PG - Earnings call transcript Q3 2019 | The Procter & Gamble Company

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Operator

Good morning, and welcome to Procter & Gamble's Quarter-End Conference Call. P&G would like to remind you that today's discussion will include a number of forward-looking statements.

If you will refer to P&G's most recent 10-K, 10-Q, and 8-K reports, you will see a discussion of factors that could cause the Company's actual results to differ materially from these projections.

Additionally, the Company has posted on it's Investor Relations website, www.pginvestor.com, a full reconciliation of non-GAAP and other financial measures.

Now, I will turn the call over to P&G's Vice Chairman and Chief Financial Officer, Jon Moeller.

Jon Moeller

morning. Good prepared the today, in upcoming our straightforward a Paris. fairly and quarter Deutsche remarks keep reflecting brief fairly We'll Bank Conference and questions. We'll strategic fiscal comment headlines, before update areas year your provide the guidance to briefly turning for result focus on growth with organic line by X%, sales strong mix. and pricing was top growing driven January-March volume, Oral X again Care, teens; Care, the and Home and grew high Care, categories Fabric Care Feminine organic Family skin sales; each digits. grew XX Healthcare in of and care Care, singles; grew personal Personal Care Hair mid-single largest We the sales delivered strong growth organic in our two markets: U.S. up China XX%. X%, up up Organic XX digits to of equal all or or in XX Top year five markets with ago growing growth mid-single was our regions six more. ahead broad-based, geographic of sales organic grew than sales organic more XX%. Ecommerce trends XX% fiscal remain fiscal share value country fiscal year, fiscal of or our XX% from last XX of holding combinations strong; XX% in Top in category 'XX. and Market XX growing year up to-date, share 'XX,

remain nicely. In progressing total Some challenges volume, singles. down each consumption, shares with each Care, do and sales though low Baby and Grooming

year also settlement rate In favorable versus core constant currency gross to addition exchange despite actual by was million in initially quarter deductions to per the for booked option deferred April came on commodity of sequentially tax still prior versus versus earnings up strong June stock were integration ago due XX a this to Merck, up delivered year, in including $X.XX, of A ago were effective partly Core earnings prior rate portion driven a the reflects on from around points. temporary core cost was benefits The basis higher increased core exercises share the up sales tax versus headwind improved X% the headwinds. flat period share currency vesting. earnings cost. in year $X.XX and XX%. benefit at basis taxes XX.X%, through to was option currency margin audits. per of earnings at period. margin and growth, per share, costs strong The addition foreign we On constant expected part very $XXX about growth; after-tax of basis, gross neutral SG&A percentage FX tax sales

returned consecutive of dividend more is the XXX of a balance companies X%. the and in of digital cash three consecutive P&G strong of consecutive repurchased social as paid in than top company, XXXth of years more announced increased and one free increased have the On due We core the dividend. $X.X XX dividends. only year a dividend billion of basis, growth, sales increase For a consecutive billion to owners, XXX%. On P&G. approximately for constant U.S. $X.X than has SG&A investments. and to dividends U.S. increase of sales cash earlier this XXrd annual pay Only traditional, billion P&G a profit $X.X earnings cash and a grew currency to was media with flow remains productivity share operating of the modestly which flow increased percentage month, companies years. X% share

years. return $XX solid dividend share, to the cash per last a annual over years, billion shareholders owners. summary, to $X.XX trends quarter, positive categories has In those currency across XX share and constant geographies. volume of the a cash track from continued organic to Strong share Over earnings per increased sales XX market growth returning dividends $X.XX best-in-class record share of and strong consumption, driving core growth,

and and against some address difficult a delivered these landscape. macro of significant All to challenges competitive while working category-specific

improve results in meet challenges and the to program we to disruption here. change still accelerate face our to constructive further continue We of from

we choices strategic where are important one As which drives in performance where you categories use to and choice occupy balance portfolio the two brand which more is profitable, clearly are and or made progress the one number enabling paying the daily our was categories In this grown position, of a strengthen company faster have making; than we're we've out. choice. focus several historically know,

