The Procter & Gamble Company (PG) 22 Jan 252025 Q2 Earnings call transcript

Company Profile

Participants

Andre Schulten	executive
Jon Moeller	executive
Dara Mohsenian	analyst
Lauren Lieberman	analyst
Stephen Robert Powers	analyst
Bryan Spillane	analyst
Peter Grom	analyst
Andrea Teixeira	analyst
Robert Ottenstein	analyst
Bonnie Herzog	analyst
Filippo Falorni	analyst
Christopher Carey	analyst
Olivia Tong Cheang	analyst
Kevin Grundy	analyst
Mark Astrachan	analyst
Kaumil Gajrawala	analyst
Edward Lewis	analyst
Linda Bolton-Weiser	analyst
Robert Moskow	analyst
Korinne Wolfmeyer	analyst

Call transcript

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Operator

Good morning, and welcome to Procter & Gamble's Quarter-End Conference Call. Today's event is being recorded for replay. This 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.

As required by Regulation G, Procter & Gamble needs to make you aware that during the discussion, the company will make a number of references to non-GAAP and other financial measures. reconciliation these trends investors its and website, a believes on useful Investor Gamble measures. www.pginvestor.com, business financial underlying has whole & measures with provide perspective Relations Procter non-GAAP of posted on

Now I to Financial Andre Officer, call P&G's Chief Schulten. turn will the over

Andre Schulten

morning. Good

will Board, Chevalier, with Joining me Jon Senior then and results quarter Investor I'll start the Vice overview our today Chief of Executive results. Moeller, Chairman your are take guidance President, perspective on and Jon Officer; an and second close the questions. we'll and of for call on President add and John Relations. 'XX fiscal strategy, with

acceleration results high growth, EPS in expectations largely were to with line growth, despite strong quarter cash degree our owners. within a volatility return going-in ultimately, organic Second of share sales in quarter, the

Organic points the December. were point line X line The X%. to added Volume pricing top organic with was sales contributed X quarter in early mix in than anticipated roughly year. and growth, for grew prior better sales results

team the of management merchandising overcome transportation January global support of X-week provider ahead able was and orders our late system to strong events. outage early December Our customer fully

Care categories broad-based digits. Care, Care Hair with of was up growing Grooming Health singles. Personal was Skin Oral low were quarter. and mid-singles. down Care X grew Baby Growth Care and the Care, organic Feminine and was XX categories for Home product sales single double Fabric Care, low across Family up digits. Personal Care, Care

points Organic X%, X% America sales line in were prior Markets driven of year. in growth. grew grew sales Markets North Enterprise volume Focus Organic by X and in with

holding X X% X%, again and region with delivered growing has sales XX X%, North X quarter and growth share to holding categories on of broad-based X% growing last grown volume The the value X%, X or quarters, share. share of volume market this quarter. XX X% of America growth categories now each Over X% organic or X%,

Focus X X% were organic driven growth. volume Markets sales by Europe up points of

Markets average X organic quarters, volume last on grown have growth Europe sales Over on the Focus of X%. X%

low singles. X%. Latin Enterprise Middle low organic America and digits. sales Greater declined East each And Asia, China Africa and single region declined Markets the European grew

While growth this step market X% back trending soft, grew strong second toward last growth conditions remain from is in down during year, consumption China versus in Greater in quarter. growth prior Underlying China. retail. our solid XX% SK-II are forward key market travel a and the a modest in Greater we largest period XX/XX Notably, decline and with

in aggregate share with combinations XX the or value line country growing XX top for of Global was share holding year, with quarter. category prior our

up increased line, share quarter On the per services the share versus The disruption, transportation almost neutral prior incremental of basis, year. currency X%. were X% a core $X.XX in On core goods earnings sold. per EPS cost to of roughly included costs bottom $X.XX, through entirely manage

strong basis productivity core XX While basis decreased XX included XXX operating The points. currency points. and was basis operating margin points, improvement XX down margin declined gross margin neutral quarter core of basis points

We billion $X.X flow dividends in in billion share billion of shareowners productivity returned quarter, XX%. $X.X to free cash Adjusted cash was and over repurchases. this $X.X

guidance core summarize to what deliver to EPS shareowners, cash in our performance continues track overall results, organic challenging growth, within a geopolitical and economic sales accelerating solid ranges, keeping to on be To year us growth return good environment. and fiscal

Jon. Over to

Jon Moeller

Thanks, Andre.

X-plus over Our through during the through to enabling historic geopolitical excellence, and years, past strong tensions. continues results execute with inflationary our and team pricing pre-COVID, COVID, strategy cycle

nearly earnings X% sales growth, X.X growth now X.X% X.X fiscal of core or X% organic that better of sales share averaging or We've X% delivered over years growth, years. period. better now delivered XX those consecutive averaging over quarters organic We've per

over is long-term to deliver, bottom line consistent sorry, This page growth balanced growth and my turning top solid, we strive type the time. of -- here,

into for consumer As the and guidance the heading And fiscal first full this we while stronger more more the below year to set the half. the will we make expected trends we year, second year. FX Andre are rates the recent continue in expect balance ranges results guidance in discuss half of the challenging, results update.

