particularly initiatives. of advertising,

gross margin. invested on initial per exchange in our of both capital. the improvement flow. continued Record base line sales operating Record and foreign in cash Double-digit net top-tier cash guidance shareholders, on cash headwinds returned along our despite growth return free earnings share to ahead with and incremental

to very me XXXX. but another move let now So year, on strong

that how investing in XXXX to in volume levels The by beyond In designed have been XXXX, we'll the sheet. to so to that XXXX, and strong All speaking more see was and and future flexibility growth, we I spending our continue and many strategy continued deliver through could into same about balance building challenges of strengthening opportunities. in you household and confidence our give our investment the advertising innovation penetration. on drive our improvement in behind through P&L ability returns us

increased The health. investment improving also is brand

health brand a higher month, growth next CAGNY inflationary sustaining less at growth strategy, key to will environment. is discuss to key pricing our management in be revenue the will which I As

year We by and of in of led will mouthwash. deliver offerings strong manual the with innovation another toothpaste, relaunch toothbrushes superior Colgate new Total,

in AI control strong driving the investments be XXXX data, will also invest We utilized ahead XXXX growth going in us growth XXXX. profit to spending forward. key additional give gross analytics which capabilities, Our to and flexibility and our in curve in of pricing to also SG&A

repurchases, through even Our paydown strong levers EPS expense or for us growth interest continue business additional gives invest productivity. and lower in for to debt our as growth cash flow we to share

deliver drive So we to deliver entered and total consistent, and on confident return. XXXX in compounded guidance to shareholder our strong in growth, ability our our strategy

So you to with questions. that, I'll over for hand it

Operator

Instructions] question with first Morgan comes The Dara Mohsenian Stanley. today [Operator from

Dara Mohsenian

clarity bit guidance to wanted more the just a mid-single-digit QX, the pretty around relative robust impact. XXXX is to for considering FX growth guidance all-in So low-single-digit onerous EPS

implied So strong a just number you what gives FX in local such confidence earnings one? growth,

Obviously, line. of then key quarters. weaker we And we driver seen drill maybe is specifically QX growth. that's into have in down recent two, earnings the than a OSG can

If the slower you X% in for than close range Argentina, adjust to that prior private the somewhere label probably drag, OSG pet pace.

points about guidance positive QX negative. for your uncertainty So to XXXX, highlight relative X% of level just are to and as either the what maybe that maybe X% result, we of confidence or key the think

Noel Wallace

you. thank Dara,

So start with guidance. off let me the

delivering we in are to believe to to well my upfront dollar compounded alluded I think continue we positioned earnings continue I consistent As very comments, growth.

as about to couple our the as talk fundamentals looked That's into a what a go balance guidance, about and many all much last that's strength, do mindset over much me we sheet. I've frankly, of XXXX And how was we of you at our in building that back flex oriented pivot growth as that XXXX, very of we've plans, quite strategy inherent done. times our -- reflected our organization? to more -- you get the heard into exactly You've P&L P&L as we more flexibility in years. well lot the spoken about we the as and the through that

both growth saw balanced growth across continue We year, health And forward. in all I proxy seen XXXX. growth will we'll think, businesses pricing is, in a consistently price. you've volume deliver our line categories to XXXX, of believe terrific with volume the we balanced top throughout and the continue building that and year our So which those in we're this moving for how of and focus

it's So of in really end context of X%, good the to we peer will that. the reflected in overall. it the X% think the group, health feel in the at of continue business comfort be We we top to have our and about

consistently couple You last over look up years. the of market shares at

performance up at You look the consistently across divisions multiple being quarter-to-quarter.

the of is health there. business the So

we mentioned, I our of the move P&L, continue to I capabilities. If as invest, down ahead

we allow that years put couple consistent in So to that capabilities a earnings think growth. will on the money line of dollar top We've lot more focus the sustain we us building organization reoriented really of last to and that growth that opportunities foreign within got a for to ways other with we the No and offset believe continue we're sure P&L. will to we've be to making exchange. looking more areas offset question headwind, but

cash generation to. another strong The look to is area

P&L. have flex we the to consistent margin working in below capital lowering the other more across our We more cash, operating about areas have ensure line that been building

overall, place. really I is in think good health the a So of the business underlying

to honest think business come first And look exclude the more base quarter we market actually -- a private number. given our growth being think business good in way we if environment quite to look in your the I Now underlying you if in organic you the which at label really is is the -- X% question, strong. X% fourth X.X%, current back a almost

side, we that China Now X% in business. but private of us, the exited Europe we label. volume good X% growth. feel ahead have overall, about. plans behind softness to -- particularly on continue excluding as A opportunities saw continued Particularly the quarter, softer saw see some pretty parts softness bit of the little fourth to our some health in skin volume develop we good we we almost that But quarter, the the we of in

to and talking what that's last over the more more quarters. been you seen normalization, consistently in to from we've away couple about volume we've a P&L growth, pricing And growth of moving the

quarter, getting headwinds that XXX the It prepared We exchange did in of Argentina than had pricing, quarters we the which have and we talked already pricing in in about we're Latin announced positive X less comments. year. we've the points our are still we've here first more less was basis foreign seeing first the America from some of quarter. But in the offset pricing to in about

the we business, to categories underlying is market back it's strong XXXX. back positively better for see have, good that shares balance move seeing the confidence and a we'll So through come the I we're brand stabilization health the been, we the inflect growth a of than the place of much as come sheet, overall, P&L and, to in hopefully, continue if flexibility,