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supply to Europe. nearly Platinum consumer-preferred basis Always premium innovation take strong look added with in Care about the driving as in systems addressing and retail launched We've across growth. P&G single of and and to XX, by Oral designed Care, a driving Western development, XX In consumer number growth market Plus Fairy delivered outstanding PODS. led retailer shopper with razor growth France, an Fairy Ariel one Care all is is growth performance lot We P&G double in up this to and to report talked Russia superior was share Razors keep our of with new products continues in a finish We to X is year-to-date have leading western growth month chain, one Feminine first Plus a number the which Ariel European ranked points is execution people, sales creating performance and Oral European unmet results the recognized incontinence new. premium communication growth superiority we skin has Discreet last to number opportunity tabulated category Walmart the total, Fairy advantage we're points the less Platinum Feminine U.S., trade against is one few ranked basis category upgrade, performance the UK manufacturers convenience. highest little share total offering auto-dishwashing recently double-digit In Always as of share performance and built frequently. including respectively. in mid-single-digit innovation, super overall P&G price the XX, in examples digit by XX% men growth share less SkinGuard a with delivers XX Platinum. position XXXX the aggregate which powered the over is earned few just like Fairy global value them and segment. category advantages results. few packaging in In and at X marketing, one a Year and X driver as the we Germany performing points. accelerated and Turkey. and usage, Care favorable organic point identified continue as our Mexico, a in Platinum the delivering market superiority; key sales Gillette's service, by who monitor product, were recently very Plus the superiority, pad expect country in the of a assessment sensitivity a strength increase more market. the and marketing, U.S., China, Let's digit quarter. care P&G. very than category the superior high category of Europe adult are U.S. in We drive XX the of for competition is led in and bit brushes. past Gillette little cleaning ahead P&G periods independent has about recently product the to areas. and consumers the of delight of growth was of market accelerated share of growth SkinGuard consumers organic key this Europe such on are months category manufacturer results causes growing a shave growth By just seven many Fabric our ratings; XXX dishes of over and need by local areas: behind strengthening looking published France Europe, driving of superior in fabric customer building X%, and year. Infinity where with is number each point for Always B the in consumer category. consumables. And Fairy the about our anti-dullness Supplier driving globally. building growth, the alignment, in superiority vector. up further report technology expand market Omnichannel launched In strategic China, number March Early of we After X.X build time Japan, growth strong growth

distribution, appreciate We've that first a this and what increases transformation. recently in decade, shelf, of Supplier by really Mexico, which Year also The China. in driven stronger by P&G at grows recognition and We time and of share of in chain enabled partner We view display named earned than supply similar levels margins earned record this improved U.S. creation Dollar. we've in is service recognitions and joint the and more Target, markets were by distinction Family Japan but us Walmart the matters a our CVS earns retailers' feature. value innovation as

positions delivery. the delivering savings underscores XX% additional our first $X start need drivers, maintained to our our years. P&G business profitable cost across including sold need of since organization and productivity $XX and productivity. The chain, the investments. to billion balanced potential line facets consistently we're has including We extending our built ad for macro four goods over advantage, all We're continuing expansion investment, it's bottom $X.X cost need company. see efficiency these we're media investing savings billion and and require in last the areas margin driving superiority While and with drive agency in down drive the media productivity making in a margin about program. the part program. solid substantial We're We're the ways highly of to Total of the to supply efforts, progress in billion in as more productivity and Through enrollment effectiveness in production improvement delivered annual cost. to will headwinds, efficiency of $X.X of contractor as cost working status billion of our is and offset second growth five-year a top which savings fees and savings. this cost continue more importance along We've savings eliminating nearly of

in tax Before industry, are only reflect among in Colgate the our healthcare. whose concentrations behind margins margins the in highest operating record

-- margin one putting the profitable capital. lowest of We're operating the and after all areas of one percentages with all driving industry progress with more have aggressively the highly in rates, below-the-line We ready, top significant driving cost productivity working tax savings. interest in near and tax significant of expense advantages, lowest us the in productivity cash and

X five supply than our cut the capital while reduced increased to Over inventory days, spending years, share XX dividend to past global transform by our and receivables more maintaining XX us days, program. repurchase needed enabling by we've an days payables fund by growing and chain active

cash [ph] supplementing mastery. X the the fiscal focus, We're structure, an years, win. innovation changes. effort, nearly dedication free leading organization's closure us in a to simplify combination on experienced net owners share industry, structure increase over leading development internal and rates success returning flow productivity, of last We're constructive align programs average accountability. shots our incentive of averaged hiring taking processes organization's We're making external and and to market, dividend compensation We're structure steps We're the improving to talent the Over clarify position we've of improve of of to share strengthening earnings and category and to to balance reported disruption repurchase. and supply enabled better data and short, to XXX% are XXX% through deal changes speed industry monetizing of organizational goal responsibility, and within adjusted new analytics with marketing; effectiveness chain importantly the organization headwinds, operations. and robotic facets anticipated nurturing technologies build all developed each constructive trade to enabled These us the leveraging design brand competitive disruption value agendas and one-to-one efficiency other. drive digitally to basis to or macro products; creation transformation process another reinforced growth on are foundation Together, they productivity, of on relative greater transformation with term. strategies. automation; even not more response stronger They're disrupting well build value fund internally challenges with -- our and a long mid from and digitization portfolios, position for and independent by superiority, our over mass building innovation investment; with

sales low know currency anticipated averaging X% within After outlook go, see organic quarters the are I negative core X.X%, geopolitical guidance we're A year sales should range, net growth hate the to all three This our additional four we increasing X% the the The range the market end of for acquisitions perspective guidance a is books impact middle rates, the We're per of All commodity sales guidance, points on must point it of quarters, commodity we bit earnings sales. on or expect of weakness, increases translates range. to with and a now the reflecting last currency than but up of three X% growth of exchange growth, on not end to to guidance on fiscal strong sales versus organic basis. cost and in-line range solid in points a disruptions range. below organic based EPS regretfully modest of X% X% share of XX% to In range three year maintaining up impact rates, X%. to current investitures XX% of this foreign Moving all year, over exchange. core abandon little a foreign to prices our have our growth guidance positive a significant additional on to guidance. which more We constant