We the the the strategy at highlighted we're to has that confident growth reasons Day November. foundation and in value Investor is integrated many committed results, strategy our that remain and for strong of enabled balanced our the We creation. in

replay I the on encourage listen our you you to able attend, website. If IR to to weren't

over we We're remain generate returns. doubling vectors. choices, in portfolio strengthen down X to year our all To the very together. day our X recap, carry across single superiority U.S. vector on itself. the can dollar-based moves disciplined past to including It's superiority some No all ability

by and superiority across strong. leverage to penetration. and innovations are plans extend create And driving innovation trial more to The recent the we continue household business very

the Charmin the with examples, value patented scalloped whole biggest smooth X across -- few the to and nearly body sprays Native deodorant deodorant last share to drive each year. continues innovation tear value in growing XXX U.S. growth We of the the share Charmin over P&G this launch brands. U.S. and point the edge, are in now paper Old volume toilet first volume A up we Secret drive segment in in And in to trial the its category. and Spice, years, continue were segment growing

largest Swiffer's than the become continues XX% U.S. portfolio remarkable growth to driving in and category. the to innovation more of market PowerMop X the the contributing X up Powerwash after brand point Dawn market a in nearly share growth history, has in Swiffer of years XX% drive the market.

expanding over Oral-B several we're iO XX and to toothbrush, most brush. from with next first a consumers the up manual launched help last trade major across year. results months. We've X, to X in power markets toothbrush very advanced iO our followed designed iO power We early are a the Early iO U.S. encouraging, up the

whitening stains and early teeth new white remover. to XD great launched better stain The remover a trial day prevent Crest deep period just stains works your our to bonds toothpaste, formula deep occurring. for just start. from The to in We off that stain is X the dissolve best-ever lock

We're worry-free our and plants' strong very traps ratings reviews. ingredients inspired killing and sprays, and bugs. expanding Zevo, receiving trial mosquito defenses with building by repellent and insect against natural insect We're distribution consumer

with and Tide Oxi Tide's Boost and to fabric includes Boost Oxi retailers Power Power most and Oxi a we'll be with detergents Pods provide in quickly Boost innovations soon, in laundry following be powerful the great enhancers. clean. from Pods available power will have launched online stores just response Xx customers. additional Oxi up

year we'll our phase chain continues evo, performance just breakthrough to new Tide expectations functional of Colorado market, XX in months. detergent in in Finally, our first the the developed surpassing weeks and in the laundry launch. our our supply fibers test exceed plans after expansion last readiness, be We're through goals X platform, assessing progressing our coming

we U.S. There the Spice, brands. are across Cascade, many innovations Gillette Febreze, could examples of in X Venus And the Tide, and that's Old Luvs, Always Dawn, Crest, Downy, share months considering just Discreet, Mr. Gain, next Tampax, Pampers, Bounty, more Always, Clean,

what areas in our in you fuel in this to can mitigate all of investments cost unit our to we're X-year prospects building years going in our done mirroring program. we've innovation extended reason see hope Improving productivity superiority, headwinds forward. business and with master currency operations each drive one visibility I confident improvement is productivity plans, cost savings and for we've our expansion, margin

We've our technologies to trends, adapt and capabilities constructive a shape industry, and advantage. create competitive will disruption of new and of willingness driving outcomes greatest extend We're so change, to fully creation. ourselves to enables the and future and deliver the focused industry our continue that our refine value that designed empowered, strengthen business P&G's organization and be to agile accountable, on and P&G structure it people

be to and of needs delivered. integrated a call We not menu important. Each is strategy element part choose reason. incredibly this an for the It's Each pick from. a strategy to

demands The not the to inherently real time, we changing these advantage the It still. from and same society. It to of consumers, dynamic. that do comes strategy of at able sit things needs adapts customers the being all

to business, balanced business growth, path creation. value believe down is strategy, to a deliver operating this line with forward top continue taking in and bottom We creating double focus integrated market driving growth our versus to best on on

Andre With hand discuss to it that, back guidance. to I'll

Andre Schulten

Jon. you, Thank

unchanged So are currencies consistent with We've highlighted fiscal the half the competitor, environment our remain of consumer, geopolitical to dynamics. algorithm. long-term costs for and fiscal to year 'XX remain our around to guidance from retailer volatile complete, to input continue ranges expect and challenging and us with we

our in growth top sales X%. of the range organic we line, X% are the On to maintaining guidance

our growth the currency objective range markets modestly We which in continue ahead markets. deliver of growth the year. to for the to And to we underlying organic the sales grow X% these X% of of in sales local compete remains expect to

the our 'XX core versus fiscal This a $X.XX share. range growth guidance On of 'XX $X.XX equates per line, $X.XX. EPS bottom X% remains fiscal guidance a for to EPS of of to range to core X%

'XX. approximately to for consistent which earnings, a our equates expecting $X.XX last us. exchange after recent million commodity with sharply fiscal foreign for outlook headwind costs cost share against guidance, have remains Since $XXX Our commodity of of per a tax, rates moved headwind

a $XXX fiscal which expecting approximately share are 'XX. $X.XX to of now tax, We a per headwind after equates of headwind million for

these higher headwinds benefit and and versus income tax nonoperating I $X.XX somewhat prior year the FX commodities Combined, to the core lower expect additional of headwinds to on top amount continue EPS We this to $X.XX fiscal mentioned. to year. rate a

visibility bottom projected line market growth top With headwinds, the exchange lower guidance currently the foreign stronger and of have end good ranges. and we softer towards

that not control. all continue will control these largely in to we offset However, headwinds in our levers to push our are

have billion We returning free $XX the to in repurchase common billion And $X of dividends fiscal to the of flow year. to billion stock shareholders around to we XX% cash and for year. combined billion to expect $X $XX productivity pay for $XX cash billion adjusted in plans to

growth chain the ranges. geopolitical anticipated market This disruptions or Significant outlook commodity additional current exchange disruptions, increases, not supply store on cost major commodity is rates. weakness, closures and prices estimates, currency based foreign within guidance are

over hand thoughts. I'll Jon for it closing Now to

Jon Moeller

growth commitment and and at outlook with retailers. line the volatile We of people creation, challenging We're our remain excellent on strategy, a very deliver value half. focused and a good environment, starting balanced second delivered execution stronger to propositions a results consumers very with integrated in have the dynamic half top for and pleased year irresistibly to market of P&G the and a superior aimed bottom constructive first delivering

With questions. your that, we'll to be happy take

Operator

[Operator Instructions] Morgan the of of Stanley. Your first question line comes Dara from Mohsenian

Dara Mohsenian

drill the some to year. of bit more the half back last sales a into year, over the down the wanted of short for just organic I growth given term volatility