Operator

question The comes next UBS. from Grom Peter with

Peter Grom

to color years happened. we going in some that the hoping on here. just performance gross couple first the was to get Obviously, I the kind the that sequential it and was time from have in continuously, quarter weren't cadence of but progress a So of margin hasn't

would So be versus fared kind of I expectations. your just how curious gross margin

a expansion, path could -- funding I that, helpful any just ahead, if would understand year year strong another it could very the frame ]. expect And if just just in share but would considering exit was then the within be [ here of can from rate the And you what then you on you looking you curious growth be 'XX? just given color

Noel Wallace

significant me level points versus with ago We're just foreign So a basis XX year exchange headwinds. here. let up set us

overall, the about exited but good. through the Slightly as driven XX%. pricing, P&L And by strong again, impact we of the productivity the that funding moved I through below where we another very growth to think, be given good hoping were north quarter, continues So the feel overall, quarter we pretty margin transactional underlying that.

to and to about ended thinking we taken I we about pretty So in pricing you confidence be begin our little mentioned margin earlier, the will foreign to turn gross on me as Stan, we in headwinds seen. the good over color give feel of who more able have gross a America to grow margin up. it of XXXX. offset But that how where trajectory exchange bit were let some Latin some And we've to we

Stanley Sutula

Thanks, Noel.

the fourth basis and in So we did above quarter. up Peter, we all XX X mentioned XX%, points quarters we're

happy we're with margin So expansion. the

look will expansion. that ahead, And be mixed. One we going think, to go there simply help to several is items we are us as as drive margin I

and positive those more businesses. grow our a we Oral we get of Hills Care, are As X profitable we grow mix as

combine you benefit you less margin, private with has that get forward. a very low going a mix label, So which

our Funding Growth mentioned the You program.

been Our We've into this run by 'XX. teams. productivity many for planning program, the well heading long-established, now on months extraordinarily

Growth. the So I think Funding a good off we're to on start

capabilities in as better investments the management, of our our we to call and new revenue mentioned, of we've revenue Noel in One capabilities, we on we X.X, management. growth made as have drive some growth is what performance go

pipelines We will across have XXXX. the the business good help margin And coming those innovation expanding us with of I in. in combination think

as that see the confident private you'll go in ability we slowly to mixes but expand are in off, through the Now XXXX. label year, margin

Noel Wallace

raw are And be Peter, watch would going seen other where that stage. we But this to We'll material environment. carefully. one visibility have that raw add, then better we materials seem moderating to how entered XXXX, to we've at a relative more

Operator

comes Goldman question from next The with Sachs. Herzog Bonnie

Bonnie Herzog

necessarily the last had Pricing in benefit, didn't was on half business. America negative segment question a year. actually your volumes guess, I year. of North the back And then I

think from to in then assume context, to compares that So I mix price that different market? the in this across categories your in about your promotional is versus guess North as price it could And how environment we you relative how about we contribution volume And it should expectations touch year, the on America? think negative? reasonable remains the contribution and

Noel Wallace

fourth business, of underlying Bonnie. as of strong second helped certainly the talked health in volume the through quarter had we the and in about filter and of to we improve kind back we we price the some and move are XXXX, made the Again, to the price adjustments which the some Thanks, we've back the have U.S., that performance We'll think there. adjustments as through of see quarter. half taper but away those continue the third

Skin the -- exited in that skin year would now say as third remind volume the been business also improved in quarter the North a we I of price quarter, added the North consistent lot China, that year. in I in Health a in of our that in would we volume softness there. coming did the segmentation theme we sequentially out that as and that has everyone we both And which pretty see the and America. of throughout business have includes price fourth America

as take the sequential and of North America, overall, had mentioned, performed North shipment ex well. business, last Care we improvement. across quite very saw Home business. skin if Oral, year, from Personal But some some you timing underlying the that saw, America benefits I versus performance this strong volume the was We the and year We

we have being We're our and do still said, continuing look the U.S. that strategies to work do. posture But to go-to-market our more investment in at

continue to a to company, invest the business. We that opportunity strategic continue believe growth we it's for in will and

categories, latter behind including saw new headwind the we're first excited hand, particularly leadership that's some to in part in the which have year. We of some been shoots, the liquid some in thinking dish, The about us in which had of categories, of green particularly strategic soap coming and toothpaste, year place, the the of the some that. of exiting a

good where a standpoint. strategic So and we growth from are we standpoint feel a about from

overall, will through So pricing move XXXX. of as improve, back the particularly half we

Operator

comes question with Teixeira Andrea next JPMorgan. The from

Andrea Teixeira

I what if on can expecting, pricing more to FX-driven pricing. the you the bit you're front, just kind Noel, a little like elaborate wanted of on

Total to you America, in regards volume guidance. And of into that where driven, are mostly it of took mentioned to the into seeing you FX X% well, You I'm What's related that and you're on of like going XXXX, Europe, the seeing the volume how sorry, the green terms seeing? components some areas mean that kind be that Hills also you're if Latin as in be you it's going on you I anything places shoots if volume, see And pricing. the to then the seeing fits assuming positive the have to is of to -- well. the to on in your where as clarify, being just the you're algorithm most in some the Colgate like X%? from strength the

Noel Wallace

Sure. Great.