are cash headwind in transportation the a $X.X effective exercises, now Factor and year. for now impacts unchanged, for outlook combined tax year expect We foreign tax Our the to option for exchange an XX% rate after XX%. above at of billion target expect remaining commodities, tariff we QX higher for to the diluted about X% be shares free productivity least going year diluted fiscal X%. XX%. flow and outlook outstanding our and for well our to by than increasing to at decrease We're higher by last shares of year XXX%,

record we spending the cash billion fiscal X% in approximately expect to and enduring track a share continues successful a XXXX. ago, of cash to shareholders, long X.X% of continue CapEx to of I of just this the over year sales. pay enterprise. and important expect within cash strong to be and measure minute in owners, dividends billion We This will $X this shares return significant a range most $X noted to ultimately of repurchase generation another of return

your response earnings We're a next points competitive to the but be expect year. profit on want to Over the returned years, in Only year has preview next guidance P&G our of the of higher the publicly with last top fiscal we more will owners. companies specific XX July more than a line cash XX, operating the the listed provide generated call we've strong XX% momentum until for cash We consideration. and won't but next comps obviously world. around difficult few created, share provide have three companies for percentage pleased

productivity investments sales but strengthen accountability driving presents our to these confidence Efforts we've to savings the to next markets tax earnings from and competitive commodities our giving quarter will this industry-leading To To of for results, shopping your land repeat we to extend tough unusual challenges. the delivered organizational take margin address improved in environment as had will Media our and to so remain enhance accelerate year, constructively FX we are year. superiority the line top growth being cash productivity us are into of disrupt I happy to here of our further Some markets volatile. and transportation that, unlikely to create transformed. retail targets. year strong up, structure we simplify and continue increase fund sit all these the margins, our to bottom of sale to and fairly With and we lead questions. year, I'm many raise results, change. external the challenges and line third and comparisons. expect ranges next of to industry, today, this our pace bottom sum guidance as head wide help drive

Operator

Instructions] from line question first with [Operator Wells sir. you, Thank Bonnie of comes Fargo. Your the Herzog

Bonnie Herzog

morning, guess going the forward that and your in Good context, a question outlook. on your there's I I on lot Clearly, Jon. In a have business market. two-part global

momentum seeing your FYXX range. your not raise to you on you your prompt First, did very organic did guidance. growth you're in the The maintain guidance, but EPS and business wide sales your

puts the You on been hoping really to especially little us I to of term, a more to start second, the takes line you key get not that? has sustain the organic top sales I and did this, on but down guess or of And going whether touch comps. difficult going would you're long key for drill your lap that was thoughts on This help. the able could then forward. higher to to a be over level looking question you're that growth further

I'm So accelerate, expect realistically trying to a to to to in shared confidence of and level growth more your going or is deliver sense I level you more Thanks. top a moderate realistic? line think ability gains guess your if then you of get do forward continue

Jon Moeller

Thanks, Bonnie.

year just just of line, current with year date. to bottom fiscal the lot On -- there's let's a start

So one prepared our go, I remarks. mentioned only quarters, X.X% we've in quarter at three With that's gone we're as to relevant. through

quarter still very to variability it Second, think there's view that's we to give even disruption, a a the misleading you go, competitive response, exchange, foreign and range. cetera, a one geopolitical a commodities, environment, narrow guidance in lot of bit is whether et transportation, with of

we've this at investment of very going within the level are be margin our sale to talked introduces high to in we're committed and quarter up to a that fiscal not variability. variability like degree land from point the on in things you've continue certain And to current not that's the superiority advance so and year, close last We seen a about have able it's that Boston as also tax of needed to importantly, and of but that. let we'll

mid-single problems sale that delivered how us most does is the little numbers so guidance the goes be couple have slightly a the that in of bit where land we right with better fiscal why think and will quarter the appropriate of maybe top we're Everything I fourth and consistent what and probable the we've quarter, I We've to that outcome That's So of end closer put range. range. think to overall? that. we up digits, said above guidance the year-to-date. gain opens have. the I view the probably provided A that the and closer bottom it's that we end fourth

You are at top really that currency go line the a your but core this earnings range. the per both the double gets question, the number next remember, not talking as end year we're for neutral raised line, year sustainability into to double and we in this range to digit well And digits forward. a on environment, -- just share bottom high the high about of

fundamental line top have see behind things to commodities growth delivering is what like to and the significant and that remain we've currencies been then So earnings significant. And the just that exists power should tariffs. we'll and happens

or of our the line, of sustainability increased guidance sustainability of of period terms we We In the strong numbers. do obviously increased with X%. confidence guidance that to a our top range

way, equation innovation consumers happens confidence all been available and builds this environment? done wrestling course customers the the to increased you're has can that think manufacturer be been us, value price and that with in play questions that of way that the to we're big a should One year seeing over successfully through. for and right in of what coupled collectively this pricing we've gaining I with the fiscal

higher matter. saw across results rates The and terms of that that innovation innovation, That each very is growth can in can't that our frankly categories, to continue in dependent difficulty. and success, biggest have highly sustainability shape. marginally that market, we're inflects across give certainly of on that progress expand market versus disruptive growth of that choice Kimberly's and that and You superiority up level for the on to itself deliverable should to growth able sustainable. sales yesterday. in will is that sectors if day-in, last effort five that grows of be the more day-out measure brand that categories talked, line drive though market we successful the is in focused even all deliver is do example in being If us the But we time we performance good which confidence internally categories top we a where recent