OSG about between quarters. the a lagging the in XX% versus robust historically mix last talked the country You've split in XX% few

performance also the you you're improvement each on fiscal versus update of of the buckets? on Do for back bit track QX those a that's in you in the stronger, just look us XX% QX? as by in And the and year think of give just U.S. in sustainability growth XX%, driven the you Can of half Europe. continued presumably in

Andre Schulten

take and crack question. a at the I'll for it, jump you'll Thanks in. Jon,

look America the the business versus and the X%. explain and logic you we've at America, the apply Latin Enterprise of comprising so to if I XX% the Europe, that the Markets, the X, divergence some using continues U.S., grow of Latin same markets, at of So around been tougher to of the quarter Europe business, of that XX% majority

XX%. What is improved the has

Middle a Asia, So the the but improvement China. of markets, Greater mainly Africa balance the performance East, the significant of in markets

down, down we in X% was organic China only the quarter remarks, and was X. in as sales So quarter X prepared mentioned XX% in

neutral towards more hopefully, encouraging we So as see X. picture and go momentum half into we recovery

expecting the what of we're into exactly go second the we That's year. as half

we've continue and We U.S. X to expect that X. quarter pace at the quarter seen the in to grow

as some We base comps Latin across and increased the versus momentum period. Europe specifically America expect ease

to more continues And maybe with guidance, growth a move Europe, growth and growth, and combining, a a little midpoint to at Asia, are we be higher. if in bit easier hopefully, in that contribution neutral would organic bit sales towards us if to Middle allow of the stronger China LA America, actually sales comps Africa, North little that, East,

saw across below or Conversely, would guidance. of current China more we if negative the territory, or slightly core growth that we lower the and some us saw returning to North of move weakening the organic to markets end sales America Europe

on Dara, the case, strong around the performance, Our base recovery business, of X% in XX% the summarize, continued to continued XX%.

Operator

The Lieberman next from Lauren will come question Barclays. of

Lauren Lieberman

terms you seeing I Andre, and in But P&G's also think were projected of I running performance you're what of kind So hoping was comment on you behavior business. through dynamics. consumer could for

a get [indiscernible] something in same maybe read have the it of guys own it's as that you performance love to the bit December, U.S. share maybe would sticks, little consumer of market environment just in and sort in in that your on consumer just think not I and doesn't. But a trajectory. a softening Europe a the dynamic,

Andre Schulten

again, Yes. in as I describe digits the X% Focus Lauren, are, consumer market very specifically, stable. In at grow nondiscretionary would Europe, actually Markets. performance which in and to and double generally, our focused categories, on Markets around in the Enterprise in continues

to ability of Our think, in to the visible continue share numbers. that, is grow volume ahead I

We are and XX XX in basis Markets. points growing about Markets Enterprise volume points Focus share basis in

environment. X Inflation X. consumer stable benefit to we about environment, And which relatively is going strong in that are see in half to from a down X%, we investing stable Europe in we half into and to expect continue innovation

volatile quarter port saw easing consumption off in consumption. bit coming -- by hurricanes terms strong in in December. driven In the current October the bit been phasing of by in and a very November a back of U.S., October more in then has and We little strikes,

It our to Market the continue to be our we're continues consumer, continues categories half similarly volatile, around is across European the Volume in do in but strong around which growth be and back, situation And innovation growth consumption and with I I to X%. to X%. when step our to X. communication, would very encourage doing was again, job characterize categories. stable

Jon Moeller

comments seeing would flat consumer reflecting in in terms to and is both the private add only continued of on declining also The thing Europe. We're shares Andre's behavior. States United label I to in

So that, terms of to. relatively stable the again, in is that rightly Andre reassuring referred consumer

Operator

Bank. will question Deutsche next The come Steve of from Powers

Stephen Robert Powers

that place call as a in currency million. as even profit X% didn't October Andre, your the out off had negative to move the the line $XXX impacts guess, the I'm impact I stepped it surprised top outlook little the on by after-tax you of relates up

could talk about moving parts maybe and the weeks. few there now or could So effectively spot movements whether assumed we've have further in last if just you assumed you've any as seen year key currency rates the full

levers as little I any gross year. XQ, pricing of the balance to love them down productivity sequentially. asking And more of margins and the discussion you then guess and the context over you you available offset see limitations relatedly, I'd those the that I'm bit an have XQ implementing whether stepped a historically, dynamics to to in of

if in So those balance over I your think but seen has just some strong fairly to moving guidance operating leverage the could clarify of see SG&A, parts. the wanted you year

Andre Schulten

sales I -- side. see we'll side on always high as based spot that Steve, the both right do, organic volatility are currencies, we'll in at the think we we P&L basis we're rates forecasting now daily growth Europe, -- and on obviously, seeing And a commentary. on are moving

here. update our we'll to ability reserve So

half. the mostly for But reflecting exchange we're of The now, will second rates. in rate foreign spot hit impact

lot mostly a half half, corresponding impact the in of the be the and FX saw first of in will we So X. commodity impact

built into our we've guidance That that communicated. is logic

deal to good all with a with any headwind productivity we about ability combination which feel is as of the Our across exchange year productivity, very for foreign buckets.

where levers. Enterprise we it's going exchange confident we're billion cost a pricing combination guidance productivity sold in our foreign both. overall, So rate in see and guidance most SG&A Markets billion $X.X exposure, probably including pronounced and is be of $X a Pricing but strong of on to goods

baked this, there's of closely commentary. All again, you because as of watch a lot But that our volatility in is in, in we'll guidance this know.