foreign will So the But Obviously, offset XXXX. offsetting let is our more pricing Africa be our in continue other that continue very the the driven markets we question its back into exchange, first. world, me opportunities Latin see value-oriented hand, in in that and pricing and about particularly strategy, moving some exchange back to significant quality of other taking the XXXX America. by categories. some of year. Europe, see we'll innovation drive headwinds into there we across take pricing talked value on a are across the the foreign will much improvement I to which and That to innovation deployed throughout and the was pricing successfully

of we're some into So bringing make we sure to we'll the pricing category initiatives value-oriented that continue through have. the that

increased key that will our And to theme as be mentioned, of for a as Stan divisions we continue all innovation. our

getting from incrementality heard You innovation. talk about we're the our me

and accretive well through its a So as P&L, about innovation as in both we from standpoint how to footing standpoint. to solid ability our much think feel we growth more a we're margin relative a be

volume, balanced terms to year. volume In of have continue the across we'll

Now a we've in organic consistently more We're excuse algorithm volume-driven more expected me, divisions. algorithm to a a our from on said organic, of that's organic volume-driven we that and shift that exactly pricing-driven all across seeing happening. what's --

enter improve categories. the XXXX on softness little consumption Hill's on seen we start we've to category, as but A the

but move well. inflect but we'll performance as an that get a see category a into flat category. But positive So we'll that's that ultimately, through in little outstanding later, bodes XXXX. been And we softer, Hill's hopefully

across come board. the will volume But

volume North a America America. question as contributor, good volume Asia Africa in no and as a has continue will well been great Latin contributor. to be

to broad-based going it's across board. be the So pretty

take if back our moment continue and, our regions. volume of If penetration, across -- you focus a to positively and look look testament a at step our a for you volume shares inflect the very to again, shares most brand on

were years some to the better And the penetration we support underlying of health that's brand, So in drive by we to putting continue ability the about than business. driven behind ago feel the much very through that initiatives they that are which X the our we're place largely given a good of have.

Operator

Kaumil comes next The with Jefferies. question from Gajrawala

Kaumil Gajrawala

talk you Hill's a we later. mentioned Maybe Noel, bit you about about talk would now. it

bit cyclical? going If particularly -- a the you something be with useful. talk Is Is more there in just what's about else volumes, could would this Any changing? on Europe. anything details

were able And more with then what means, now just perhaps you you're on versus that to what before. what RGM X.X, bit a little RGM on doing do

I think those be would helpful.

Noel Wallace

Great. Yes.

X So or again, execute strategy Hill's we against that continues X outlined ago. to years really the

so impact by on about label. the basis a the the from label, points So private drag obviously, was to private impacted volume XXX impact

overall, X% So think, very, business category growth a we that a right in on now, strong. flat volume very roughly is

of strong with pet other Consistently fastest-growing had historically, on growth, channels. one start brands shares market prescription share drag and I'll and back continue Hill's. a across been we on business that for specialty, on diet, in which growth off to see the margin. to well the Great bodes e-commerce growth mix

pace So the opportunities those as to seen opportunities are very, those will about with as growth cat see see ASP which as continue we strategies, opportunities where And in the feel And right executing well. higher segment good through opportunities, and pet, wet, fundamentals more the well our to terms as move opportunities translate volume of the very execute a we about to be segment how in in the we talked we we're on that we've against expected forward. P&L more we business small overall, we in some talked of is place. we're

sure shape world, the most be doing about automated exactly Tonganoxie optimize better well. we much a the really making our which in facility go We've that, network, continues The we're our to supply ramp-up, as expected. will chain as is that and in talked

after So anything too we're don't we to to have good about, that was very we now offset. it's growth our strategies like not go And be category little obviously, where a index We where a feel segments innovation we're capture unusual soft focused those help we're us will growth. worried making place getting that we overall, Europe. place The sure fair in on actually that share under and place. think in but in in

where that feel context the XXXX. within most we of and and overall into as move we the So we of going competitors, about category, trajectory of outperforming business the are good is very our the

Stanley Sutula

So digital me and the second those. around And and those you've on the few about data, some design investing And comes of heard things customer up capabilities. really let product, X.X. what and And we market last and to skills to pick part great feedback timing. over That's and in capabilities question the home promotion us our X.X. RGM returns leverage years like analytics talk to strategy new by pricing around come strategy we've in those really our seen in

taking So with effective. allows combine be that capabilities market. an talented new to skills you new When we that more workforce with innovation bring it's us already powerful in that and here, them really it's enabling to pretty market,

is So both contribute to to continue we're and line. margin to that top comfortable RGM going the

Operator

from Grundy The next with question comes Kevin BNP.

Kevin Grundy

broadly. could advertising you hoping comment was I levels Noel, on

the guys here years outstanding you over done past of increasing So A&M couple levels. of have job an

relatively bit, and right? expectation advertising So with going levels flattish by is to sales. percent said year-over-year, maintained things slowing But a margin Of a been increases. differently, down that as marketing of the course, now that's gross be funded are

percent in market top you sales were as of growth, weighing could relative increasing the you extent how accelerate as gain plan further share, A&M the levels further together to a line So putting you're potentially So on because been earnings the so to have you've and returns increasing? be front think, just I and been would years getting broad that margin further helpful. context, growth recent strong expectations,

Noel Wallace

Kevin. Great, Yes.

obviously personalization than around lot the to that find that and gotten media top tech with to much line more of programmatic a we've and we a in platforms I ways are we back. data that continue here precise through is think optimize be comment to and our spending really the we're were focused place years very with work doing better our

up year XX% on you X% As mentioned, of top this quarter a ago.