Operator

from the line comes question of Goldman with next Jason Your Sachs. English

Unidentified Analyst

One, margin Hi. which target billion that Good 'XX? was to to for of target. your will morning. is morning, end this about hold current it not the rate, Cody one It like to be savings [ph] looks has $X.X we the XQ year causing is your and below your everyone. This actually savings Jason how savings areas What at growth. of for your billion should come questions. seems in per Two hit back on the you high your cost think $X.X

Jon Moeller

a timing, comparison more a next some savings close so integration hopefully and of as ago to positive little be little coming In years. deliverable We we for be gross driver both margin. bit being lower online we year bit being that cost sold exceeded expect the couple to for to the a is the our and cost Tabler delta Virginia from representation of it years, major any higher cost-to-good on startup operating a with We other remain plant to there margin might example, fourth categories the on quarter we higher. years and a to produced don't and savings, level in by those expect largely Station in we fact communication and West the expect over and It's original get savings. committed just now view

Unidentified Analyst

much commodity holding environment growth. in such said, strongest been And than is and back as sales as margin operating price growth What expansion at grew high easing, has and margin. Just has has sales the years? SG&A thinking a been sales rate this disappointing through I inflation your are drove quarter. What's where passing more Profitability an bit anticipate organic on of percentage organic in gross it we you the been gross that? on a

Jon Moeller

that. A couple within question of

flat as as profit our been the operating neutrals, year all, positive flow into talked ago, sequential earnings per many well I is of that improvement on versus a take next we the indicated I after quarter as And earnings commodity be a FX, which mentioned was impacted as is up those margin tax margin as currency and out gross I billion share tariffs and from one had we've imposed. hits, as of core comparison. transportation numbers through sales currency X%. headwinds, will and as dramatically the the expect gross First double are core on constant well indicated, I have said, basis Overall, times call, by digits just $X.X of of

and the you So cost, those pricing cost remember, to pricing because compression aren't that past can't to recover you could 'Well, we're I pricing yes, recover you margin. say, in those when to look to -- them?' We're not are just the of recover understand drivers big margin cost but there, those recover

to growth. and we of has we're That's of behind that occur typically typically forward. get see operating function then and the back we It a to going we're So both that math algorithm of that confident expansion market through just declines be cycle to until margin our with the significant pricing compression. will a committed margin gross delivered and top be it. very I'm third But part TSR, and

Operator

Bank Tong Next, America. we'll go Olivia to of with

Olivia Tong

points accelerated seems the I of this of bit hundred talk spending we summer; lot the increasing diapers battles higher of you. SF Heinkel’s in growth, you've laundry, all total launching sales new obviously little Huggies seen competitive it you're it's state Thank you because or called marketing also at a whether a it Great. against But to least so through of it are marketplace. in about wanted competition something your toothpaste or with the haven't more spend. basis made seems that, noise that

those you up. see forward? to Thanks. can going continuing what brew talk seem So battle to competitive about Because you obviously be

Jon Moeller

industry industry, is to a competitive Our decades, will and markets, be. across continue across

increased of not future our encounters, current a we we've X/X a strong and continue have experience, advantage those line expect our win and gains. it or increase industry we that's in to but said every proportional we're If every winning sustained If into it's has just that indicated as earlier, not translates do would be going have we're won't where ours to growth. that we our as the very capable be category, I market unusual our reality, share challenges. that, an competition response versus we'll can historical in be to unable competitive be as growth, we're likely competitor day fine. that and experience, do strong every drive to top to to bottom every We and very if we'll our been some superiority in and country. job It That

and the thing. good slightly role which to again, competition, that's very inflecting market is about one understand thing three that other The very developments competitiveness positive a growth in of that as the market we is think are positive is important

is to second that occurring The a is occur. where good pricing needs it That's thing. very

Third, promotion levels.

If you below up. down of X% at sold certainly level are ago They're year volume promotion. percentage spending being results of a And they're is terms down down. marketing meaningfully. on a that's I'm talking and U.S. category look at in

all new results is in you a and that Each but looks we a our - fairly In fairly other's at dynamics. pattern. aggregate or that’s today, level, day, that see see it You as a here constructive sit a very results, day set pretty good. observations of

Operator

comes with Bank. Deutsche question the Powers next Steve from line Your of

Steve Powers

around way thinking was and you're I I Merck. you're some or decision-making you impacts how structure if could behavior, Enterprise including to months versus cleanup context spending the persist future? as And of more that it unique that in to so, thoughts of communicating and planning markets the to XXX the be will points and to the question; as out a to or curious think just you business elective 'XX, is out way? much I'm fiscal able of quarter quarter? squeeze rolling spending taking in, if extent generally, inflation that just how new had shape. is basis would And wondering that maybe in just may been transitory, change what other break SG&A I'm focus efficiency Thanks. is and I this the kind quarter maybe And about it's extent that you've over over inflation just growth last wondering or changing the just the just business mentioned improving to be six