Jon Moeller

reflected at the heart forward. comments the again. heavily modest pricing of primary hopefully, Steve, do. our of amounts enabler we this the my And that's And is, move It's is was pricing, business innovation-based. everything on morning of as Just -- model we

been the potential XX at a Focus for line quarters. Pricing our of If growth you or contributor XX a ability has to even, of and our again, execute history, look in to Markets. last of in XX modest Andre source top amounts the of XX for neutral last continue years is a to confidence as the pricing our positive said,

have Andre very mentioned second we half programs markets. innovation across strong

put so top the all continue innovation. us in should to a with And we're pressure modest, of that upward but enable some that to Again, pretty good on line. position

Operator

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

Bryan Spillane

reflective X is China. a guess just on question shipment timing in quarter, shift there that? One, or that New maybe the any Chinese of So Or did Year's how the of just impact kind I is consumption? X% versus just consumption? So

And the about now as the of in Are the is use strength marketplace opportunities? then while position Just market of the has expand a changed kind market does strategically. thinking the way create soft? in And market looking China is more maybe all at the and your just change you're if you it changing. to broadly, position Jon, curious

Jon Moeller

Answer the first part?

Andre Schulten

so impacted not Bryan, phasing. can. I I results are think the by China heavy

phasing China across of kind Within the XX/XX, quarter, evened timing there on of preshipments quarter. for that but was the out the in

is progress anticipated. what really the had we So

that. of returning at We're make getting part I'll is core last China is encouraging point to into making easier Part which is SK-II in we're to progress. see. comps on of And brands, is growth X%, that the the

Hair across on innovating Shoulders. driving is on Olay, Care. on and We Head innovating Fabric that are Pantene, progress. We're We're & innovating Care

Douyin We channel. us that share allows are investing to create to value ensure but carefully in that in grow in fast-growing now the channel there, that we

the synchronization paying improved And core We call that we've the is go-to-market and I our we our in talked distributors made. element about last interventions with dividends. is last where think the collaboration

continue out is of So be I is I It to volatile. will the think in to woods. want right that difficult. be moving direction. the all will This China to continue don't of clear, be

the my guidance. the the us that or lower in volatility end can to guidance commentary, reflected of drive midpoint As

want ourselves, get don't going we it's so ahead to see good the positive. trend to And but more of

Jon Moeller

very, that's described, significant And point which both and channels. with exactly the very make is in take changes. to you you do intend we occurring marketplace, good with a taking regard of regard and those as customer advantage consumer behavior advantage And behavior to on change to to of

and the One stores, a they bit you focus based just there our of couple of channels, that that. very want bring business, that -- smaller paid very, to a P&G we've changed look at on feeding things important. One distributor the wholesale if little to and market are grocery is total I are being were largely more

So by being paid they're now category.

So deliver changes have fully products be of they not may have the to that we in against That's compensated. It each behavior significantly. like categories a deal. big to That a big order deal. in, seem

We've the from discussions. of that end our years on advantage things say, customer categories even everything China end-to-end, moved ago. move going closer year taken we've Europe fully all -- the U.S. focus innovation changes the that we And a of example, way to, also terms meaning front through in to the even of how X own wasn't the manage to or case, all for are the ago, in that operations the

big are changes. those So

third driver partners we and be change of the one conversation big we're growth, with demonstrating everyone market customers biggest -- The can their that how internally driving is that strongest and which really growth to having badly. something is reoriented our in the wants that externally market

the customers. stronger our more situation relevant taking and current even of another that's example to So become to of advantage

So thanks question. that asking for

on. very I think focused much and one, something we're it's it's an excellent

Operator

question will from of come Peter Grom next UBS. Your

Peter Grom

the the environment. I of raw seen we've volatility outlook perspective for few over you some input maintained million your some your some across months. after-tax past but cost recognize on wanted to get the headwind, materials just key $XXX I

our alluded the give the just year this the of we guidance, just question. margin anticipating Andre, your on in seeing expecting you're So you impact or Are across full key And at looking to think you unpack half what cost gross kind bridge? deflation year maybe in Steve's about of us kind first when half input cost or of buckets? back can the then you

Andre Schulten

and is Input commodities. of appreciate after in is most which what is variety that obviously, you, relevant different for materials now incurred which see us, you're versus What you a I'll tell half variation I what X, any think costs we the can we structures, $XXX will and year year. the for impact is already our in million any will terms outside hit are of of deviation majority current half talking oil P&L. of major holding likely not maybe we Because impact next fiscal the of because about, variance of prices that transportation of contract X wide

half Most of materials commodities fiscal first next will the and our year. impact of

the So volatility is, half where good we stability because provides is second in exchange relatively of the foreign about more it end feel equation for of rates. that the again

first costs to need of which don't we look carefully cetera. developing with productivity said, half then we ready we we programs, appropriately is in with our at going mean next et because in input to current pricing comes doesn't on believe, point get as That deal variability Jon's plans limited. year, to it the fiscal year, the innovation, to be the But

Operator

Our Teixeira of JPMorgan. from next Andrea question come will

Andrea Teixeira

than but tone the the FX? quarter more to or any than of in so, it in pressured fair or it from line, better top second coming understand EPS you're changed. back anticipated getting in both your fiscal, EPS step we it leverage in quarter bit And and better on then coming better you productivity guidance, now if the is just headwinds on your will? midpoint is I growth, mean about feeling if then say is and [indiscernible], range the to organic I the a how even the like given increased regards to If seems the want first changes, if to operating

that quarter? one aware in like I've getting should there there your to material And up be the clarification disruptions in terms either in we fiscal anything quarter, of questions been into that, sell-out. related wasn't the suppliers. understand anything is sell-in, a third of regarding to called I about in out the anything of catching December you or just that