we're healthier much So a much, in place.

assess around And than continue if which metrics important of We strength or and inflections have our in is health, the but advertising that to ultimately been. use not, on to unique working place strong we general, certain we've to you opportunities of take we proxy of your parts continue to the on the world. see all the much whether a is brand do brands the in very improve world that, better most

spend. is for driving that our more being see what opportunities and in I we choiceful advertising far And mean Colgate more of growth franchise. growth We're terms with on deliberate category the by that the

to spend of us we're but data quite back and get in analytics the certain And ROIs so talk think, ROI. I years couple earmarking last a better a have you efficiency into over where of parts digital on our categories really in we've and been, improve specifics, I much we're a in our successful to world lot seeing how certain money lot our of using can't transformation and continued sequentially. the more unlocked and has heard

precise we we've think more really So growth it's about the how we move that or the how spending optimizing across that with as we're and and into that money be money, about more we board. tactical continuing strategic to had the sure on use make and XXXX, using

we're efficiency, get to spend will where making we going it the return best and optimize technology So on in sure investment. that areas to be the find ways

Operator

The next Bryan Bank Spillane of with from question comes America.

Bryan Spillane

would category category we're geographies. where in kind So one, XQ? So forecast is perspective quick like rate sales growth trying your just of of just, kind just relative put I the Noel, exiting expectations to to relative stand growth get into to on that does One, where just to for context, X% as to the growth your X% 'XX I things. organic X guess,

just tariffs. second, since And then it's headline, the topical, the because it's in

model, this just topic, some tariffs, to thinking relative our anything to know. it on just attention all through But things we going it could I remarks, us be basics thinking some be. a an prepared we're don't just about evaluating input would that the as about we're talked as I probabilities about run size how paying you to because put helpful. some once should try be could think as you give to you and in know, we're bit

Noel Wallace

part take and Brian. lot question, about chain we've Great, Stan the truly years the couple the that of over I'll and let of of strategic first I'll our for talk work optimize a doing resilience great been more supply last the to potential disruption.

So but as category news. if is seen stabilization. saw growth think is over good right we of now, news think good seen impacts stabilization I of the rates categories of moved -- the inflationary last the we've years, categories through -- take some which pricing more the I the We more additive in we've X.X seen the and a a I we've falloff

categories So to in X% which X%. we general, in are growing the categories compete,

share will we organic to ultimately outpacing the X%, to X% drive growth. penetration categories and and So algorithm continue our relative of brand be to

outpace overarching is categories continue in the the to we've believe, pricing we have, right innovation, the place fourth quarter think categories. some part the that based of the and and seen the mechanisms in had the the we I seen quarter. to into third fall-offs And So of right comment we on early some the in stabilization

Stanley Sutula

our me supply tariffs, not try strategy. tariffs to included in put any in in we But On the potential chain let our context said incremental of guidance. long-term commentary, the as we've 'XX tariffs

years products manufacturing as cost some can to across of the local aim we into formulas flexibility across as few existing about We be of our have standardizing use markets. primarily, of long building material. last So capacity the much spent necessarily the global distances better more shipping and rather building but alternative as sourcing, capacity supply making chain. the It's our more well not

pet business, So last time. of increased meaningfully care the billion supply the chain, than over in food U.S.-based wet U.S. we've in importantly, XX% number our manufacturing years X investment Personal, facility, of Oral, along with our $X opening pet almost purchase by between the Tonganoxie we've our capacity, that the of invested food over more facilities our Home

So material investment into capabilities. U.S.

so When me in outside plants. some could our at gives a consumer SKUs actually machine We from more but philosophy of let China more of capacity we capacity, to meet us now we manual example plants, customer 'XX, capacity give which additional available can And in needs have in as had have And we geographic which toothbrush period the we can better an enter we flexibility. improved higher limited And we of flexibility produce were this potentially co-man SKUs same more produce with also flexibility. amount locations. we more -- of provide and tariffs.

on would because on come the planning tariffs scenarios, impact you that would materials, for it's finished Now also we of a those it's on like as do and not working China, raw acids. some we're potential or Mexico just primarily of Canada both predominantly we're that On products. for produce which our impact be ingredients and and products in the raw vitamins tariff materials raw materials, toothpaste, multiple expect, specialty-type chain. amino may the Mexico, plans, U.S. play supply mitigation can of retaliatory we import And or limited amount into

short have and we're until necessary But if we So very midterm actions. tactical not at more term, looking in term clarity, get long our included guidance. we anything

Operator

comes with Raymond The Olivia next James. question from Tong

Olivia Tong Cheang

of pricing to wanted the the be to you what I take implications QX. in volume the through you're decel Great. in planning volume expect talk given to

price other push this. regions you or or implemented through. you're magnitude And already to to make macro If whether in of the planning dynamics you've if difficult whether on pricing, talk competitive order LatAm to the could that more

and necessary, your advertising and ability, and flat -- What being being advertising about promotion? if promotion talked up to you pivot just then And about between up. to

Noel Wallace

latter So think, let take first. spending has The of the been, quite part the promotional constructive. me I question

we heightened some fourth the where seen competitive pockets saw competition have increased one India We in in spending quarter. was of activity.

