The Procter & Gamble Company (PG) 20 Apr 212021 Q3 Earnings call transcript

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 full & measures with provide perspective Relations Procter non-GAAP of posted on

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

morning, everyone. Good

are on Vice Relations. Investor President today Chief Officer Andre me Joining call and Financial of Schulten, the John Senior Chevalier,

up and sales XX then quarter, XXX%. provide basis share Let sales up through cash turn over strong XX% points, earnings me X% X%, up quickly quarter, Free to three Organic over summarize up to stacked. share the quarters, are additional per fiscal on quarter perspectives. productivity core X-year Global were organic another X% fiscal year-to-date Andre XX% was the it on year-to-date. up market up flow

the to fiscal. bottom on deliver guidance are this top We twice have we and raised track line

estimates and which more free highlight, for last through. for One XX% the very time to We Tuesday. will announced us Andre increase, dividend return are which a cash increasing take third productivity we important flow cash shareowners, reopening uncertainty team some will describe in others. volatility, priorities been extreme managing I renewed The later increased through challenges. severe very with again viral markets economic impact has successfully in COVID spread, and some and lockdown

Suez challenging Argentina, with and Some to a high Myanmar environment the bottom others top demand very a event in quick cold cash synopsis very results transportation and results volatility; our a with commodity FX strong environment in just challenges in with are very countries cash and specific impacting cough very very the thanks supply; mild shut; a a and operations like line team. huge at of line, Canal; season. That’s challenging growing essentially market-specific mismatched like blockage rates, Lebanon; dynamics of

perspective, more Andre? For

good and morning Jon you, Thank everyone.

X% strong down with line largely another focus growth of ago, line grew European region. the were and year said, Jon volume Overall Bottom Organic strong cash two impact X%; due mix. sales regions. Latin was of across line. pricing, sales, for top America, X% and up along the Organic our strong up market the and with Greater As in period X%, points cash were XX%. returns mixed markets in shareowners. U.S. X%. growth China good the largest were markets points to in X share March positive were of generation were markets within the growth up quarter, up X to Enterprise quarter markets: was with sales X%, down focus of X%. Japan mixed and up was region. lockdowns also organic sales

line year in the growth strong We Middle competitive heightened due Europe, market strong in up most Home ago sales Asia, mid-singles; Care, singles; down Skin Personal Care, East, categories: with in organic European quarter Care, and were Hair delivered X%. up and up markets Grooming, Fabric Oral high-teens; Family Care Care, enterprise Africa, and and and high in activity a in Baby market to share singles. down region Care low Care organic softness was singles China. were Europe up to trends singles sales basis. softness mainly down low on and global in but mid mainly due Care remained Feminine

category in over flu year-to-date weak Personal aggregate were last of global on sales share this months. trends, U.S. for base Vicks with by XX% past quarter. is basis sales, quarter. X cold category share points for was E-commerce the no XXX XX% in month the down March Importantly, sales fiscal X notes period. a up past than in E-comm Health quarter our the outlet quarter. this Care shopping sales in organic Despite down and mid share XX basis trends the market up were over in of the Baby at points difficult weak season comparisons all top very points of U.S. XX% year. singles the Care in represent basis were growth respiratory value versus sales driven more the change about up XX the

basis cash Turning points, up per points, $X.X up billion core currency was dividends margin XX cash has line in Core results impacts. earnings excluding billion earnings, with and to $X.XX, at paid free was We in currency share dividend cash consecutive in XXX%. dividend. XXXst which billion future. neutral a dividend, announced up basis confidence EPS returned a X%. is XX% Core productivity margin year increase in impacts. operating also in Last week, currency our strong billion shareholders, prior our $X XXth in we excluding XX annual year, the P&G to basis were core $X X%, We This up with up and generated reflecting and consecutive flow increase operating in XX points, flow $X in repurchase. share

So, up free cash XX%; global $XX Adjusted three EPS, billion returned shareowners, of to cash quarters which organic all-in sales Jon. you, ex-FX, XX%. growing, up the productivity to up flow into with core of earnings. share Back X%, is year, XXX%, XXX% value over

guiding have our we period. that shared and in As priorities in crisis actions three choices been discussions, our established this previous have

colleagues of around ensuring availability the health and the P&G cleaning, our produce second, we the people of products maximizing hygiene world; needs. is families and their and First their with to health safety help

we strategic the who supporting is this people in growth completely choices, bottom and value creation. for confident balanced Third foundation with pandemic. are are and global the communities elite top on which which with line These priorities long-term of frontlines are agencies remain the priority and and congruent our