Andre Schulten

what lower tell of and delivered right? of on core you we we on have So remarks, in in guidance sales rate, would to when at when you foreign confidence both say the At front we prepared I year, exchange related the growth organic we guidance, you end look EPS. is the what mentioned I'd look the at -- the half moment, range, good the visibility to and what

and that of delivering have the said, mean a range. progress as end. of the shot to corresponding doesn't a picks business the therefore, some the good up, lower tensions don't But deliver, we around middle moment, if the you to line of the if East range to would at Europe continue at we we and continue top That the make midpoint North point America in And China, I continue the Middle in at to see EPS. shot have easing if good we and I the

have team look, point at what we solution wanted points disruption, we you management of basis the of quarter. were intense by had XX operate operating system system. that worth we that orders assumed interruption, us through about On And would backlog been we XX a the the give building main half back backlog visibility work we -- that to would of when we get backup that seeing. and to transportation We up of a to guys on rid get saw to experienced the

the able then driven no to in not to us quarter-over-quarter December. back strong better. the orders backlog process and is were They team by also only impact operating transportation get full management the on through able did There system faster. work were system outage. way late They The

to consider any So there, just the no through impact us to team work unusual great by quarter. without on this effect the get

Operator

will ISI. Question Evercore come Robert from Ottenstein of

Robert Ottenstein

your and know a I China, get doing developed SK-II's as any into apologies to on but of but Chinese the are wanted you're Chinese I that consumer, consumer doing doing it, then better, the missed better, and Just if January. the health quarter on the better, just first, clarification brands commentary

follow-up a So that. on just

main And is innovation year. then this my question on

XXXX. You any bringing sound to kind think quantify calendar way or to of the business we impact top in versus on prior way to and you're bottom shelf that? out the that Any this positive it's in upbeat, so whether of that can terms and there years? what try excited line incremental on Is the model of expected more space

Jon Moeller

Thanks, intimated commentary, Chinese From his consumer in of a standpoint, as still some Andre it's a Robert. challenge.

really So significantly. hasn't changed that

at Korea are up What about? quarter-on-quarter. though, We talking to example, in some significantly countries. in that number and for business those of see look we So Chinese our of the actually Japan, travelers it's signs, pretty There SK-II if just improvement. I am reflected

So that would indicate to willingness spend. more confidence a and

growth still growth, and that's to an of even is growth out to The dependable China. will premium know, a some and why that is of in not price in take we're and ahead But confident statement struggling. broad our still woods. bit growth swath SK-II of actually And of product. time Andre society that is consumption get a that business little says not of very shipment the is itself, That's, I indication confidence. as you it with agree the

Andre Schulten

months to was Jon down categories XX best confirm what was have, the X we is X%. months data dollar terms in market Robert, And in past Past our X%. down describing,

macroconsumer stable not much positive. pretty but environment So

Jon Moeller

a what Colorado. in of expected in seeing market to -- in marketplace over to evo innovation, because the we delivered of -- strength innovation deliver we've what don't program the we what and for to ability example, delivered we're our first are response seeing part confidence have terms the in of Relative coming numerical that we relatively consumer in I months the test to in have that's ago. describe vis-a-vis in year, we've next But to, year gained market -- X the Tide Again, we're the weeks. XX

not liberty observation your terms in in I'm growth continued some and excitement talk describe, market as a in the then, share. of, are to We're of went at examples litany at program course, general, looking innovations you of terms is in But And things of penetration confidence of of there those some I that innovation about. household strong. earlier. or through our our

Operator

from question next Herzog Bonnie Sachs. will Goldman Our come of

Bonnie Herzog

sales and about you organic how likely your trends your if to lower deliver margin end, come tailwinds year, touched this this on, decelerate EPS flexibility if guidance of your further much about in have you gross on thinking as kind year, curious thinking guess the range? at I guidance moderating

think And you reinvest then potential lower might your your to deliver color to just how a see on need that, do on your Any continue you business. levels of to ability in the reinvestment bottom to to line context your in guidance? that about

Jon Moeller

commodities headwinds innovation. over XX%, about Bonnie, X-year in with and on spending significant percent of increased currency, period our and items. that modestly. through increased We reduction earnings our X-X when grew I'm there went of commercialization really in innovation, a a terms spending of we the our We because years FX, on we those talking profit

our So that's mindset.

just And innovation strong a pipeline. described I

We in frankly, that we'll in fully I that to that but commercialization that's Currently, that that pipeline. to accept. be we will, But going very and and don't be come transparent what continue we it's it were then to if will of need means bit a if think support And to that innovation. invest we're innovation about clear the both And case. not. little lower

Operator

from Next Filippo Falorni of question come will Citi.

Filippo Falorni

more little a business. to the on wanted I Enterprise Market color ask

consumer give still you countries the can like a Mexico? Market color there about is and growing solidly. more talked Enterprise Latin You health key How on America? Europe Brazil little Maybe general in

your half of easier the comps. the And return a you're expectation in to second growth Is East, 'XX? on starting to then of Middle cycle

Andre Schulten

of quarter In a in delivered base this XX%. aggregate, growth X% on

across impressive markets. and period the growth base continued quite So

the Mexico as making same look true the are difficult great is at consumers, I in good progress. plans Brazil. for the X that right have If more we executing. would And now, but you And half are I describe we confidence

So strong. driven but easier the bit those in Latin X would very Enterprise up becoming Encouragingly, an quarter by given by XX base the my Europe basis plans volume in core a growing are still little be a base share across America, markets. growth. we point Markets acceleration expectation partially also were growth, Markets strong Market of Europe points. on in Enterprise X% in

market context, about own also execute. good the ability we So about but feel our to

we The go-to-market plans Latin Enterprise invested allows strong. The look is the strong. last plans to in support fully Europe are innovation the the COO thereof. I remain there huge. The very opportunity very was that us profitability in And innovation in America stores our just and phenomenal, have with both Markets and and week. are

Africa, East, stabilization driver We the remain will the and for second environment here hope go half. that sustaining, more it progress that, from main look, be Middle a East. Asia, is I us AMA, think But will can through Middle difficult there. the in we

