The Procter & Gamble Company (PG) 18 Oct 232024 Q1 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 Financial Andre Officer, call P&G's Chief Schulten. turn will the over

morning, Good everyone.

QX Joining the and be CEO, and will is the mid-year call QX John President, I'll Senior Vice and President me Relations. Moeller, This the Chairman, calls on year-end leading and Investor fiscal today Chevalier, year, calls. Jon join

Execution integrated July quarter drove across per results to us strong deliver put of strong aggregate These and productivity strong earnings ranges on September of fiscal regions, first superiority earnings brands growth growth. in strong the cash market towards and our and organic very return of year strong sales savings, core share while to strategy for and our our to guidance end shareowners. investment delivering in higher enabling share cash growth, quarter, the broad-based continued productivity categories growth increased track global organic sales results also

across and Personal singles. up Care high Personal Care, low-teens. Now and units rounded to modest contributed grew sales added Care to low X Home point. our first business Baby Grooming of Oral growth Hair outside sales. Greater were point Care, mid-singles. Care growth Health was X%. digits. volume growth Organic decline quarter XX Fabric broad-based and points up with single Care and grew line moving sales Volume product growing categories of digits. a was down Pricing overall grew Care Care, grew to X Care X mix numbers. with Skin Top China. double each Feminine organic Family each

Markets across X%. as grew down and in remains were China market SK-II sales Focus merchandising. with Focus down prior quarter. choppy X in was a consumer were And confidence Growth the year. conditions U.S. up soft and organic soft Greater reduction for temporary broad-based was X% were Underlying China retail weak. Greater social X market sales regions organic Markets growing in versus X% Europe also of due up to growth the XX%. is geographies low-teens sales. Organic

in Markets Europe U.S. Markets gains largest America India, some Enterprise volume grew offset with XX%. were XX% Markets, Latin to XX% quarter, market continue declines China, up driven Asia-Pacific returned Enterprise Focus and enterprise Europe by up European this Mexico, and largely volume to again Brazil the contraction. of in Markets. underlying volume growth and growth. and we in the X% our Greater volume primarily These Enterprise Shipment deliver solid up regions,

top holding XX share was XX our Global with year year aggregate points up XX versus versus prior or prior was up XX value with up In reflecting X basis up share. share of U.S., basis XX X category the growth. Value basis of points Markets European country past in X% growing combinations was the value share growing or share volume all-outlet in XX months. XX value U.S. categories quarter. volume was points share points, Focus the basis over holding

improvements points. versus points foreign Core basis operating investments, prior partially SG&A. marketing the as XX%. increased up to on expansion by XXX point offset help impacts were Core the operating margin gross share bottom increased basis currency-neutral and benefit Productivity increased increased wage to EPS XXX basis a margin inflation of quarter. were $X.XX, per Currency-neutral and exchange basis, points line. XXX Moving were On basis earnings XX% core year. margin a XXX

to line repurchase. was across line, the cash. $X.X approximately and $X.X be what bottom billion shareowners, billion and in in a year of productivity flow share continues challenging We operating to billion top $X.X start environment, cash a good and dividends very summary, to returned free fiscal Adjusted XX%. cash volatile against In

results Our past the a benefits years. and a to that team the X for of health that performance And portfolio and where providing continues operate in brand is growth foundation with products, strong has the balanced integrated role executing categories over cleaning, many value significant excellence, strategy creation, in daily-use hygiene enabled plays choice.

in price package, Ongoing of execution brand investment the commitment and superiority vectors each compete. product, and value communication, tier across to retail five we irresistible across

raising this We nature our the of on superiority dynamic are standards to bar again strategy. reflect

and and challenges, constructive Productivity technologies An in disruption, in especially create superiority environment improvement deliver our willingness trends that and currency for change, our new in. and strong margins investments in all cash to shape areas future, operations will the important a to expand industry offset generation. of we're volatile the fund of cost adapt approach

accountable. organization and agile an Finally, is empowered, that more

We environmental to sustainability the in Chain our with are or separate employee These strengthen not superiority, and investment They necessary equation. improve continue are enable to digital areas: X.X, acumen, execution the organization. creation elements and to build further cost integrated strategies. to reduce the four value Supply of value strategy continuing new focus and

grow on strategic reinforce grow share, profit. each markets, and which executed other. superiority, and constructive When choices build well, Our portfolio, organization productivity, sales in and disruption on they turn