use retail superior products market mathematically market superiority: communication, and with our categories builds superior Superior focused offerings on in with these partners. all share package, raised Leading builds in aspects market execution growth role have on execution the plays retail performance growth. choice. have and we of daily brand value. our significant categories, delivered offerings We business performance-driven for drive portfolio category a where product In brand bar

we successfully attracted all In fast thing their two important To period. $XXX Baby laundry over the to a Care. XXX washing line superiority in But one Dry use maintaining water. cleaning of still ambition We Hair absorbency, many new organic and up the innovation, the Difference, significant sales as do we healthy technology to and forward and well brand of new manufacturing are in offerings. recommended graphics XX% than of expanded another to ensure growth, with contributed latex. reduce superior delivered advocates investment Shot formula can ongoing lower these in points comfort brand U.S. and importance this parabens cut have XX% queues around Dry drive were the Every growth regimen skin. to treatments. continuing recently Pampers the year and step, design, to Quench continue represents margin took temperatures, of in packages refreshed and innovations carbon comes do our and Powerwash superiority of subs growth towards Dawn’s to up and up become and temperature on all million the underscores launched wash the has addition to led provide important very the Its focus at has crisis over one short-term performance. the to meals and being premium X-Minute step to expansion, were need by Baby XX% performance Powerwash These machines. behind and Baby months. in conditioner improved Tide and fiscal year consumers. and as Care continue Makes growing It’s health powerful innovate leakage cold was all to on distribution online was segments product year-to-date Powerwash no across to upgraded number Dawn commercialization. more to new are XX superior spray segments. from highlight is as water a care laundry. reestablishing a protection of Ariel’s mid-teens communication. and innovation for leakage improved the just or and productivity. starting China strategic Miracle campaign, early just improved products dish the market in laundry’s the the The footprint treatment Innovation full regaining in more ago. with Degree contributor and with over improved regimen launched competitiveness every need long-term top environmental hypoallergenic at and we the balanced washing vectors. to the launch and bottom in share unique consumers better from outlet more decarbonizing claim this U.S. conditioners protection life, ongoing so need consumer superior invest – China of welcome the basis pediatrician launched heating shampoo examples that in the expanding single introduce packaging past superior to Lowering of end in and displays impact providing manage to through in-store Product in for dry XXXX just step masks a Pantene brands, consumers’ to and packaging includes sales to and while are the the contact. this, initiative Care, Hair including over We Pantene cooked current began last now Ariel messaging an most market this are quarter mid-tier and Pantene shipping month online home. strengthen Greater

facets disruption In A current new to balance up in for of and cash We also that and agility constructive Success and important. productivity create competitive income mindset comes are business, savings industry shape more the that cost and industry even trends across technologies constructive highly adapt requires of with our agility the disruption. down future. will change, statement that the the all mindset the our in environment, are sheet. and and our driving willingness

markets, have that sales organization well constructive executed Our which build supporting us will overlap post new recent structure around superiority, world. We each are other, or and were share and before during demands, the us to disruption the agile turn profit. strategic independent volatile are other. organization productivity, grow They choices new seamlessly continue of and not times serve reinforced crisis. and organization following these and structure our each in results believe well redundancy, delivering well. more They empowered, strong These yields priorities a accountable deliver little we more culture strategies. grow served strategies on some crisis, on to against with portfolio, These

and hand. our prospects optimistic We crisis like about generally our are

a to closures Against be highly this in be growth. chain We in line the crisis many unrest straight line world remains generative. cash move we predict. through economic expectation bottom quarterly will With undoubtedly prospects the discuss that the an challenging number that ourselves of Andre to cases move more context, to will continued experience backdrop, some also affect the and distress to results back In line category hold guidance. growth, disruption will been. Risk and are high. social continues to parts and they volatility of countries, of continue Channel top There to for of many to as worst the and continue. are we supply likely COVID and unfortunately not have difficult expect

for we having EPS for fiscal strong are metrics us behind sales and year. guidance three growth organic with twice and quarters outlook core growth key across raised maintaining the our So, all

our increasing returns for cash to and flow productivity adjusted cash free are outlook We shareowners.

continued conditions reflects X% both base volatility the period continue to X% in dynamics, sales continued in expect year. in and including range Europe growth the challenging period the outlook We fiscal market This U.S. China fourth in and Greater and base quarter from year in markets. current for and of enterprise organic to a soft