constructive; across no You probably pretty press seen the less quarter. constant significant more in in Africa U.S. as there. activity changes saw continues on release We've But the that India quite to the results. well. or heightened be South competitive some

continues So of have balance, isolated say we be increased we expected, our the addressed as environment I would pockets promotional with activity, some statements earlier. which would on to in

feel good place. in we overall, So a we're pretty

move is my pricing for promotion. planned to and our continue we expectation more plan guidance But in in from to But our that a that environment, you for you a plans for may XXXX. volume see

not American in year our carefully. in very in Relative mentioned, not in as or Latin that Argentina foreign some we'll our this anticipate may guidance relative I That did already continue America we've to of happen. exchange some may numbers. announced pricing, pricing headwinds, devaluation to the We and to another Latin watch or significant

We accordingly. that will adjust

that I despite is saying great foreign exchange ability which that think see dollar to proxy it's impact some significant foreign earnings in move the a Argentina, exchange. the we offset think we of I Argentina, did to saw our transactional grow as in headwinds through we worth we

mentioned As a is more do Europe I little challenging bit earlier, that. to

price adopt accretion line And So really overall. in we'll categories increases and meaningful that we pricing margin line. ultimately to driving the can drive and from strategy that continue some the the pivoted to innovation on drive value

Operator

TD The next question comes Cowen. from Sergio Matsumoto with

Sergio Matsumoto

might in terms demand does like Latin pricing current in I'm the inflation in how innovation? It's Rob any and operations the in that your U.S., with the does is the America, countries make the Moskow's administration of macroeconomic category? how does or Stan, you of team. local changes impacting And new Sergio with, headwinds change Matsumoto Noel -- that the

Noel Wallace

the for question. thanks Sergio,

in you XX-plus years. So America for Latin we've been as know, well

world our Mexican anniversary for been down Mexico long-standing June in businesses be most to has one in celebrate those us our company, a I'll milestone the to successful Mexico, in markets. fact, going which for XXX-year our presence and given in the of great is which In

in last couple significant the have we dealt Overall, America decades. of over amount volatility with Latin a of

And in growth so the and in we're that political quarter, that fundamentals were year-ago very disruptions with very, continues that X slowed well. due this drive we Argentina fourth year I fourth ability both number accustomed necessarily bit as year. to and our through be but business. the performance the that that mentioned earlier to offset innovation to America was a economic execution It have against seen didn't meaningful strong. throughout the and obviously ultimately was We've in of will our in and quarters consistently little this the quarter some that to Latin pricing the first more that category

those XX biggest take terms categories market with good absolutely I are how quarters doing, characterize of of and Market terrific had start if markets and shares those Overall, both up flat Brazil, flat we Latin in in But value shares. of or were we're Mexico perhaps Volume XX share. those or Nine both up. markets businesses. volume. up I'll those in X countries and and in shares our market we in are or X had markets. for America,

very outpacing to So business health our strong, we're terms continues be and consumption. categories of overall, of underlying the the the in

XXXX. categories, seems saw of as the that quarter as So stabilized business we've and in from have consumption seen slowdown, perspective a about we better little we third the to around But entered talked we've Mexico.

place, but various obviously, with continued good we statements countries. made think volatility the in are we're that terms in the exchange a foreign we're immune So not movements overall, of around and to,

execute control, continue making sure P&L. what can have the that's flexibility the and to we the through and business fundamentals we'll So against that we of

Operator

Carey with from comes Fargo. The next Chris Wells question

Christopher Carey

You joint had different India, in some venture, competitive markets globally, mentioned China Africa, Eurasia. activity

a but you end-market the on mention you're some some didn't you pricing out? on You specific called Can specific of America, bit expand been competitive some with more North seeing activity markets there's that investments.

Noel Wallace

of local as going of manufacturers, the brands some we the health of their and activity to players, do in to make protect chasing it's sure been address where we selective on Sure. unusual that, sure very Chris, We've we're as more we'll be volume that. particularly not terms heightened in competitive categories. the the are

market some a of few through strategies was that some But got of innovation activity to very drive year. notable space. of reflected to drive addressed and it of really we and some growth. competitive But driving activity share which around competitors in think the that, drive rational focus as we where most on and quarter. will we trade us allow increase the more was saw India modern move the India that markets particularly was isolated in a to will urban significant We've with retail continue in get the the the multitude world. the competitive stabilize volume. we a anticipate and We probably offset more good to good balance plans category in discounting

address to activity to. were South competitive more see as well in if Africa necessarily and some that sustaining isolated Turkey we're need we the but mentioned there. We we don't that guidance the itself through to year, prepared

unusual. terribly So overall, nothing there's

I where an we promotional would Europe Europe area competitive we're earlier, that more might As be seeing a and share we're activity, significant be where see constructive environment, consistent, see market heightened but well. you as growing pretty mentioned in

So place. a we feel we're good in

underlying us see and dollars, our particularly drive of growth most you to Oral consistently more important business in a for business competitive activity, the drive in Again, world. the can market continue health to if we're and promotion and seeing we value launch place that, in around the is innovation volume the both in share aspect Care

Operator

Bank. comes from with Deutsche Steve Powers question next The

Stephen Robert Powers

flex gross ask I guess I call of another It's year the least pockets XXXX. couple operating been, XXXX? investment. the increased curious to innovation gross You investment, wanted have to great to you to of SG&A, the focus expected the in reductions income last as of at stable just that, see and improvement I think sort be going elements on keep of but by shape you in is have the guess and years. fruitful to base about is up think, I'm digital, much about assuming analytics, data I'm you're Can that within of A&P to versus that P&L margin case investment? for keep how improvement going what driven other of Those about then enough But SG&A margin underlying of efficiencies. And up SG&A I talked investment AI. all do talked