this to commitment line path and growth propositions bottom continue by believe down to fueled forward superior starting productivity. the deliver strategy, deliver consumers to to on and retail to double best irresistibly partners, with sustainable integrated We top is that a

guidance. to Moving

commodities attempt geopolitical realities in provided Based guidance around we consumer mentioned, consistent after to dynamics. million input is to around volatile spot in 'XX. from the We I be currencies to fiscal we estimate This As expect July. on these a $XXX our us tax to reflect will challenging and continue environment to the prices, be we and tailwind costs with outlook current ranges. of in

been estimate, incremental costs offset been have fuel. commodities, commodities have which However, in some there higher this by We've pulp, moving seen other several on within parts. such as relief like

us. against billion sharply moved $X a guidance million headwind have we year. expect the impact initial approximately now tax, our of rates And since for after incremental $XXX an exchange Foreign

higher impacts, net are we tax. inflation wages expense also we facing benefits. And these to higher and after interest million addition In $XXX of year-on-year approximately expect in

As our are to organic each with just on after guidance ranges to X are strong track growth, we very we shareowners return year, core maintaining productivity for fiscal cash quarter quarter. EPS sales, first the cash and solidly a

wave fiscal is organic return 'XX calendar as rates year. growth. as and X% for cost pricing recovery for that year sales normalization range is to occur Guidance last to market market laps underlying The market through growth in X% the a includes volumes likely to the of growth of the

first For results. pricing P&G, quarters each of benefit to the X we X expect X to points our next compared less quarter in

the On earnings We're despite holding core million core translates the $XXX line, FX, a after-tax incremental to this impact XX% basis. XX% year. currency now to outlook range is constant fiscal our per share to X% from for fiscal EPS With last outlook from foreign point bottom on the X% X exchange. headwind EPS versus 'XX growth a growth

productivity cash adjusted We of continue to XX%. flow free forecast

$XX of Combined, pay billion to we in to than $X to billion year. to dividends billion stock. to cash this $XX repurchase billion We common shareowners $X plan in billion expect to fiscal return and $X more

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

Labor annualize as to we be As keep will chain our less to versus progressively maintain will year the through momentum. cadence pricing of year. year, year, a We the also the as we'll and see continues that reinvesting the move further FX earnings quarter you cost. strengthen the start we half benefit consider benefit increases. see throughout increase Also, and our should back prior X. the commodity strong for with inflation mind in of less plans supply the to year in strong headwinds

Finally, on economic reduced, we'll the growth, winter. are costs regions. balance longer costs watching of we have the and be head impact consumer energy have confidence. higher saving closely Energy as interest levels the fall rates an especially market into in Household higher rising of for and Europe. Slower China and health

continue, we delivers. strategy and and it results to expect confident conclude, that remain in volatile the consumer our To macro dynamics while we

are for our creation on in focused categories. growth are balanced value our driving delivering to top and we committed And We shareowners. line growth bottom and

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

Bank. Your Instructions] Deutsche [Operator first question from Powers Steve of comes

and differs your the talk balancing I at guess, more up curious maybe price the year. progression of to just focus more versus picking of as particularly about I'm bit the over growth about Markets, versus comments little balance the organic a markets, currency U.S. And various the the headwinds. the you're whether on those where remainder over between how mix thinking of the could all drivers experiencing you're you of your volume on year, approach Enterprise to then your

As occur of said growth to be We of impact. the That expect X%. will X% is volume in to have market line market. to always, stronger as more over expect to ahead That the of the few more prepared remarks, contribution on the sustainable to at rate, around we lower, historical return the with will a growth we in a pricing would maybe X and P&G next that And X% quarters. intending mix point around -- grow side. X%

terms is to of ahead of and be slightly terms expectation price. ahead market our year So of volume really, the in for in slightly the

with We create gained past working. of that price pricing confidence for continue we And strong drive to value superiority innovation our the over we and innovation. even have X consumer believe to is years more can with the strategy that

And expect pricing so component been growth XX of pattern. core continue. for expect last has to our that to years, the And out that XX so return again, we we a of fully to

the X. will to lap I pricing think start in quarter Specifically,

X you offset expect to to the And contribution growth balance in of X overall expected. the So we expect for sequentially market lower quarter then see to the year. And pick probably part and do was of rate up a -- points that will volumes price by but drop that X.

lira. think part We've the example, foreign we've very major Markets foreign is able world. To Turkish across markets, the of would And price exchange. of a Enterprise focus I significant continue to where price the your differential Turkey the been second exchange. we'll for successfully only be for question, that the devaluation to versus done