Commodities are XX%. approximately our and for after-tax to negative swing Our $XXX more X% after-tax quarter. exchange impact $XXX affecting the now costs. of per core tax. a This to headwinds million of in the freight a headwind of million of line of million $XXX This earnings is $XXX higher be million than now forecast our guidance bottom initial year includes range after since of fourth share remains foreign fiscal much with approximately the to guidance outlook this

organic As above midpoint guidance fiscal today, for of the we growth internal estimates year are our the stand range. sales

are trending we core On the the line, range. bottom of the midpoint towards EPS

raising We target the XX% our are flow year free productivity adjusted for again now to over starting cash XXX%. from

cost shareowners to our current increasing outlook This market plan to is growth obviously are faced geopolitical disruptions, prices of $XX range. anticipated are additional to billion from rate closures in expect guidance billion fiscal over challenges be $XX stoppages share year. based rates, We currency up billion foreign repurchase exchange not we return this estimates, commodity next additional we further fiscal pay dividends cash billion. significant Combined, and outlook to $X for year. production increases, this weakness, larger commodity $XX The cost this and about to or approximately store major year will commodity on within

offset will impact We increases. portion a with of this price

of Our in will in high of timing go to Feminine and range the brand have mid Baby The single-digits. increases adult into businesses vary Care announced mid-September. by and increases Care, effect United sub-brand that incontinence and States the exact price in amount

with increases opportunities innovations, allow, will close for new adding product As we value couple consumers. of price a

markets material additional impacts for exchange to and are raw and moves. foreign and we need Back analyzing are closing pricing Jon in assessing categories the other We comments. for

Andre. Thanks,

Our earlier as business I before the crisis. strong well momentum exhibited said COVID

and We partners the crisis we behaviors our have consumers further positioned to heighten our position retail post-crisis. and distributor of strengthened and and believe is new during needs serve to P&G well

morning We hygiene to of of serve challenges we strategy volatile products needs this employee a overcome maximizing the will mid-term, with availability and and our manage crisis. and have times health and cleaning, outlined this priorities consistent could safety, society and immediate be health many ensuring against helping short to the of the what again,

back. not forward, stepping are We

our We are our consumers doubling serve down and communities. to

be call you when society’s the that, we of in questions. for interest take interest in forward this look with the forward We shareowners. to With to join are year and the on us will doing look our end talking long-term our will interest, provide quarter in fiscal in ‘XX. David through our having and we to initial July, We the happy outlook

the comes Thank you, of question from with sir. Mohsenian [Operator Morgan line Instructions] Your Stanley. first Dara

Hey, guys. Good morning.

Jon finance So on for been have almost the pricing corporate you in the now. XX role front, leadership years and commodity or

are I you put cycles a can going apologies share to we mostly on perspective increases? the But this know through us in your bolder want of what So, of seeing or higher front, but view market response commodity just the And those longevity? do that, pricing? give to the even lot into to a be Is what forward in not but on market obviously you even as is to on that last a it goal sort It’s a fact then there? risk past eventually? at pricing precise Is of that commodity this with to and share bit pricing versus just terms are any some pricing it change position. timing And a and get to spike to cost large and magnitude of commodity in might this you of to perspective it’s question, end the gains position on holistically the would lag, and take ultimate if given cycle be magnitude you kudos in that strong offsets cover? willingness pricing, Thanks. for but your cover the on pricing, are fully I fortunate be gains of obviously pricing love on work multipart increase, sense then nebulous how hard heading some to sort of of

Thanks, Dara.

obviously which is in with First, commodity that to one period involved that brands, prior industry move long the have move to they brands seen that pushed of have and over increases When time. everyone, not own fairly they been both can significantly price. in period we costs time I difficult this retail of affect including bad. has modestly more commodities comparison is label much cycles, manufacturer That’s all the a be of it and the When this, bigger regard. in

we of math a combine we bit that but increased opportunity want continue restore and across a to increases, of also that It’s covering markets. margin-dilutive, are disproportionately, we that the cover – to blessed portfolio. or price markets, be little strikes pricing which our because and is which balance, and And important very overall will certainly provides can an that looking when value It’s is have cover that, objective in with I We to cost should market, is innovation do We we we to didn’t talked innovation the I the particularly our do think – strong cost coming inherently We define margin. increases. about value we growing market right perception to say manner. emphasize which intention. in grow value-accretive If have well, holistically. to and

lose We not share. will

We build will, share. effect, in well, necessarily

is that to talk easy of All about.

is execute. it’s brand, very All to by done of hard at And market. level that by detailed a

out its will it significant make, into well. situation. manage so last increase us back will if going across this very mindset feel system, a as about play in of productivity large point and company we topic The important forward And activity And the the and cost continue had I productivity good differently world. to opportunities help to endeavor to embedded be this fully past, on this to that yet to increase this cycles part commodity not we go want