Operator

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

Christopher Carey

if few you'll questions. this one I'll ask to question, specific like I'd category allow. category as single a count

bit timing business, consecutive it's Care a is would double-digit growth Oral low most attribute which seen period. quarter? digit, some Family Care quarter sort the over in you the reversal of that saw, business, with the second next the In what than In below to expected trend single the you the of of prior we've X-year

history the resilience over a of the spent Clearly, you time, you'll sales. And a highlight challenged some and bit investments. organic is leaning one more in and that those contributor at a Baby more pricing been investments. categories Jon longer-term be on as did on in some then time has that this of to just business, P&G bit making you're merchandising

drives questions just bit we why any sorts more? expand What that next specifically the on So that you about of into dynamics X should timing decisions, a kind Care now? of thinking with be Family Can of going quarter? and and those category kind

Andre Schulten

by one. Let me take them one

And mentioned, I from the Both led pantry October. had port shipments we had Family of consumption, loading standpoint. consumer a in So hurricane very strike saw very as those we October, Care, and importantly. to we in and strong strong most a

some there in October. clearly So was up-stocking pantry

last January We've shipments a thing the some same strong event. That's had But inventory. pantry of anticipation late in is in [indiscernible] typical. December saw happened also year. We increased there

History loading to while. would quite pantry come a COVID, did. on never hold during tell always this it us that We've and consumers for we tend to expected that, that it out, would seen

for is year. the So going say hard to impact the what

we've for that appropriately pantry guidance, inventory in reacted loading. I the but think it's

majority expect the next that quarter. We sustain the of will through

value would point And we lower Power the Number things. iO as us. Oral so you up X to one, the more to iO innovation, do roll of the accessible across price full that, I Oral we'll opportunity points. full think both to X business down chain Care become iO Care, XX, and I lineup the out will

X more Europe, point markets like in to the iO give price lowering penetration high access in us Even will with consumers.

inside campaign to XX% We the seems have That consumers. of removes -- resonate XXX% of on plaque building marketing strong very Care removes a that with Power Oral plaque. only manual while well brushing

where program, focus strongest heavy on we to an have also strengthen. whitening taste the had opportunity We including innovation

half, acceleration. So all gives the me that in that see second of confidence we'll

investments both Last Baby, to and innovation. we in point due reason on make why is The potentially on to communication in promo, Baby. want

entire We have while to a opportunity lineup. the the talked innovate across for continue about to

growth see the seen We've on in in innovation market Luvs. share Luvs We September. sequential the

we the So Cruisers. drive those to consumers give portfolio, the while and Swaddlers incentive propositions and the end continuing to try of the want to opportunity premium

consumers combining in-store to So a innovation incentive with to try and communication visibility about understand it's and of strong really ensure strong combination the benefit.

is the in which categories the create of to of top do foundation All growth one to those, so. Baby,

Operator

question Next Tong from of Raymond will Olivia come James.

Olivia Tong Cheang

here. X-parter Sorry,

expect First on you normalization. mentioned you China, continued

of how is ask comps course, in this than comps? easy demanding XX I category minus second of And less improvements you're half, the versus this little much market do comping growth aren't cycle you get as but particularly because your estimating that So they a that share quarter.

to already not question to about talk you've of different goals, leverage to of go that broadly, then you briefly does many necessary but in specific the more investments answer to your a it level And broader you made? you if Or just can could that higher? achieve talk brand about the have support investment China,

Andre Schulten

elaborated right? would expect building, brand of tell go is sure, some some So comps. on model improvement to market, for China, on distributor in our I'd interventions on And business. the Olivia, both, we've the on including to what made on. We all improvement that a talked about innovation, We Jon more the it's as market expect we, would bit forgiving cycles you

be bit to both. a of going it's So

here. of bit a Unfortunately, both elements means we have X hard-to-predict

go in this could organic result So aware more growth we hope we this China sales in going are either back also neutral half, to of is way. the but that fully contribution a

based investment us opportunity. my see you adjusting on on an the be, take this standpoint, From would

what have That XX half. of base period basis in the We more couple of or a in points you years would investment even front than the moderate before. have incremental seen was

And reach, frequency some of doesn't the experimentation that make we we we sense where talked sense. where and concluded about think can makes I it and how it and push far

that improving we're now mostly quality where optimizing go So And and content on playbook that half as we we're on within focusing clear the now innovation. more playbook goes. X into

continue in years. we've makes seen albeit we So sense a will to at it invest last the probably than where pace slower what

Jon Moeller

I Yes, Olivia. of a question, add would things couple to your in response just

XX clarity Just we're number from index one minus a isn't on comping the standpoint. last sequential what nit just quarter, for That's that. clarity, an so for

channels the in categories of At and forms what be talked -- and -- the he strides in making country. or terms commercialization Andre fastest-growing in said. optimizing more fastest-growing We're The context. advertising other with time, to significant investments marketing, I within of profitable agree same and about the that

be we'll in expect will So be I saving. while opportunistic we well as investing,

for shows testing effective. money, it's a utilizing some of the of and that R&D our that or leaders bunch For saves bringing That in-house our of of resources example, more key and activity. support as opinion

cost that, which the to frequency, as we're down. working important. reach it's are as which But it's of delivering So simple not and level of also the bring

Operator

BNP will from question come Paribas. next Grundy The Kevin of

Kevin Grundy

Two-part as slower to value M&A pivot be looks like thoughts and appropriateness like what a drive just One, here? on capital it's shareholder to to potential going a to of allocation, question. environment I'd growth avenue updated

buyback, sort accelerate including underperformed thought has Procter's, there internally context, then value? any market. versus the to pace of been to S&P And stocks, to are of consumer the that historical averages shareholder respect repurchases drive of have an with two, the avenue as staples Valuations school below share XXX. In

Jon Moeller

the it take the Kevin. then -- share to repurchase and Andre I'll question. M&A take thanks, add I'll move question. your can to

#X part the which in our is simply both The kind sometimes that of for and categories, market brands been of the would #X it we model growth acquisition starts any size. positions of as the with the typically any same most in because period #X environment any economic of answer and -- our preclude acquisition is wouldn't some is of it's contemplate here, time

and before. the parts their are other X fragmented we compete are about that of in attractive, those And constitution. in Care, we categories another current There that Health are is Personal Skin specialty much like, more One that talked that we've beauty. is

don't responsible continue extraordinarily -- hostile engage be -- don't be to to to attempts. in We pursuit any potential regards of We in acquisitions. we're going

and able way asset we purchase that can the then we to be that So in that available, to us basically, assets have be to have highly of a leaves of sense make create confident value.