We'll business able that, focus are to in grow and and drive model share, do grow and of model. superiority, drive sales, the grow we're we'll markets continue share. profit. grow to sales, that profit markets, we innovate, grow continue But Outside price, driving thereby same

Mohsenian Dara of from Morgan Stanley. comes question Next

competitors? environment? So product and And geography any of follow category. just in the your you're behavior as you turned characterize type commodities competitively you favorable pricing retailer what in Obviously, different around it year-over-year? But of terms to have what by pushback thoughts be can seeing on seeing up that, are will from general,

in And growth. we just to sounds then terms growth, should expect it volume of like return volume a

of comfort what is pricing Just and visibility that drops in have level as you ultimately volume around how your growth much returning you to off? think

When consistent you look with previous it's market, total periods. the very at

growth the X%. around average significant of driver. Greater the are flat, at, X% being component level, You market X you exception China. only see at depending to geography a global see price being you a to still on stabilizing the look still And minus point Volumes

component price the consistent is period-over-period. the and price So rollover

standpoint, there it. see So least at we competitive a that no differentiation from not

deal XX%. to is decreasing. [ and about U.S., indicator we actually continue pre-COVID continues XX versus levels In the and Promotion levels. to for sequentially on In -- Europe, see levels promotions COVID. be other still indexed down ] below pre promotion volumes example, also now Overall at be sold still promotion

market looks few different past the a like is still it's dynamic activity over Now actually quarters, obviously It but decreasing. aggregate up. by promotion only

that And makes sense.

foreign If at $X commodity recall, years, million small $X relatively about we're help see And the or combined which about you coming impact of after-tax help little exchange. an costs, billion we offset have to by from of $XXX X look headwinds. billion of

think pricing the makes sense. everybody current dynamic is I so still recovering, So

model superiority overall. consumers while experienced for their therefore normal and discussions on pushback again, and for not our driving to seems to sales retailer value price resonating. innovation retailers shoppers and of and shoppers We and have how And we for create be beyond value maximize

On expected. improvement seeing sequential growth we're excluding that's good very we where flowing the points, are volume basis of already context prior X% Again, again, XX in we of versus the trajectory pricing into in quarters, -- growth. about we still the side, have volume volume would which market. in China, feel of the the And

We are expect to strong, continue and U.S., said, as India America strong. volumes will grow. Latin Europe, strong, we

trajectory. So to progressing on we that us see continue

from comes question Rob next Ottenstein of The Evercore ISI.

And business I companies be Chinese and of bit. they thought hearing perhaps not term, longer market may your how drill of and the as again, you profitable attractive the long little years are short improvement the the we in China of China is there? there we on bit turn in visibility kind the the a both a so do or get in want as changing term may kind nature talk China progressing? on or that thoughts perhaps to that is Any of And positive? may the ago other one, in a little number to that term. from Number love and some of strategically, to have short think when term competition

Rob. Thanks,

The or out. we linear. business driven by now. along in said I we all China market China all quick, that's really dynamics think is that health think to don't recovery playing the And extensive expect I right be

to market Value X% past continues down And X% over few been around that's quarters, has market the So X%. be over down. and the I'm down It total describing. past few the volume is between quarters.

operating we're reopening. within is market still a that contracting So post-COVID

to China believe for that to an place XX for years. We've us been said, there be business. continues do we That do attractive

R&D We The is retail consumer is capability. generally capability commercial the demanding strength. a our Chinese a strong very demanding consumer. plays that ground, have organization on Chinese supply retail capability, chain The And environment. to a and environment

here expect over China, can to periods. we the value-creating we growth to believe and a coming return a, mid-single-digit So role that, the market Chinese play we in

If you consumers, That we grow the XXX estimate, years. just in we about million, China million over of north will consumer look middle-income next structures, have X today. at probably XXX the

continue value we our of for believe years. And invested. attractive a significant in is few next there And that over can believe create China business the remain class that to So we'll therefore, businesses. consumers are our we

question comes The of Barclays. Lieberman next Lauren from

to You've Focus in up pickup private see. which held market Europe. Markets, European share mentioned have great is a obviously, to started return in generally some we But to volume shares growth label And well. across trends see

You mentioned being under European consumer pressure. the

volume more of Europe of broad there results, you're the look, So curious, thoughts go-forward on transpired more some maybe in seeing real trends market the shares that kind trends? versus kind more share on just reported already time on what's and European

your and because relevant. Western which organic let here is XX% think me Look, of Focus in I on we've combination you. price/mix. X% the Look, -- Thank European sales focus growth seen the is a European Europe volume side where that's strong question growth Markets, incredibly strong,