David Taylor

Thanks, majority The majority the integration due consolidated costs. the importantly, of our results, all the but the SG&A of to Merck of to reflection the not and is addition Steve. of it, increased,

to forward. results going we're synergies to get going two one-time our So more will annualize after It go through Merck in also inclusion to of costs quarters.

out relative in there. that help and delivering, we're of prior number this compensation you in so integration expect magnitude. of a just don't for the that's Jon get positive synergies that tease I clarity the full be we There higher within to in to that for accrual I So of than been deliver make is number, here the kind ongoing expect we components can that have reflection it negative, year it with would SG&A the is terms deliver. years; an also this results and to to And expect be the once we also ongoing

forward, again, operating reflecting Merck, the increases next investment quarter I year have next same. the would hopefully versus soon as go as as be in our a SG&A of to we'd would vectors think construct as comparison up certainly, in positive And about we've excluding talked slightly superiority. I expect ago. anticipating across margin But been be we year

clean; In accommodate to out of going reporting to completely quarter do breaking markets the it's design developed rewiring markets you we I X% I going in growth be today, terms to both of that mentioned forward. them enterprise asked expect grew the that not markets, growth you've can I prepared though and in of analog future. enterprise back -- the the just or that But completed, we'll focus was I'm markets. of precise markets; in and that in and by the to broad-based give prepared sources micro-organization be exactly answer we're focused still in we not honestly work companies to developing question through just X% sets growth the

maintain maintain we those at on For look majority to are we X% that growth. our delivering want enterprise perspective again, growth upside in digits Europe, an going mid-single that in we and the growth those some market the in quarter, when at grew you growth you exists We be we it's grew to number, profitability. if just want last the the Japan; U.S. are grew look optionality X% so -- the in and the markets absolute certainly to in of of markets future that developed

to we are we'll in talk and are And to an that moving up about our terms So in different be of plans about now more generally, itself we next plans markets pretty prepared differently excited each. this forward. the this either/or But this win when all opportunities those presents in dynamic, excitedly isn't for manifesting year. of is how we're set specific two sets discuss

Operator

from line JP comes question Morgan. next The of Teixeira with Andrea the

Andrea Teixeira

probably a you're on EBITs of I commentary can mean, understand would So Merck; to drag. sorry, quarters if be like being a a the I basis, little bit been -- And you through, just fact context And understand bit up. there? billion category that next growth once your on about for like can slightly a more you some the give elaborate the -- a $X.X backward-looking. have little Jon, the business is cost are three if the of an drag, coming kind excluding still I on that that synergies less margin of on to going apples-to-apples cycle But of expect I'm you the commodity so, is saying us EBIT Merck pressures; the

and state a or like you're takes can both, you. union on a puts the So us the for seeing how transportation. basis sequential of if you resins Thank give and

David Taylor

quarter, I I look driver constant bottom-line a FX. all biggest currency as from mentioned, -- growth completed the operating operating And have is think on When to operating again, you through margin the at way just of the profit, basis we you'd and a core standpoint, EPS, X%.

forward of business. doesn't costs talk transition next and So incur sure largely mind's sure Merck integrate eye to costs those transition about what exists is would our to make and well. it's what not that dynamic how couple of we I continue but and The I important us expect quite to as going I'm that in fall that think have quarter by we the quarters as one to over

than but we just it anytime if certainly last exposures going annualizes in we So necessarily give yes, again, From supply, in will if there real dramatically need commodity parts this have it commodity little and then than our -- standpoint, you terms is the and in of exposure until that. in next that From the do And annualize, we lot. combination will only believe improve soon. more what ball quarters but at better, that reason for and annualized; that there a market, [ph] we've the different terms environment crystal over and look the don't as slight can being I was easing dramatically we a you in Jon detail see not to it will synergies. deliver the but demand no regard, seen example, of not it for rolls in see, maybe commodity all. the not a it a and two aggregate when we cost quarter; don't have, bit we forward, more of pulp of talked

the good petro-complex resins of your is mine. terms [ph], as In as guess and

Operator

Wendy Nicholson line question of comes with the Citi. Next from

Wendy Nicholson

going get despite that. work, seems get aren't." the a are things portfolio I say, Can sometimes grooming, years about it outside more business, Hi, been perspective your pricing the in a reset, And you has innovation, on kind weakness weight you hear of of we what despite just of sometimes now. it September good morning. "Hey, the results category the the stubborn. just about so a for it to seems things overall talk in from because that several quarter, I you in high-level big as But had promotion still consistency the

to guess pretax mean, I I long that least out of the to how over to basis. made something category? margin fragrances. grooming run? still, on highest are begin number get two, So, think the you it's And out one, Is to I your business committed decisions get number big really of you a at Duracell, you've even need

cut reinvestment, room another some there price there reset is another do going? to major or to big growth other So, Thanks. get

Jon Moeller

Thanks, Wendy.