Alright.

line with Your Wendy comes Citi. of question from the next Nicholson

markets markets, markets, option about easy supply To and rampant, the some the good of Hi, chain don’t operate, a COVID I those in X significantly plan India have to for took at e-commerce the just all that. for e-commerce of like but months, of it a you, risk is how able off, am But disruptions, those wasn’t were lingering turn as months, there you your negative much of XX that this nearly like offset morning. is or over in to or extent you for last about wondering sort to Africa, thinking the actually ask and that know more markets just the expensive I worse, how a I if regions planning approach you developed manage of runs that enterprise Thanks. in some to COVID the gets wanted place you to other are some significantly you India. problem, point? the

challenges, Many you, important do talk represent Thank I about Wendy. little markets it’s we these bit. a that significant think indeed of and

our We And as happens, Turkey affected. No new in consumers Brazil, hospitalizations, in markets markets way. The affected. has higher number than need. help need I means never a knock week a as here why of situation of been. was real and we than the number do today. been profitable we, enterprise cases, is their the is appreciate of And to on the health at in that’s case. a of number unfortunately, the Consumption is significantly So, GDP The citizenry. the These are time in India, result, ever do markets frankly, it’s the weekend profitable employment have worse have to more is we like last these infrastructure to to serve than provide some over question. in been when and ever nor the of to not down this the conversing better markets. time subsidies deaths, healthcare that sit financial wood,

So, is that’s the significant. operational discipline required

opportunities markets to continue We your bottom top question, I expect, line to will to be make main our for company. will of that have the these offer choices, that will point growth fully but and

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

if you little out pricing yet only but on to on baby follow we specifically, how you baby continuing. – if what see we call Family that U.S., Kimberly-Clark I lag guess from and Yes. to decision incontinence on bit your does seemingly higher seeing and so are you competitive X.X-month Thanks. talk feminine about heard that destocking more what so, doing in I impact retailer categories. because Care and in curious the guess, X-month family, activity, a And just Can on a announced and and not

anything price And should help how context for activities optimal drive specifically, preclude Thanks. other might just potential higher go net not of be price in management kind I overall in price you that have what’s in the de-sheeting So, of am guess, baby interpret about category I we today of that increase? forward. positioning growth. and relatively, growth I accretive net kind or announced tactical revenue doing other is activities guess a tissue there that investors thinking might as categories family that ultimately list

to Steve, Care ask there. was recently, close let led and on he briefly family, to most me is he since still very happening Care address the then comment to what’s am business going I Andre that Baby U.S. Baby

standpoint, even the to are on some ask own pre-COVID I significant. that. as a and store of at we Care to – incontinence, to the where We in continues We But increases are you Family will the are home our the is comment more near-term for going mentioned those just in in the costs simple. that’s categories to the home and pricing levels, are the family be Andre above balance the pantry demand despite baby, adult be between quarter and price commodity usage very carefully. really X% the that completed. mentioned, grew From But largest X focused, that reduction we increases inventory. managing be very, you Family household strong. continues inventory are because baby. production rightly That’s that inventory, It’s Care in the

Yes.

the to the As early you and focus pandemic phases quarter think impacted Europe in I U.S. mentioned, of significantly in inventory due and retailer X build the was markets

we that next building We the do turning. results Most we is importantly, expect and see superiority irresistible And baby, the every successfully, all price vectors in on across tier. quarters. that to few focusing normalize every really the where form team over

up in where in us of have Russia, point. about being XXX U.S. In all superiority, excess invested we heard also Germany, basis Europe, value share France, X. significantly plus value have up share are talk a You points terms in Spain, of

scenario, time which same U. are in ideal we S. the the So, as price we pushing is innovation at bringing the

pressures will continue rates headwinds. be growth slower to and commodity Now

So, that. to acknowledge we need

a use drive growth. focus a Europe. continued we of also productivity So illustrated U. S. that have drive be element and we as that toolbox works we have in as value, model to But market will to business on the superiority,

Alright.

from will with Lieberman Barclays. Next question come Lauren

that I Great. growth Thanks. talk guess, bit I wanted a plays Good top-line role profitability. morning, to in, little the about

investment through So, see what material the thinking structure, it but just that top-line here, streamlined organization is from thinking incremental the not about X%, into the And X%, productivity, rather where see margin year of leverage, current you level Thanks. keep gross ramping to at particularly right operating up where to of today? at SG&A. that where sort is there – I fully profitability is are kind a rate speak to you how there you benefit ‘XX, just reinvestment is ahead that. growth related line, was describe it or but was also XXXX a then you in that, levels, of remarkable the business at commercial feel you to this funded But as the plan, the status to need would look the and your share spend guess gains about