Noel Wallace

Steve, thanks.

here I think comment again, the top is So yes. line

and focus was give And necessarily productivity bar getting good not the about what really we're a continue things space, we P&L -- the line capabilities. going our a place, more through feel exciting certain technology in in have items place as address, a what front-loaded continue raise we're we ensure of but we line the doing to really to to on there's continue 'XX to ways going find various and ultimately to the go so we going and investment we 'XX, we've launched was need While talking lot that having to we've Steve, P&L. the when catch-up, in of to in strategy in business growth well have been for And the the areas invest to the I we're we space underway some around health anchored come business, that the to, X items back of and be There will flexibility. through particularly data fund to that ebbs after years in to and the that. in have it us believe, flows more will drive to we all P&L. But ago. to And in that XXXX that play flexibility continue in long-term

sheet the do It's we as from to money, down capability well underpinning drive health consistency ways with as a terms brands an in we that. we're that up top-tier to of go to continue the P&L to a ensure performance the the have So shareholder is where meant balance capital the standpoint. going And value. and really put to structure of from and to of

we flows think, do. we the opportunities we pretty be say, But aspects that to them. year absence sheet And see to the will growth. that across ways of after will some years It's P&L. -- we the artificial best construct in as to way as over feel year. difficult the the is balance move are and overall, couple having certain an the and There So flexibility, go P&L very, the we about last through good of not long-term very the ebbs where to as continue having flex of the I becomes drive sustained we've is shown, we

Stanley Sutula

is, both I'd the just a for there where The dollars sake. We balance in look process resource sheet, cut our the it's add of P&L allocation, only do the budgeting as that of entire and while thing spent and every we and P&L. the not to people, drive business. we on drive at actually in lot line productivity, performance hits a to want we cut's time reallocate And

But in you capital that flex is the reduce efficiency, which this our balance business, when confident talked deliver guidance as ability drive working in sheet us net the our to at we're we And then ability it better holistically, that gives in our better payment back about day-to-day. the on 'XX. invest look terms, to we've managing debt, for

Noel Wallace

that's in the at shout here think lot a that, least from we're New for is best really shareholder using And the ensuring York, that I capital. return in our drive on money proxy I ways that example on to us invested to best as spending the selective, that return think, to XX%, to XX%, get good Stan have best and says, ROIC being is And a the going investment. very return where the drive in of we're back I

Operator

Lieberman from with question Lauren comes The Barclays. next

Lauren Lieberman

referenced strategy, XXXX Noel, starting XXXX. since you we're

add guess, a talk Will of the And on are if working? curious little you really still bit could the that think pushing a maybe So you was to would kind areas where thoughts leg? keep opportunities of are to have next you I been some you what the What announcing you on things XXXX I strategy? have about, areas be that list? that

Noel Wallace

through eve we're really I'm to tirelessly year months. next we'll Lauren. on that. Great, the through strategy fine-tune that. here We've the going XXXX because in the of organization working couple last announcing be our the been smiling over the taken with of that Board We've here

excited. quite we're so And

the we for spaces the sure discipline the be company, tremendous credit the growth I opportunity ourselves around and to sure order around mean, has in excellent, on in of the the the continue making investing strategic work team overall, continued potential we're remind curve to we that have that, and give to I there. think that that I planning been get and for ahead

And as so that's what the strategy. exactly we XXXX unveil do we'll

had Now to new. temptation and throw what something a there's always put out you've

health Execution us. to important things to you the would about the and is our And up is outlined our move that about leave consistency about of really will we innovation, strategy focus expansion, consistent that of with margin I our productivity about the we continued optimizing all brands in as plan. really mindset, the the us. think launched be is spending we've down as better XXXX line growth and important into investing XXXX I and gross about the P&L, efficiency, that

up to areas we those. will innovation. we're are sharpen. one There that the through that can and deliver continue the dial Making be we great continue sure to we think that Innovation of incrementality getting

You a products had historically. more incremental me we big new coming the XX% big, from That's driver. about than talk heard sales

me heard after our meetings we've incremental in get previous reoriented incentive systems talk innovation. to more that about You've

So category launching sake it's not to just launching incrementality the innovation of it's and making to it's for the Colgate. driving innovation, sure

best well. where growth we're So us for but big see made, innovation optimize focus. ways really excited investments we that AI, be focus continue cases will organization, about an to as a we've on the business Data the use P&L. interesting through and and all efficiency most training to will both be -- in That our the the

to orientation products, behind will orientation professional and continue heavily drive and ability strong brands. to premiumization of our our And our on we endorsements look rely at you as our loyalty ultimately, advocacy and health the of

Operator

ISI. Ottenstein The next Evercore question with comes from Robert

Robert Ottenstein

follow-up. quick a just First,

You out prepared your in increased price competition China. called in remarks

on wondering elaborate that. I was could if So you

the on may of kind importance. to my also on a you Latin if, perhaps How side you marketing wondering success you compared what the to of size in make some early sense defining in doing main are successful? first, relaunch? reads total Maybe question America? then the be so And And we it can relaunch. is other magnitude that just I'm on relaunches, have differently