XX of We signs. that encouraging. are to returning very The is growth across the is growth. have points positive market generally And which basis share same volume geographies,

we that us the still relevant are channels clip continue across label to compete. fact cash think growth share They XX and shares private are by allows I tiers, enabled different portfolio that to about share Yes, in to is grow present growing. that point effectively different that basis in Europe, strong at The an month-over-month. But enables across Europe us brand a outlays. geographies. in across And grow all same

creation, private Even branded in be as our versus still favor. label the consumers the seems balance look at value to

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

also, the year to risks about reinvestment. the so know you one you've in guess, range, end about been related lot look just so talked I like at and talked One higher even a better of And questions. first maybe -- bit have then about question, I we some I of if that. talked commentary you've guidance two your just the connected far But is market. what's quarter a this is that

the of are where kind of just So reinvestment maybe that dollars of sizing those and can give if some going. us sense you

volume along. look first combination been said to Again, China, at the to If side. outside encouraging we upper China, and to of and has results return as will quarter, us. outside to growth that to giving encouraging able both point the confidence model And to here really -- of even all that certainly But choppy -- expect that the end down, -- ranges. of you are China on the drive is continue value the factors we've us across breadth of I China with and grow the think we the guidance growth, been and encouraged we volume us be of depth consumption by the that volume

of On the It attractive It attractive. to will continue create be when opportunities an side, that availability investment of driven the we be to by for return return. by driven is reinvestment look to will invest funds. won't ability

drive to you in priority, current can that market as Our invest in imagine, growth. is this ideas environment first

innovation So penetration, that investing for the key. to investing be investing consumer that to is communication better new driving in in done, right jobs drive in investing spending that usage delight media drives will to the is way in driving in products, consumer household the be

value couple sleepy to We A category fair bedwetting can where great of was examples. years retailers are of the we Those growing shareholders. business, growth category. XX% We is Ninjamas is entered of for able which our a drive Xx The share. growth, ago. that create to examples for for were continue a X%. our drive and invest, drive couple in

to continue in opportunities media. We see

and As better. across our and media of world we targeting sharper gets our around the scale, capabilities get on the sharper ROI

we'll drive continue So to reach. up

us, into continue household a loyalty to drive is core drive turn drive repeat. which to and frequency. penetration, We trial, that driver up And for will again,

supply you will I resilience The in last is investing give bucket and productivity.

core retail as for advantage for our resilience, we a supply competitive chain partners ourselves. and Our see

has And be. us investing to is investment we'll is we capacity model. high of it in ratio the business the our productivity, to to which that superiority, ensure continue demand part where for and believe, in to payout we continue a want So critical is

are the do So return reassured, on But priority. headlines. very top disciplined a basis as investment with those the we'll it on be

of The JPMorgan. next question Teixeira comes from Andrea

Andre, a would volume, your little like drill bit. to I down comments about

You the mentioned market. low-teens. China. a mid-single-digit the you looking growth. in understand choppiness to down had I And believe And obviously, you the are of I still SK-II

the to then as sequential you the X% mentioned assuming for right, year. to comps math that total we decline easier the the of mentioned X% I'm expecting -- said So in you're through or X% decompose to to doing pricing, X% you balance go pricing, you SK-II of lap And as the your for organic we right? when happen, improve company, like gradually guidance, expect when benefit

was it so implying you be towards X next quarters. X% X%, So a the would good in X% to

So at being or of it implies said, inflection. in X with the sort least quarters, of improvement that in next sort some right, volume, some

So out we it I figure to about to, Is thinking? total was trying said of that said improvement that regresses China? you context basically should company, in to what the about and what what what it be you in an China regresses

of the of growth. So first obviously your obviously high part sales volume-to-organic sales. the volume relatively Because to SK-II question, see ratio SK-II want return But to is we is unit limited. very impact

mid-single-digit down, and So the to When continue delivered for China, first is as organic operate China counting happen that's really in the not would we predict. coming have I say, return growth catalyst think growth X% to to China recovery quarters. going we'll with growth. on And to believe, like core exactly quarter sales will we the I to hard

you're right. on question volume, sequential your On

tell is minus quarters. seeing over you organic to X right contribution minus to X said, here. The -- coming to the And I in volume trajectory is I we pointing from will to now But that I'll X to a to of questionable. we that flat won't And expect progression, pricing flat minus think, prediction we're As progress direction. X progress X sales sequentially. to points the growth exact that the decrease make

see we invest in right we're volume continue drive So we and business. will that the create our on wholesale to path. And to penetration growth