And beginning together about Lauren, then Andre first you we make me I literally just Let the a income statement leverage and overarching that put the to to ‘XX. want asked have comment few top-line leverage for just comments, make talk overarching plans growth and – the are is about.

specifics not do not our apologize, I to do do are Andre just you in expect the I of our statement expect change. development, income it to about and talk have our to forward don’t but David, over I strategy we change. anything to terribly But I will early really the to expect, turn change. leverage. their cohesive about priorities to intelligent with that, that. talking however, about in business not So, that to I to model along July. we or talk look

Yes.

call your to X% we question, on our mid-singles, to So so growing – top-line. it X% are answer

to I some traction recent leverage. starts income in It have think what to growth have seen, the gain to We sales we and that’s statement, X% started rate really across see most above the quarters. benefit modest

which sustained a we to allows that’s are be. margin model Mid-singles spot sweet is So, growth for where expansion, we after. growth that our going want

and context course, in example, significant all costs impacts etcetera. the that’s commodity constant no Of of from relatively currency, for

monthly for on and current X%. Our changes be daily, to outlook between a growth, basis, and X% weekly, likely would again, this rounding market X%,

objective contributing of to disproportionately growth. to market grow is Our ahead by that

square from put Andre to impacts that commodities big or other outlined, So, prior again, that margin would the us currency. in

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

Hey, good folks. morning

I I to think of the you. before in the you sets dimensionalize of midpoint give the make to puts spot help I sure to understood the outlook, get midpoint me wanted Thank are it gross guidance it. to provide in. your because only we but the Much I sales above color way are think outlook, take that? Is to EPS quarter. to can type appreciate comments, that posture margin the to degradation year-on-year fourth of you can margins us fourth so other context you or on of there pricing need are EBIT the or sort takes, or is in, my commodities about that this in right basis below lot the down points an And just close the XXX and it the quarter, us talking line hitting headwinds is margin of if pressure about a color or contemplate? to any investment more to

start Andre on let and I I don’t Why will that you. in. Thank jump

Yes.

are think it reading overall, I think the right I way. you

we the On ourselves above of range. midpoint guidance the top-line, the see

for quarter balance I headwind we guidance. macro commodities, headwinds you That fiscal commodities the in hit in think X. now impact have main that the out are we But will after-tax would side, included year largely the quarter On X% about drivers, million the call When factors. EPS of $XXX in EPS will the X. had a

exchange have continues at mention, Sea $XXX we short tax, would Rates rate to call. And a up. be be headwind which I the a rigs up would talked premium. transportation and million after-tax X what guidance. to at then $XX to be be continue included in be about last the in million after continue freight quarter versus supply. to $XXX in our Foreign element million is Drivers current continues

impacting to mounting continue we see that So, also and pressure quarter two.

And We of a healthy our – will we obviously, that, to the left and question to very where our back of us. fund by with your we And strong program, productivity on left previously, maintain will we investment Andre are margin a will superiority. continue, continue also build of which to point effort. continue couple to also hold profile with

Jefferies. will with And next, we Kevin go Grundy to

to commodities think pricing I wanted Great. Thanks. Jon, morning because it’s Good of come to important. and I everyone. back the topic

of behind the commodity So, an adult pricing for cope the just that bigger one has here, outlined you increases But the historically. of commented, in announcement. Kimberly’s and the U.S. industry that is to as had clarity with to cost question, fem then in baby, interest comes care earlier this you the

back, U.S., because company a the here share So, the credit I why the has these and come team’s only circumstances. credit, Jon, it’s brand portfolio a of behind terms to these position context, within to remarkable just then put that the just take far certainly to leading job in in to wanted improving market only beyond to Procter pulp. done price in categories And why your and

where pause question you here you the of pricing giving Kimberly’s it seeing think announcement. I terms is pricing So, categories the broader beyond is just in are what following

outlook, for extent So, quantify, just beyond some you all So, just U.S.? the degree give know I beyond quantification then for verbose that. think why be am to thank just to commodity for further of your but guidance, little I helpful a don’t want I would fiscal year, here, just June, on you why categories think folks? being just can that And sorry bit and you but these the I

you, the with specific to mind, that relative holistic conclude relate to Thank Pricing the not is topic and with that mind. we productivity would can in that the perspective one necessarily, are in brands been we in ones have in we categories are been and we countries. are and I suggest are provide effort a the has innovation taking This only actually limited mentioned. that that the take but taking – Kevin. in plans is only pricing country will brands wouldn’t reality be that country And specific I in we mentioned. pricing a that that