Noel Wallace

about of the We I'll just But in which a to where We specifically. anything And in increased pricing. seen that's I our Asia talked clarify. competitive Darlie mentioned about softness aggressive China business, moment. perhaps address really in didn't in we've related pricing the we believe specifically -- just me is some obviously heightened most pricing Let India. don't increase on was

was with Overall, is, positive frankly, balance, is the the our Colgate on growth would Colgate organic say, China the in well environment our a feel there it place in is The the continues that of And operate quite organic because quarter. performance well. lot in that that quite ago. delivered quarter, single-digit And with to new up peer years business to pretty pricing China, you X in fourth high extremely see we've I extremely the comparison group, stable. that business as We we're and in executing good. strategy alone we put

continue and medium go-to-market short continues we our opportunities accordingly. will business be Darlie be in that slow we growth, the feel to Now We -- to to But China difficult be we're to getting be many the the competition seem for a challenge, changes category to in XXXX. although But term. feel outpacing continues a in respects. China overall, although some still have And better. it's we we'll address

we will million again, or that, of XXXX. term, long $XXX market and will million by incremental into consumers for put million. less middle-class China China opportunities But probably more $XXX company. than the to strategic more India the double value India as $XXX growth

and investment a in leverage business we obviously that So the important so keep that the profile we growth place the to again, real can long-term health of opportunities, as forward. move

is best would launch. speak. America It across the and America Total America. America markets rolling Total, great out driving in from be Latin and Asia midst for We're on as we're We America that our quarter terrific and in performance share launch, North it the launched we around in core Europe across We've seen the Latin Latin growth Latin specifically proxy. that Rob. the rolling fourth of our world.

is and toothbrush only what superior aspects to before Total than prevention, science the importance mouthwash, not formula and meaningful a again, Colgate we of really consumers but the market a in we've in had key our for and really regimen is intended real elevated the they're for and category a better the toothpaste, opportunities upgrade creating getting growth in marketplace for to and and formula, trend the the in And the across focus into the on of obviously It claims. toothpaste. which prevention looking speak amongst asking a prevention

about very -- we and to in seeing across that the overall, signs intend that the early So translate excited we're world. we're America Latin

Operator

from with comes Korinne Piper question next The Wolfmeyer Sandler.

Korinne Wolfmeyer

I'd X innovation, pet get like on like and we more the be to helpful. just for both next from that on rationalization, that cetera? the business little nutrition color the bit expect Any pricing, of cadence over would portfolio et a quarters kind should color the XXXX,

Noel Wallace

the really, I fundamentals earlier, really mentioned the Yes. business Again, the strong. of Hill's, as are

getting let continue that in to a category, environment And obviously, the talked extremely but well with Now little not certainly about we've nicely, up that, to private we'll balance trajectory label Stan market the talk that's we've to private seen as XXXX. through the worse. any believe, we stabilized, execute in category slowdown about shares grow a ex little of impact continue label about of we we bit I'll see bit think -- as volume XXXX. continuing and we move

in underlying But focused on part if obviously I business, I the cat very small the which business dog take that excel just strong to business, in very segments. is dog and opportunities to the segment the wet the of for small a again, segment, mentioned. the fastest-growing need We or We pause market. need excel have growth we

more have business sustained focus a We obviously the real to in continues well. Europe. perform But to back And get overall, that. we growth to on need

countries of the world. diverse mix We around in operate portfolio a a

those We markets. have on the to ability pull

in well, And I business the from North to market, execute America, the as a Hill's largest fourth we quarter. move we think had XXXX. our into good continues nothing unusual extremely expect quarter

Stanley Sutula

and and well is by new coming for at on will Hill's to expansion conference, was which business they're really the And business. And drive is in down drive they in the continue think category slowly based wind-down have in position North will market, VMX the numerous areas and private great of will think nearly to have the opportunities execution a the nice just but extraordinarily I with team. the the But that down line, expand. to I conference, improve veterinary to go a that the we really after done positioned, innovation where the both well enormous improved vet there conference. I well really techs value that think was received time. good and that expansion, margin team, XX,XXX we the And with bring. importantly, with attended Hill's attending top well think innovation and explaining that flattish they have label America we vet booth through very it's They also,

We've also science invested which center the nutrition over and I the to innovation our will into several pet bring to years behind last our continue diets, market. think that

'XX. got profession We've U.S. think and set. the product I a opportunities market positioned well heading is science-based driven abroad, Hill's So and both into in really expansion

John Faucher

And we're one point margin I there. is the can Yes. that if more add seeing inflection just

we've had years you terms Noel over now performance about the what lot talked Hill's. talked couple truly margin prescription So And private That's that had diet, past margin in begun of business. to that underlying It's the has us on of just not a inflect about mix. at seen that's is the cetera. to the And improvements label of mix wet, really some et positively.

we Stan standpoint, and line as a So can the mentioned, this continue back to business. invest that in us gives it bottom confidence really from is inflection there the

Operator

comes from question with next The Astrachan Mark Stifel.

Mark Astrachan

lapped I Hill's think this have In that volatility? of you we bit adding a of Is quarter, to the volatility opine there's pricing bit decreased a seems food the you think minute. to been the seem people a little of which ago, bit would little in we I volatility. wanted category talked as stay a usage is but taken? on for been Years all comparisons, maybe it category whether it out sense. I about ton a you business a anticipated. periodically, pet the it's than like COVID to that's food coming saw bit of more make pet kind pet could just adoption on or guess what Broadly, doesn't

Hill's talk give just how want business you could And of I kind the competitive least categories by then don't just of the at over There's that adoption you you to And between you about if on on your a the some U.S. international. environment. more just of bit a mainstream. more time? specifics, think geography, strokes guess broader think clearly smaller the just been also of do about becoming and impact maybe specific the the comment niche performance elaborate to broader how And business and about U.S.,