Olivia comes question Tong Raymond of next James. The from

economy? to in discuss that you absorb macros changes or able in to and your ability the Can how FX the the and so light either switch versus embedded risk -- you is if talk of year operating sales conditions. been to outlook potentially in outlook. about that. could consumer, about volumes increasing in your lower that talked in then general, also you've Obviously, net trade-downs, into you what's fiscal around terms your agility concerns and volatile between the Andre, And of spending

Thanks, resilient. the continues remarkably Look, Yes. be to Olivia. consumer

As U.S., the stable. levels consumption we the said actually in are

share well. and the value And nondiscretionary, exactly interpret are volume I our Our and think, portfolio that do. portfolio a us extremely is world. doing our the it's serving true of in supposed And are in building categories in that And superiority job Europe I that to as that's share grounded parts is growing. that daily-use in most

every the us serve not change. We're are to we their the able tier, to in in consumer. tier the the but which might in add value, tiers that to the bring value and value premium across mid-tier as allows preferences world, just And doing even spending in consumer

haven't to in choosing significant seen continue a products If P&G change we their within our portfolio. Now that anything, up consumers yet. trade preference are

ability you our shares we markets in see can when see grow label expand. But private even to

here we well The the And of the a for fall to innovation that more in winter significant in we value pinch set continues if don't intervention supports change strength to media and our communicate the in can main feels us brands season. are continue invest that going grow profile. And and be the even to into or believe bit to so a investing a provide. up consumer we expect

don't price need promotion. to see We a significant drive

if look is drive focus, for support Our if we really we regimen. in-store to promote,

support the we're traffic the our goal strong going in-store after. really innovation that's get care hair for and a strategic When for consumption. and support. trial product drive drives want tool is it incremental it, enough us. retail we're habit generates for retailers growth And Because our after. enough So steps and regime, either added we It itself drives in i.e., that's consumption, that or regime or In what formation, to to to the view regimen many cases, to laundry example. as so the partners of

The from next of Wells Carey question Fargo comes Chris Securities.

be on if growth ahead. wondering could been two and seemingly expand which important have was should important categories, I you for volume

Just first the and reacceleration improvement, seen you what's Can just we've on durability? laundry, on trends. driving expand that an in a

also in Can expand in those believe the that And Health on just that quarter. if exactly we sustainable volume I'm of driver then So to are persist. quarter of Personal get you saw the that go-forward, go-forward? to second, you what volatility sense was was of growth an durability I trying the quarter likely trends Care, volume just in a context important in the and of potentially think of some China some specifically driving out in the

The very encouraging. very Results Thanks, world around the Yes. laundry strong. are Chris. business is

because the are on focus the and look you have you it's market very encouraging. biggest But -- to. me the at if the Let visibility highest they U.S. trends, market that's

has are share been We X.X Volume over and flat up share in growing the Care. points. value X volume now past U.S. Value has been months. Fabric share

the push business to forward. continue we So laundry

record-high record-high have shares. have U.S. laundry in consumption the And We fabric we enhancer

importantly, we're Most and strong I doubling of in-store strong category fabric And think, it's innovation, that the growth down And laundry. we're the and fact of the consumer-relevant really on driving enhancers. driving XX% XXX% communication driven growth by in superiority in category support. is

yes, it only the to with fully believe will sustainable I your And it's line just So accelerate. in question, is business because this that model.

seasonality key plays the here doing a well world. And role. is PHC extremely the obviously, around

the Personal And sustainable. both part strong is last absolutely see. and continue about strength season, you the yes, you part But the the in that forward. to good strengthening and supply be significantly results, in Health which which Care, growth of in volumes see we into with needed going Going I'll our invested support strong businesses, we've invest is capability that is think feel I will trajectory to leave

Falorni comes The Citi. next from question of Filippo

Just the quarter, on increase. a big strong, terms in of margin, in gross performance inflection the year-over-year clearly very question the

how thinking like have give you visibility sense you us out, you're play the at the seem Can a in the half, commodity second comes pretty of pricing down? half least especially first front. on as You good contribution will

we And earnings, about gross contribution the talked gross X. were some in we expansion important we expect that X. certainly over margin. of it's ease margin of price quarter high will the to from understand drivers we when I said, Yes, quarter the cadence quarters. benefiting of price in the think We coming And a as contribution saw normalization

of part X. million XX% the biggest about quarter help, materialized the of commodity in $XXX after-tax has help commodity The

a quarters. that's margin headwinds the the year. the exchange foreign gross rate coming the So will positive to to over relative of And balance accelerate