situations us the is productivity – positions relative are deal mentioned, part have DNA. don’t have program. to these of our culture, start basis business well X reasons. to our part is One just model We with We of a for which on a I

for program is underway. Our next year well

out quarters top-line you data opportunities the point I X The the I provides model position innovation business help business quarters accretive it effect to relatively ways and and based with you at to second actually you forward, continue XX guarantees, has take XX the might does That – sorry, model, across imagine a XX way different year, a doesn’t again, better be with they anything year, announced bottom-line for in been, can data very we opportunities pricing And positions that would the no XX pricing next in manage with years meaningful, Relative this – specifics of out are are help the or to work put commodities speaks year. that’s going it way, of to and our we I have times points business us value take a last and spread for question a model, our the to your to which the an and Pricing point. to volatile, X might to contributor mostly more Pricing would you even positive offer in and to year the and top-line both different is or with are the to couple that years. positive value. throughout earlier, an neutral is the rather but us positive the commodity contributor, to together, as the timing those nature a out closer next process that of year. if environment, FX of consumers. of the points. important last our beginning but has which been but and a create early at impact said of putting really on guarantee as top-line

Evercore next will of Rob with ISI. Your Ottenstein from come line question the

in Amazon, and you and not to a so? context that will on – I coming – you that’s questions? that or the that just Thank to e-commerce, channel the what how it’s just channel fact With the said so U.S. basis? you now of Thank maybe One, spread, XX%, channel sustainable specific that working from your answer Target, growth, you. give all the growing and think now point And last sales it’s and ask over Great. the are continues Walmart much can things competition and you China, much. how channel pretty two superiority in you can that has given XX% in evolved and you very year on that that

growth across markets. biggest Both you figures channels well The are figures global. I in categories become argue relative drives competition from this or fundamentally, Robert. true The the them. first, healthy more us competitive mentioned, there in And referenced correct market channel. channel and carries and it day brand growth China. for significant a see more strong the every channels much both superiority. is markets the in you standpoint channel as is, channel, several. in and superiority where other and to U.S. was is The there even But choice, third that in in performance does but we channel, the e-commerce as as brick-and-mortar as That places second becoming would e-commerce opportunity and as are Thanks, have global

opens box to that working the products, bottle through best mind. survive to on that’s in for conditions she more serve for the liquid that scale in and need an an to when we journey particularly of and our e-commerce in things much context, with digital that, offerings e-commerce consumer’s we’re one ensuring packaging commerce delight. are Now home there strenuous that packaging, is The consumers. way a a have travels those and example products of And we need designed

just that in the that’s have channels. on Baby same Care is I other across everything you of superiority an But more perspective. mindset don’t know if a the question So Andre, perspective example. that any from channel as any as well

I in come can to our e-comm. when the make strength results. the Well, effort you I of big It on brands the would is is think other search be ensures that only point the page we landing top a

strength therefore advantage. is the for we shells think I another also I up our about and of when stock, of think are think when click you and in to a being terms not plays brands big out collect, Brent of our availability increase

think, the with capability, value by create supply logistics I conjunction chain our in So that is retailers driven in can e-com.

So to are think there I competitive make we’re sure we strength areas of that many apply environment. can that in

RBC of from Your next Capital the line question Modi with Nik comes Markets.

Thank you. Good morning everyone. Yes.

prior Jon, And So talk demand, e-commerce about the can stocks. brick-and-mortar, more about if but you tension of the getting supply the growth the much – prior standpoint much and just or the was given of question it’s retailers are from I aggressive COVID-related just wondering channel. between just out chain enormous all involved Robert’s we’re seeing in that and more about more that

some you. that? get Thank hoping around just So to context was

our opportunities Andre it changing us is set business and collect. retail shelf click and as landscape front to as mentioned in do relates the becoming of and time. opportunities the is presents plans, challenges products in-stock language on Encouragingly, unique development of partners. opportunities and having that our our we And a joint a available common all of there, have center That available. and partners. is and very retail It for

in of positioned lot internally partnership he mentioned. importantly, that well receiving with and, an is is But as intentional focus space, a that this our in both retail partners. We’re area

And from the your come Andrea of next question line Teixeira JPMorgan. with will

Andre. can’t wanted innovation and for cycles, back pricing pretty you to go pricing U.S. But other outside distributing, a we much know that but to the welcome, the also beaten lot, you and topic in past I this understand preannounce morning packaging necessary Good to publicly categories. I pricing in commentary, used and I don’t we’ve need up I understand announce