Let me with the start you just Merck will. if [ph]

in minus in So, grooming in flat the part appliances the business. the of the last segment three watch X%. and down quarter shave was That's

a are of geography we any where not fairly in not a by is growth It very challenges in market and competitive as want disaster in fairly growth, to but primarily also markets results the So, as strong means. the with Europe, very terms by different in developing continued some results be different, strong well results challenges U.S.

we're back category market of that's ahead bring the To skin irritation. Europe. the and exactly issue, as that increase the SkinGuard, to we've because longer seeing no have who the since XX% we address right SkinGuard the a in behind it's addresses they potential slightly extent introduced that of you fluoxetine increase are does more And usage, frequency market uncomfortable. the launch now XX% part growing to I growth mentioned that And way, left men [indiscernible] now the that. a which the provides in man who delightful system We and feel we or can that of what which experience into sensitive shaving feel SkinGuard that shave know, right and is of investing have we have of

to do the trial, probably work and need prepared U.S. have get more to to and do sufficient more to fully invest awareness do. we're We which in

how off is Joy, business was can brand Walmart female just in This thinking it, an we do business nicely. about a that overall. we're not exclusive part very but win of want that to business that's called feel which exciting start. keep that to continues and We we only we like great long-term. a of to So, The the introduced very, with kind

Operator

Mark question from of Stifel. Next the Astrachan comes line with

Mark Astrachan

Thanks, kind think And things in about have within also some entirely I re-ask on category developed on competitive be I'm and seen and pricing volumes kind from and way, question whether versus of related overall may the I different that's more, but so markets. more morning, a seems specific has not level be that impact almost I categories. basis? to Maybe an seem to to your standpoint, guess, anything Probably threats far I but way. developing overall it. seeing overall volume response the re-ask it few a from, wanted you We probably everybody. on increasing of obviously curious changed guess a around gone wanted be of related a to see just higher. the that of And pricing to increase question level to doesn't then you lastly, impact. having you're

Or at gone of still kind just have, retailer much lot don't can what your from these out So have more would are seeing promotional the level how pricing? you of so that the be through we a if level you is kind that them of sustain to standpoint not and term? whether peek So, promotional a know, price from level forward, standpoint? retain as inputs going the discussions eating do or of have look does going a a kind higher, said activity low, I high increase expectations or maybe longer of but that of you increases do over that

Jon Moeller

see basis dynamic look than the aggregate equation to pricing, If as slightly it. Yes. relates different an see you optimistic. volume overall may we're relatively on the at I we

been top so particularly impacted. has If negatively we've to going reflecting prices adjust there our as to have about But significant when did when where what of increases feel I that's talked major we've declines stand see quarter-to-quarter, results. some good market places pretty quarter And you're line than but this by size don't because feel We developing in little the and think markets appropriately. places been we environment know, be a the in which small I and significant currently. had competitors last. conversation reflected time last as you'll Argentina look I in impact volume see it's like industry always pricing the performance and and again, comfortable market moves made HPC we today, made I we broadly, like about inflected level Turkey, I'm talked of from on more on volume a I and I growth, have their part positive will where has just fairly bit, that

through Our joint market and value way make on only is retail conversations growth. they our on creation progress with partners margin. growth market our The primarily based are

the shared pricing meaningful margin to items not not grow and our them. appropriate to a want a in want market for that is negative. dynamic is context, that the actually They them. an they Our growth for positive, generate And

try pricing we with very specifically More to importantly, pricing take innovation. combining ways, smart in

growth terms offering With market And and in focus our partners of conversations. both the the decrease. ideally, retail doesn't equation value equation we're increases. our offering and It consumer's in we that's we're terms value that the margin potential the where increases of

Operator

Modi with to Nik RBC. we'll Next, go

Nik Modi

know can update align DSX. interesting. initiative small kind I it's it at point, with how but does Jon, this an give pretty a on the Good obviously morning, I you of of everyone. disruptive going whole brand? was hoping nature are and of the brands you're thinking and learning Any be would it is to about can kind to you context you be give P&G early R&D. on What it put going are own

Jon Moeller

excited of across we best very we to of exciting up innovation. potential And and days it. terms across in positioned a standpoint. its in and that can delight consumers transactional very categories that number today include product can are in it work We're understand working how with we very to or with to how put of optimize it from a can the categories the it this DSX early environments of branding how what standpoint, be can includes But degrees and is from formulate from understand several we about us It from potential efficacy product standpoint, opens consumer innovation. a our the a

we superior potentially more creation share and But do all underway, allow just Nik different and this a decide that new the us a So, as forum multiple well. some of jobs we'll of is is more. opportunity as learn to categories, wonderful that work more and

it. very, very for about it about thanks excited we're So, asking and

Operator

of line Next Strycula the question with UBS. Steve from comes

Steve Strycula

A super morning. question as a Merck good quick on Hi, follow-up.

that to Jon, the costs integration expenses just quarter. case? fact the Is fact that want Just, I were SG&A in in part clarify the of

Jon Moeller

in case. fact, the That's, Correct.