On and continue strong to the we other will hand, productivity. accelerate drive

the We But have we And want element year. every headwinds productivity, going into and innovation. continue P&L quarter will and balance in across strong. drive to But the that drive away of we the margin the continue take but you other trade-up gross very to the margin of only not gross sheet. to balance I in expansion is X

next question from comes UBS. of Grom The Peter

to ask America, you may this. in Latin maybe wanted to XX% volume unpack So strong. the I already And of But just on are have a seeing the return alluded you function what in growth category broader terms region? specifically through growth to very And how quarter, you growth can the versus just performance thinking you're in seeing share much in then this quarter, of performance is gains? a the of

we've Latin to saw on team offset innovation price out and double rate, the choice down the to the well. America, is on I need And to the fire Latin because for foreign the foreign clearly maybe down superiority. it played exchange double chosen think for in impacts is opposite has commodity made and exchange on business inflation to And When innovation we and that the to price and America on commodities. fire. Look, market

our And growth are in share We categories. seeing Latin seeing we in America. growth are

growth the example. the biggest volume side in is Mexico, on value The in the on markets, for and side Brazil, both

that very point of have given inflation, difficult to it's some ability price. is headwind progress make to in of biggest to in the at where this Argentina, terms we think I constraints acknowledge time, the level

again, And And that the paint I of about superiority Argentina, of outside brands. grounded picture construction. our of only sustainability strong positive growth it's a very feel So model. very the Latin of I can in the America

Astrachan question next of Mark from The comes Stifel.

Two the everybody sort obviously more product and middle follow-ups. quickly that of the sort One, about for middle given maybe they I premiumizes is purchases? think in on middle go one-off. changes of terms China, consume or your about view market? class your in premium-priced SK-II change class, quickly think the portfolio more. Does aware that Obviously, commentary positioning But positioning ultimately sort of changes unrelated class they'll you there how there's But thinks just products? any just about a that is any Procter growing its in a how of how can that potentially

the then how do year? margin of reinvestment? decision investment reinvestment incremental it about or margin, gross tree, marketing versus margin margin? move And moderates, would Or on if with we Would from with move the gross an think expansion, marketing gross through the standpoint sort SG&A kind margin should say, I less gross gross of that less meaning spend inversely

the any don't Yes. I more insights really China timing. recovery have on Look,

directly the confidence, therefore recovery timing. see in with consumer correlate market. and will volatility the You That income levels

longer for we're be faster, we're my would here. hoping prepared think answer I for but

I side, ROI-driven, we're really spending ROI-driven. margin the I when we're On gross marketing mean versus say

continue levels. If that So incentive that direct I investment there's to think between we correlation to in of us increases availability there's quarter X, the strong of to continue level see response deliver for and spend, a funds investment. no marketing strong we

and innovation continue I again overall growth strong And That's a margin in to that grow our expansion markets. availability why enable innovations. also we of to That's spinning. contribution reinvest to very to us it cycle be and to our that of strong model. combination driving keep will those drive drive of superiority, have part support to strong expect business the productivity gross has

question from Redburn next The Lewis comes of Edward Atlantic.

Another strong the both quarter growth. volume in and seeing U.S., value

range the rate that looking we are sustainable over in were were we dealing lot Just all at where with term? the comfortable about the growing the In still you on about light growth a seeing headwinds, in gone X% of back are as of the consumer, few XXXX, and X% talking to the moment past U.S. in you longer years of obviously U.S. with with where at that's a COVID

guidance won't I on Look, a basis. market-by-market you give

proving We're I will to drive U.S. we're very successful. is in being growth, are ahead that somebody market business while growth growth feel business drive doubling from If continue for we're I the the the dimension in of down the that of -- model what execution. sales that down to else. If doubling about which again, market prospects think create in believe successful we because of of it every very U.S. is I the is taking instead model will, strongly of in that is sustainable out continuing market driving dimension superiority. every And us business we successful,

is U.S. capability growth the in trajectory and confidence market overall my So very high.

no time. are at There further this questions

quarter today. joining very and you. much you Again, look very we'll speaking Thank Okay. forward us in strong for year, first the with to

any and available questions, will all I you have be If John day.

Thank please feel or call much. So free to very you e-mail.

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