M&A an of So that's kind it from standpoint.

repurchase. Before over Andre, share just it turn to one I comment on

return to to this As Andre element prepared to significant of billion we're a But I'll be capital over going as billion returning prominently. to play that, I between And to with said share of allocation turn expect Andre. repurchase our would year. cash to in $XX it his approach, remarks, shareholders general dividend shareholders and $XX continue to

Andre Schulten

everything it. nice with have to not to on It's M&A, do you said Agree Jon.

makes we it can sense. So do it if

allocation, capital nothing the Kevin, new On here.

in the business. aggressively to growth the continue will fund We

increase dividend. will likely the the We pay dividend, continue to

We will is the makes do target a play. and sense That's share logic really that to And in M&A find if that simple apply. we rest we repurchase. the goes willing shareholders to

an than target. So it's a outcome rather

Jon Moeller

we'll And if Andre a it we do it we that? And share And lot the isn't year. or a at as there that continue highest a program pursue about don't repurchase we is newly do why And will, repurchase publicity program. we -- said, every of, levels approach. approved you special to can. Because share

Operator

come Your next from Stifel. Mark of question Astrachan will

Mark Astrachan

Two quick ones.

the us the approach offset FX via LatAm, like where pronounced has strengthened to on remind were Just dollar places in pressures pricing?

China a seems bit And the then Day where at category little than Alex it that little Is suggest, Just but like China performance improvement at of bit would Is commentary angle, geopolitics it otherwise. weaker returning guess improvement? has it little a Investor the the part anticipated would the It the was any perception just would color improved? a has that consumer SK-II. the better think time, helpful. is Mainland highlighted I to obviously, your there suggest brand, Chinese I of be both? bit improvement

Andre Schulten

foreign exchange different. on not Approach is

will that. relatively innovation that there's follow to discipline has with be Markets want mainly, to LatAm Markets, in just of to market exchange I So and across foreign approach we That We good Europe worked for playbook. continue a in that's part rate. to will reasonable. And want AMA. and possible we in Enterprise we'll confirm, price Enterprise combine pricing wherever And well

On SK-II, you're right.

easing. with I Number the think, I to brand I consumer. made Japanese is think it's brand importantly most significant sentiment, whole actually China think, have in see building. the dynamic one, investments We, strengthening of brand good the

us, to were well. we've ensure media to we and worked able as amplification the and us which We've get efficacy store with both locations. the soon benefit As coverage, standpoint at presence, the that so of from department our back personnel a consumers broad into see product, of can has counter standpoint very high-quality done upgraded strong a from find

that contributing and And build launched reestablish. is want and we've in to which the innovated. well market brand again, is proposition we We've premium a doing very equity to the called super LXP,

that of contributing. all So is

And is consumption actually would say would stronger organic element, you I I -- tell than the sales. is last

line to different with Specifically that return Jon's in in increased retail, also travel Chinese is sales consumption but travel we the earlier locations. see the number to still negative, continues comments

think, So positive SK-II. outlook on more generally, I

then at right Investor have would what we Day. given You're

Jon Moeller

of bit your just the And of continued ways on the that's in point social terms you of is how words, down through in improve. is -- build other The And of references. in of as track this that, positive cross geopolitical of are you we -- in it little you've terms brand the much to dynamic, those affects number higher a sentiment mean, and comments so behavior negative I that comments, one than significantly and current to the media SK-II, sentiment out consumer know got geopolitical number question. rightly never how

component, The he as is mentioned -- what's going he is equally significant There of which is also part is part -- yes, improvement. but branding suggested. that on. So an an that confirmed, the Andre

If right now, fastest-growing you the segment. look within brand is SK-II at the premium segment Care Skin that

Andre base to thing to because look And simply going strange us -- that's of Now But quarter-on-quarter. be growth trends to at as given is what's so the indicated, happening consumption period to important some the on dynamics. is SK-II confidence. follow

Operator

question come Next from will of Jefferies. Kaumil Gajrawala

Kaumil Gajrawala

little interesting more question health easier. few different aware you bit to a a slowed if bit, It should a little Health about, a bit if we down consumer the Chris' Care. answered To that be can there or in on categories. for was But just dig -- be maybe know. comp we anything It's in

Jon Moeller

hasn't the The period significantly cough/cold December, that of at trends there for year-to-year, really through of month which quarter-to-quarter by are season, least existed the the most which is currently. results impacted we're time reporting

prospects are business cough/cold cough/cold continue share. the outside very be [indiscernible] that space build to the the have the the way, We for By broader and growth delivery very happy the space, of brands growing we within continue about growth and well. to

So we'll of growth. that's And going have for but wish don't we'll illness, on. More that's want -- slower I growth. kind to less what's have illness, higher illness,

Operator

our come Edward Lewis And Redburn from will Atlantic. question next of

Edward Lewis

at the consumer look side. the superiority on of I guess, to, wanted focus particularly on just the plan, I components Yes, value

clearly X%, say, So pricing and still I look look is around of at getting -- the back volumes. this if pricing. positive average, over, quarter, it's last I X it's quarter flat another But years, up on you're

share possibly focus able So should evidence you consumer on superiority getting the of and the years from I to could whether sort then telling in of what you're is you wonder more side sort you value pricing quarters about superiority or plan. of to -- on the subsequent whether seeing talk confidence you're just if the data take from with the focus being we

Jon Moeller

more as data forward efficacious the have amount ability to of more do pricing. to we a the indicate referenced modest and we as we continue The that to think taking top that pricing we I produces bring be product combination better -- will us consumers. we to through that contributing move that a a experience with innovation you as more bring line