Noel Wallace

and value the swim regard importance be of here the think into in premium we're helping I retail and pet our this the outpacing is see We one. continued more in fastest-growing staying nutrition, partners. that science-based the our So lanes drive to category part category to on significantly

So scientific, about the owner Stan to to that variance that on will moving value and differentiation drive focused a talked the to innovation orientation continue innovation continue be pet and therapeutic forward. back real

to that yes, profitability as back and probably Yes, about significant there's we we're afford And that and still start segments. category will ability and been expect segments growing. some continue potential the those P&L. is positive, stabilization come to The we'd flat. for where We to half the volume we continue XXXX. upside like look our through grow mentioned But We category. it, towards to we business which in to to the of our talked I've see want inflect that the see drive price -- at

as fundamentals shape in So P&L opportunities spaces to back. than in continue speak, so Stan a profitability see much improved, growth the a John noise different of we we're were lane, the we've the aspect. to we and for mentioned, better focused nice compete, things business as the and of the the category, are years growth lot strategically, and they sustain lot very underlying A in where swim the on in to category. But happening want that

Operator

question today Filippo last Falorni The Citi. comes with from

Filippo Falorni

the Noel, balance flexibility the sheet. you on on building but talked only P&L about not also

of just parameters increased for share focus buybacks M&A? big of you areas on your for considering picture, level. us and appetite then can And strategic allocation curious So capital M&A, on remind and potentially share the kind

Noel Wallace

Yes. Filippo. Thanks,

And and return growth back our our business again, ability business capital through in back come behind return top the So the capital, and growth. invested as prioritization around efficiency the the I'll to P&L. drive again, we're more invest investing and drive on seeing to great is line allocation to a savings more we back

dividends. Second, the share repurchases and

our moment. our I'll obviously, through you've on numbers. strong through TSR, top-tier You've let only seen focus talk dividend ways our the but seen, in to that cetera. our shareholders continue to policy, not to maybe ability of et the just to But Stan reward the a find earnings, what driving growth

focus to we're cash buy shares But continue capital like on based to make a and overall, dividend working basis. feel appropriate on to we'll shareholder different allow drive to better generation overall, levers consistent in strong much to approval. providing return place in So we're our a where Board to invest to us sure on continue we

Stanley Sutula

all go that, annual through our and that's we growth, have a and our we execution, margin that budgets and cash. When theme underlies

record cash businesses. achieving So us. of $X.X cash for a flow we how is a that of fundamental flow, part operating in each run billion the cash And you've in drive seen

to direction of parts to that for helps because invest we to shareholders, those see us. multiple else and want aligned drive look Return the might which invest resources. off strategic Noel we long-term can gives then business. our maybe right value M&A, a give that That star where better the the at stayed portfolio in to opportunity allocate that said, somewhere that, same, that's us where But we as And to what north as for ability and that be forms. us come is back in the the

$X.X we And enable we delivering Proud is net of when did allocation, believe pretty to into we shareholders think did about And team XX% we a that was saw share great the dividend comfortable year ability buybacks. competitive. that. we're And where We have ROIC over with year-to-year. that our 'XX. billion up to starts this we you long-standing capital that And and return for to cash actually it a the the are. drive and with increase

Operator

The last Redburn Lewis Atlantic. with question Edward today from comes

Edward Lewis

Yes.

incremental the appreciate the see skin thought spend I probably positive we support helps Europe? positive And split it where know has price. confidence out I the move a America I seeing. you accelerated with give be to a necessarily don't that into going, balance the does change much forward? marketing then into of performance was XXXX. there. these is what of at North go you looking notable still, and I growth both accustomed how of trends thought Just to the able we much volume European the you but that's But how quite gone marketing to were to from sustain bit delivering as

Noel Wallace

fourth up quarter growth Listen, coming because off with year-to-date and performance terrific had Yes. strong Thank of as all inflationary seen hubs a the we're in balanced pricing but you. in we've the XXXX, I'm and before pricing, Organic we finishing quarter. mentioned, glad getting what strong see, Europe, the another Yes, pricing we some a of that. growth quarter. volume you they are for across

orientation. RGM maximizing our I markets. XXXX again drive a our products real strong think a XXXX, that into see and and testament those Likewise, of our again promotional really pipeline in focus in value you'll how more more analytics oriented back on to innovation, categories, ability in we're price spend the and to the

category at that the drives our performance price margin advertising. time. Good same in profit sustain and critical the to So operating is the

to was sales XXX up about basis advertising Our points.

the measures So lot of have. we again, health a that brand driving

Colgate Care we Europe, on share in fourth our of most the behind We're and Oral geographies. what's the pleasing points And in performance exited high at XXXX. a elmex. record in I we as our record is XXX business, particularly key And some the were were where up basis think we shares market share versus saw now market particularly both in quarter

across And driven organic growth profit we good market and sustained a the that will to very ability operating So our health by drive categories growth that given in continue advertising of Europe. level feel drive to of about business. and multiple the be innovation in

much thank that, for you again. very your questions with So

an down improvements people to of team. for in is and our Surpassing incredible The which end seen the started, me real balance of the continued continued our company. business thank we've and a organization history the you health sales in out I a day extremely Colgate for there. and where world billion milestone profound day working the first testament Let is an in and volatile is P&L in sheet in we time the the have up important to the $XX XXX-year out that

them. thank And to I seeing look I Florida, So in everyone CAGNY. forward down

Operator

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

disconnect. now may You

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