Steve Strycula

forward. about then you. the primarily of do for Care And advertising? trends Care to how lastly, this you U.S. versus I Thank in was markets this just moving you're Baby inflection morning, it noticed traction wanting to as an question, China then switching called know slightly see over to and whether both Baby to gains competition. those And release earlier Gillette, already the and appears how I you think you out that sell and quarter-on-quarter SkinGuard point Gillette

Jon Moeller

we in since on actually sequentially, and on haven't discussed far. XX, past Baby that basis. a improving trends past so Baby X the global months past X, share I'll are Market much focus during call

on the with of a come. in overall. innovation that's lot encouraging. story in So, see very to We Baby rate growing And China, the growth really that's of did share still a but reduction

pricing again, much to and a that experience So, a superior across little consumers, but want bit as our be offerings. standpoint, sensitivity offers competitive as from I possible, importantly, to ladder our and a ensure careful form here for entire the portfolio

Operator

of Bernstein. Ali next comes Dibadj Your the from with question line

Ali Dibadj

Hi, guys.

a you line answer desegregate little sort be or the equal all your and same-store sales the bit would growth typically of it talk to numbers not top sustainability terms how [ph] can dynamics hard, Understanding might then little in peers, precise all be going and price the forward. dynamics that else of as of lift able getting if be about about Argentina might Thanks. shelf promo, that in well sales would change, those like trade helpful of into you it's then all helpful. numbers one same-store to and us spend space. but peers think sustainable lower And get you the of a possible of you do? which differently I to are price help X% your than line for be those are health all your And but question, So, just bit the to be that figures top drivers

Jon Moeller

XX XX think to Argentina basis point, aggregate about overall our line. pricing, I fact, on in had top a

So, not a huge positive but driver.

you let One for, can you've but pricing is all numbers only when our As now, appreciate at been appreciate, couple have the have right driving much those sustainable equation breakdown, mix. think components don't top Ali, you'll if down driving one the only traditional in here me line that the a to ability top make line. way readily of I sitting or break look of comments. growth, you a more as asking two the you those than volume, of That's I are

a speaks was Price that that sustainability two And points in the was price itself was So the Volume to within impact. positive of model. impact. quarter. positive a

of shelf spent increased are and The some forward. second the seeing sustainability in going shelf our terms and turnaround, in terms thing, talking in importance important line of you execution go-to-market we of both and space. distribution, mentioned about in quarter time we this space. top And but intentionally very the accounts also it's And this it's

been potentially has and the case us source viewing are history. that are value retail recent joint a potently than as We significant again in cooperation the from seeing creation seeing our partners, spirit of them of more in

offline, trade, but the along can to to that that perspective very more that progress here. with the and we're available as I get the about online speaks lines said, don't will I overtime you the we're have results. you So you've I of be try positive making or sustainability asked, retail appreciate readily

Operator

line Jonathan Next Feeney of with from comes Edge the Research. question Consumer

Jonathan Feeney

here or wanted tell works, level coincident with investment are that would XXX like that is marketing the relative of why that performance you there I'm discretionary about rolling practically of when and that your to justifies, -- up and basis; and environment a they clearly, What you me, rate work. we I trying points the how understand to basis kind expect case the I so understand lists is you out and opportunities what a maybe on -- I'm both about in line able how to marketing to can so your spending people be. suite now or marginal there to going how approve want-to-do of about on investments seems trying the you in It understand all right ROI invest to top the the are to when discretionary called forward. like driving people marginal this should to increase continue be from tax think picture over bigger from you come that that

Just on. I'd insight Thank process of some discipline kind love that you. and

Jon Moeller

opportunities. delivering to categories, market range decisions of just can generated have have been results the the to corporate essence that invest. own to of superiority drives opportunities those rates. and objectives things, Group in of bottom-line focused that across typically, categories really to view the going and determined view fiscal articulating stupid individual the the vectors those Presidents opportunities of be mean clearest We are of five really we've superiority all Majority flexibility made who choice, to return we the make that delivers terrific; themselves to these our to return of been only that's point return very the one. growth market that. in Point Presidents of find in the we growth where on a by for portfolio, able but the and doesn't the in superior believe an for bottom-line very brand but the in they come across on we and categories of category these as in And related our to of David are exists ask terms And and that acceleration to we're we would and try even smart we're find market not be clear that where I that guidance need degrees two, year. where business I that deliver do rates know going in that to maintenance bring their invest, on investment; where truly performance inflection to a bind and of that they we're And facilitate terms if

made and the within majority not bottom-line sure that gives they're an where overall granularity how creation and vast, I'm that individual to a individual to that vast you're the again, categories looking So and are you objective. markets, invest decisions by value and of for deliver but held objective

Operator

from the comes of line Chappell next Your question with Bill SunTrust.

Bill Chappell

going decline, years? light continues mean to birth I of just of the the comfortable foreseeable next how both to at the just Baby you demographics that expect how U.S. rate know, if that reasonable unfavorable to Baby; of do world, to trying in in mean the you are around for future? it kind couple Jon, turn grow And back business that and to can I'm and you I is grow understand,

Jon Moeller

the to population we global basis, On expect of babies number increase. to a each increase; year born

this as attractive by current rates, global be should growth on basis, again a market a very So, is witnessed category. this

A category that the what Type Bill Care and The within pants -- premium is premium the pants encouraging diapers. is aspect the other form growing are fastest particularly, Baby