Operator

of Davidson. next D.A. Linda The will Bolton-Weiser come question from

Linda Bolton-Weiser

SK-II of the I You've Beauty the that quarter. and saw China, talked we Beauty But improvement terms focusing you're U.S., side it. quite contributing in if share is a in And whether about was in curious on Regenerist benefits market the in U.S. certainly, a grower paying bit in any what more core that's like Olay to of about changes? doing improvement the as

the in X% It was on actually quarters. why flat overall. whole up volume previous And also for just been for sort the a where segment volume to was of you, little had curious down Beauty

Andre Schulten

and America, Look, America is let and pockets strength pockets the me of a North with it's opportunity. true story of it's some globe. and of start similar. Beauty And North -- real that's for

are deodorant or whole our the whole the If growing antiperspirant position in that and it's across business you look at segment XX%. brand body #X #X the we And in our segment. body brands U.S., have

Personal Care North America is XX%. growing

strength. strength. Care is source so America So base Hair again, up of real North X% XX, on a of real

out Care we innovation And Now Skin the down to you in opportunity. America are point working is increase jar an specifically the North digits. Skin Care is business. double on

need core that channel, in we But shift just launched very innovation yet the address. business I consumer of super a Olay the are space to not well. some we saw benefit and we've doing enough in to big offset where they think, The decline club those but distribution new that are jars, melts also, in the serum, so changes

Skin on And same strength on Personal on dynamic strength with Care. Similarly, Care, at Care an again, opportunity logic, globe, the same APDO, there. strength on Hair

more only The has or focused for anti-aging market benefit. tone the in The is historically multi-benefit Olay product. brand out I'll been towards call on China, example, point shifting

launched we've going so is in And innovation direction. there, that which

categories do across to within Beauty. real work other So on the strength Care, Skin

Jon Moeller

China your higher the of question not on again, our to Relative that any China. than broadly volume, presence expression And -- China we'll in a still we're has use other volume of in categories. out on Linda, Beauty woods,

very that's have but which X, sales a X, comfortable believe, periods you now presents has realize weighting, I improve. while When to were China going challenge. positive feel So a many at I volume to volumes, that to thing, in been minus is Beauty continue look you

Operator

of question Robert will Next TD from Cowen. Moskow come

Robert Moskow

me that. Can you hear now? about Sorry

Operator

you. hear can We

Robert Moskow

where in turns apologies. quarters. been My about This flat wanted has is happen? here a the in where line pricing Yes. any the just the is I to where there imagine in different scenario won't pricing just could there sand And Or negative? ask pricing way. is quarter many you first that

mix driving and know it? if geographic? then that. continue to positive, I that to categories Europe Is driving And within be Or assume we your what's that want mix, is there outperform, U.S. is on to it secondly, the and something that's Can mix? positive will

Andre Schulten

can please. I jump Jon, start, and in,

an that number. organic our consistently growth So price is sales outcome helps

Jon of mix our organic out this, of mentioned think XX XX positive sales to quarters growth. I price contribution

just different And timing driven which the pricing falls outside or to pricing we take foreign of the a in base And mostly pricing driven like by that our the in tend we of lot cycles, is pricing with innovation. cycle commodity because of heavy quarters. rate has period, innovation and exchange

so. that modest pricing our effect contribution and of will foreign with to generally, numbers for sales continue exchange rate driving But is pricing do Markets and inflation to in pricing innovation consistent growth or that Enterprise of organic

is less mix. mix I driving focus What geographic on here? would

that trade seeing is gross negatively. up think positively I margin the you and we're our within impacting top And the see what categories. line impacting line

really within even mathematically, unit, effect exactly the the but consumers So negative dose per laundry lower. as the on you on slightly mix, variants, and performing positive pay more we gross margin more we per the of into That's the line, effect want. unit unit, they highest is of unit to dose or effect is see make from what the mix profit liquid top line, gross margin which detergent

dynamics healthy on both. So

dynamic of mix both the and expect those, pricing innovation continue. the to dynamic We with

Jon Moeller

is no we maximize that do choices we're going and we'll be to pricing. the responsive in to or on -- And there going value, that consumer line to context. what We're straight needs -- red maximizes line make

of all of But the have of business We're of outcome It's of pricing. part on our focused that working time would an is been as not decisions. pricing And I've that in Andre process. said, value just question the this I've on creation. ever I negative thought series think we about kind thought don't

Operator

final Sandler. from of will Piper the Your come Korinne line of question Wolfmeyer today

Korinne Wolfmeyer

retail the And of partners Are just little you're you that globe. are about them? going conversations more that normalized? with really the still or they on how of to inventory your being feeling how into some want a across of your are I What touch been have confidence feeling you're the back heading fiscal about half how levels -- cautious orders? bit with then Is thinking year? the

Jon Moeller

So I with CEOs had X time of the I my of just who the of customer retailers. outside are counterparts, meeting had yesterday. with large largest a just European top-to-top U.S.

The entirety is can conversations focused we growth most we market growth those market of how and on as do that pursue efficiently.

retail lot our together out -- has both we ourselves supply that results, our in and bringing parts one together, and that for supply to chain chains, of because how significant it it's all view power working of we to used respective optimize a call -- So figure produced there's partners. but

kind have very front positive that's conversation we those now, the of In -- is U.S., opportunities so right of generally the focuses So us. Europe. and in on the that

and have it the But that just U.S., the well, retail doing in Europe. extraordinarily that of for have environment trade more In currently, conversations challenges. same described you pattern can universe imagine slightly are across the you general, some the channels different who some that customers. And I are follows in of retailers and that retailers

Andre Schulten

right. All

Thank for in that today. reach Again, of hesitate you. available good We're second with pieces summary, a moving great progress time multiple the of our think the cautiously throughout call. please questions, I to Thanks and have optimistic don't your across a lot so good concludes half. rest follow-up a quarter, any day. geographies, out, for

Operator

conference. today's your you Thank participation. concludes That for

may great now a You disconnect. day. Have

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