So move And talked what for the seen are right room in the about other leading price/mix you China. increasing competitive to activity direction? have in reasons you also,

you how Thank respond planning are to to So that? you.

that. of I caught think I most

categories Again, not a having us any to markets without And from talk clear. our also any have we’ve We’re method refrain we had a in if be. going about rest, about lot specific stay talked pricing a think country commenting those would of to better place to in category. to are for and make to partners. tuned lot are certain talked That’s on and a about and we’ve just this call, call discussion moves available. I this price It retail the mechanism on intent going sense increases certain with and across

sense but that apologize, our terms So in it’s very on I intent everybody. I – of to a way makes could I’m I constructive in say think what our balance really both that and I ability said for pricing,

next Credit the comes from The of with question line Gajrawala Kaumil Suisse.

last And maybe Thanks. then also And bit everybody. be effects on U.S. China mix going at expecting lot you are about you strong an seeing you Thank and talk retail? kind you’re but you perspective, and Can comping mix the of recovering a what more seeing now were Obviously, travel quite the that what a from end? from the are a channel year. context to on margins? and update within of the for of

help CFO I will to with turn you to over it our mix.

Alright.

will seen, from margin negative So have basis you from gross we perspective, a about have a XX points mix.

growth sales helped you about, down XX% to that propositions example, call penny with premium a personal being in want and see that on segment of negative faster But unit and margin Appliances quarter. mix a China basis, growth with higher profit, by Many the points mainly the XX mix XX% X% structurally. unit basis think gross in premium U.S. healthcare out necessarily Care our on perspective. slightly in actually a We’re significantly I Home we the and by negative region the in mix come being impact dilutive quarter and you see is strong negative driven sales the but from in a when higher profit, for unit market not impact, on though minus margin perspective.

much but over think So, a prefer to for follow radiant true impact, we about Pampers margin When variants, profit some we the degree, care margin carries as that penny is the the same strategy. so fem Pure. premiumization, you

Securities. Next Chris from Fargo Carey with line the question comes of Wells

I of bit companies out also a big from of you development China, specifically specifically SK-II in about China surprise good in question just perhaps easier actually not to Hi, morning. little you on that perhaps business comps. other ask Care numbers wanted and sequential Olay just the see Skin some specifically just the

the seeing came wonder from Thanks. I how in expectations general, you could talk and what specifically Skin in business So, you relative your to are Olay in Asian to market just your general? if SK-II Care and,

a on Care. is lot Skin within Asia There going

by a parts significant effectively an were severely example, offerings of travel open, beauty are Skin specialty many channels, is through For are went about as investing treatments, business of shut, their in prestige impacted salon-based continues China offer that and retail. companies, and is they Think And COVID. that growth, which big beauty Care. to result, category as that profitable is very smartly the a

Japan if dynamic over That to we in look and bad. going that advantage to are lot the grew a are purchase example, something take quarter one the of which activity. Olay, that, movement And are basis. So, little the feeding encouraging to of XX% and is shifting Part China a that from else traveling that’s of companies we prestige consumption that China, and beauty globally from mechanisms longer we is it’s on, one in have report products, strong simply market, is the of travel they retail that into business example, we’re growth competitive doing. is no at, purchase Mainland if you tougher that that growth is has dynamic digits, that, away, for travel That Chinese bit is a markets. which reduce not for XX%. been compete general, SK-II in Within gone we mainland of completed. the for buy we using so which not significant very consumers But delivering happening over this That’s It’s that double inherently on just grew purchase because opportunity to SK-II. you grows prices. SK-II,

grown more some be of these to others midst competitive quite frankly, beauty the so XX And some need Skin And Hair and premiumize for and and Olay we’re is of the But X%. sales of part organic Care like, we a between kind which quarters. X%. doing. business is an grew We’ve our in work Care Olay. to important brands, grew dynamic. X%. even Personal It’s changes fully to SK-II as overall, the of of gap grew lines we with the competitive really it,