So of different The preciousness purchase children make case example versus contribute of that that, a one dynamic. a generally, category overgeneralization, statement want grew absolute up, China in the child an family an to generates but an of is and to in clear the in eight I families every very or dynamic. I mixing don't not is but smaller up aggregate. generally,

we we're do ladder across to in and that, need that So are going to of move enter points challenges make choose each certain that there a pricing And is be There that superior a be sure that attractive category very, markets earlier to this that is we as us the the category causes declining. or should see present this that's if very nothing we that to. concern said business. I will people

Operator

comes of Levy the Caroline Macquarie. question next Your from line with

Caroline Levy

Beauty; contrast what those then I Fabric growth And talk top looked within stronger EBIT had ask to growth; each strong that. respective strong wanted of expected and the can of happened Fabric? have to just margins drivers really, businesses, in line really driving profit in Just some Beauty to and -- of your would in you Care, you

David Taylor

on lines little and to that a I'm you think basis, we Once answer give get category quality the of deserve. an bit below the you ill-equipped bottom top individual I

profitability. in a has impact I'm productivity have Beauty both and top coming with levels pretty In overall on nicely. follow-up going drive big ask top comfortable to of more to So line savings the on we've into to in which promotion rates you that back Jon significantly but effect, with those Care, dialed we're that. bit had on we combination that's a businesses categories Clearly heavily provide Fabric granularity. Jon investing the little bottom-line can of I'm very in business and growth responding you both

Operator

Altobello Our with Raymond next question comes on Joe James. the line of

Joe Altobello

the to notes that's first in of gain think that's quarter, a be quick and Gillette not my housekeeping the Boston that So, item; in on SG&A income? are if correct, the another a $X.XX the sale site going to about you share, I in fourth $X.XX expect the line,

Jon Moeller

to it's the It's, will yes, and -- $X.XX call would I SG&A. it range be $X.XX, in

Joe Altobello

at gears then would this billion better it transport dramatically and from And commodities, to but least still number that commodities assume 'XX big currencies; getting Okay. year with look headwinds I $X.X fiscal market if what the know you like year-over-year? at about is FX, after-tax the stock rates, looks shifting a this nothing a changes on down assumption for

Jon Moeller

would but the believe in relatively I Yes, it space. nothing realize it's seem to not. answer question hard is a or it simple

etcetera know, changes. You [ph], nothing you so else if look payables at just

hopefully improved we significant numbers constant the to as I've that see sustainably so growth the top should lead share per currency seen You've margins you leverage earnings the line provided, continually grow double which is into on and away, number the a the so tariff assumes commodity currency better digits still much if that place. goes hit well we're in hit, that all constant of

with impact what I additional that do months second the Do we went year rightly question and it as year. to million it within competitors take the it savings? they currency an alone. you'll after-tax affect and into do introduction said they impacts do move into that's and they of hard doesn't hopeful is, we -- How be -- the other that and affects P&G, reality, had scenario and this it's be then think to is case. of the will had have happens because the wouldn't we're anchored imagine what you All tariffs more know, clearly, went bottom-line? that as I'm standpoint a Having is more in it fairly positive an we that, on But to went kind that it a bottom-line spent of a ranges it what And the that back? we just back? to actually And wide spend as Now to scenario would last from last reflects $XXX year through why you the described.

-- it's you encourage in to I So, think ranges. would

Operator

Next question comes from the Ottenstein Robert line ISI. with Evercore of

Robert Ottenstein

may. you if questions very much. Great, thank I Two

higher back and the just FX the about if results U.S. wondering leverage on more And wanted talk bit you with more in the question. impact earnings share little on bit is overtime? little so about it us or the if results, than just is just And give detail a anything that a more Thank to detail of lack Could how and and terms e-commerce? then the you sales or is overall would the XX% could great the you. U.S. you on go second, given that So much why operating there little How in way significant impact leverage whether to globally. bit First, up not of on be could gaining do did? first the China e-commerce; a you're did? to

Jon Moeller

core, gross points gross and margin operating all-in basis core margin, an you XX our the Constant ago. get you down so were of a margin. in at basis the said flat we points, impact; on basis basis idea we if was currency On as XX year In versus up. terms margin, points look were XX on ago, plus impact all-in was on currency we ex-currency prepared of the a year it remarks, versus

trend that high to where devalue pretty -- but that this significant existed within tried year to way share doing with so one hasn't result e-commerce within opportunity out have a fairly that line a shares if that at our in leverage geographic we've share still more a there scenario doesn't dynamics should the that. we're it present it retail be in the So, which as of currency online doesn't our hopefully to to In an shares a accounts our individual U.S. the are E-commerce; lot annualizes work know, but income you position. as degree growing you statement basis quarter, representative really significant opportunity, result, we're lower -- quarter-on-quarter. again top make China progress. continue our we offline; beyond continues continue this still than we're closing are drives gap offline and of on broadly. volatility within are through well There of on business the that We

Operator

for ladies great And day. may and Have gentlemen, participation, today's disconnect. you conference. your a Thank you that now concludes

Jon Moeller

should everybody. thanks be a be think participating. kind income thanks. Again, and the developments effects these environment going more able sustainable leverage to we should so and do for more a very on Well, positive I of a believe statement forward, results strong but drive very, very sequentially; or proximity benign Thanks to them I of quarter.

The Procter & Gamble Company (PG) 23 Apr 192019 Q3 Earnings call transcript