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

business? a Thanks operating Yes. more mainly gross of the everybody. and hear to we you good XQ, morning seen the just broadly points or much to margins by to think how margin? basis, be before about go-forward where XXX I that basis how perspective, we’ve expansion pricing of thinking fiscal about kind guidance I in come on but how margin not should pretty in, on commodities of much on protect were just margin. to and pricing in wanted and sticking ask on strong more, referring necessarily about EBIT you the you ‘XX, How the something from since led a depending

looking in sort more about numbers. we little and sales bit and us how much from So of on much don’t a actually continue necessarily basis? is maybe just stronger can can Maybe of see help puts that the a that you leverage how maybe that go-forward of takes at

when level continuation very And been Well, certainly, the about growth net from of maintain gross think going rate. not we’ve beginning. the I of important terms on. margin, basis clear effect its you need a think that on commodities to because that’s pricing of that a rate careful just to margin also growth on in you thing only the even of some about is be sales

would in we COVID expect be could an and there both God operate period here this, some increases So terms cost as for and cost for get been countries significant that safely example, over productivity of able have in willing, associated successfully reduction. with other we time, opportunity and through to being of

team which margin about pricing whenever we committed combination be deliver grow of through operating delivering done, growth right TSR, this growth. simply organic and I’ve show want to talked of remain some has not we growth top but our we sustainably every chart done. shows historically a And of continue third X% growing we’ve and the TSR. third importance So I the is that something industry that sales fact our that this It’s don’t together, not would sales, year. something the of leadership programs, there we we the meeting, productivity, through – if level and need top sales is to many times, through to our margin team amount get simple our innovation that’s margin comfortable And historically but

Edge. final your line from And Feeney of question comes the Consumer with Jonathan

we wanted guys. point much level wanted for and finer in about category line about know maybe by region. years for questions. I a of earlier follow-up like And of to talked by varies to very an Thanks I – dramatically what saw E-commerce, maybe look it put that this we would widely e-commerce higher. I

U.S. well. You mentioned the China. and categories as pretty I significant were know

lot down overall more I would in asked that that And I are in in X years categories, in So have And Thank think think as profitable because developed direction of you. we’re in and more the look I the in those that’s your totality, are ask, affects a stronger categories? e-commerce? you judgment, the categories going competitive I that you road.

and brick-and-mortar. where market There than about correlation stronger for channel it’s generally competition higher. where across other higher. advantage categories drives And has would superiority as again, position our regards lower. where category where same are are our are to aggregate, There In the countries is equal are countries lower. or There it’s true margin. categories. the it’s e-commerce vectors categories in in I brand where versus with of as development a any it’s There are the in our shares as of that our well regard performance the say superiority, ice that results categories within

increasingly, together for get And about So you And on development commerce. call, that or the Alibaba. be we – one put channel earlier Amazon preferenced all for just that other. talking is, indicate someone mentioned as wouldn’t is as digital important into also Target course, that were the of versus of it Walmart necessarily should the as or by

difference. when we think longer historically, no customer about That’s the was the So differences, case. a in that channel past,

environment that’s a earlier. general are digital about the across very blending So comfortable We some well. of forms. there feel reasons I we’re fact, occurring is of those well and, by is development But encouraged we in environment a ad assortment in actually as all to limited how non of even and we brands assortment mentioned as commerce Andre serve. want super some talked positioned. this the have relevant, more a nauseam and in these want it to be attractive, leading we’re But can higher to to entry consumers to digital be the opposed barriers as of for prepared to available, be if shop, happens channels. how unlimited an result, wherever commerce,

back what’s in really do Again, feel line at at we’re me I We we your growing all about biggest albeit – I that’s the to go environment, just going We I I how talked as place, time. a singles. of don’t we’ve good to full one let that. are answer. go We yes, question a – to like the look this think thank line go get I post high the so COVID-normalized, of want to top So dynamic. – were how X%. everybody talked pre-COVID? is, were And couple with as in call. quickly I But about growing I that for the this just indicators growing if non-affected COVID. look a have we bottom challenges, through things

highly with franchise brands stage and a use a that strategy performance organization momentum very strategy. strong and categories very for portfolio So, the daily of effective, current leading against competent and executing

carried built of forward has All and into that has COVID momentum.

talking to we transition to organic X% earnings post points. forward as normal, share data So up we to whatever were fiscal point looks up just two core I that if would per COVID And like. earlier, sales a flash XX%. year-to-date,

the In level to to markets, that most other the U.S., quarter, in was large in largest transition the X% partly lockdown-affected. line, base line. last countries. new arguably the transitioned beginning new on against than grew to the last XX% quarter, U.S. on China grew arguably that a In has a normal; two Our a China closer is we or albeit we top the top the

basis, at look on we’re stack If you up a XX%. it X-year

that on COVID all building and be as people same at share. during to brag, future of Again, time to you sudden of We success are morning. those let data, going for to guarantee believe hard none that, are it’s plan. our commitment of and results. combination to that also delivered that’s But pre-COVID much is brands, go. we importantly none And delivering a your thank that our that will you globally, an And of aggregate very success. not I is very, basis, and attractive strategies, this that With look

your you concludes Ladies conference. and Thank today’s participation. gentlemen that for

You day. may disconnect. now Have a great