The paragraph discusses a recorded event by Procter & Gamble involving forward-looking statements, non-GAAP financial measures, and references to regulatory documents. The CFO, Andre Schulten, provides an overview of the company's third-quarter results, highlighting the impact of consumer and retail volatility, especially in the US and Europe. Procter & Gamble's strategy focuses on maintaining brand health, innovation, and demand creation amid this volatility. Organic sales grew by 1% for the quarter, with stable volume and mix compared to the previous year, and pricing contributing to this growth. Most of the company's product categories maintained or increased organic sales. The call will conclude with guidance for fiscal 2025 and a Q&A session.

In the paragraph, personal health care saw high single-digit growth, while skin and personal care grew mid-single digits. Categories such as fabric, oral, feminine, grooming, and hair care grew low single digits, whereas family, baby, and home care were down low single digits. Organic sales growth occurred in focus markets (1%) and enterprise markets (2%), with North America growing 1%. Despite challenges like lower consumer demand and trade inventory reductions, shipment levels aligned with consumer offtake, and market share remained stable. In Europe, organic sales increased by 1%, though France faced significant declines due to past growth and the Egalim Free Law. China saw a 2% decline in organic sales, with some growth in SK-II due to strong consumer response. Latin America led enterprise market growth at 6%, while European enterprise markets saw low single-digit growth, and the Asia Middle East Africa region declined slightly. Increased tensions in the Middle East also impacted market conditions and US brands.

The paragraph discusses financial results and strategic actions of The Procter & Gamble Company for the third quarter. Despite a modest decline in global value share, earnings per share increased by 1% on a currency-neutral basis, with a 3% increase in core EPS. Core operating margin improved, and there were significant productivity gains. The company returned $3.8 billion to shareholders, including dividends and share repurchases, and announced a 5% dividend increase, marking the 69th consecutive annual increase. A technical issue interrupted the call, but Andre Schulten continued, emphasizing the importance of investing in and executing the company's integrated growth strategy.

The paragraph outlines a strategy focused on delivering superiority across the company's portfolio to drive category growth, provide value, and create shareholder returns. This involves managing their portfolio across markets and enhancing productivity to fund investments, address cost challenges, and expand margins. The company aims to disrupt itself and the industry by fostering innovation, adapting to changes, and strengthening its competitive edge. Empowering agile organizations is key to value creation for consumers, customers, and shareholders. The strategy integrates portfolio management, product superiority, productivity, disruption, and organizational agility to ensure long-term growth, especially during challenging times. It emphasizes the importance of innovation, highlighted by the recent launch of Crest 3D White Deep Stain Remover, which has boosted market share in the US.

The paragraph highlights recent and upcoming product innovations across various consumer goods brands. Oral-B introduced new power toothbrush models, including the iO10 and iO2, leading to increased market share. Fabric care innovations include Tide OxyBoost Power Pods, Gain Odor Defense detergent, and Tide Evo, which is environmentally friendly and performing well in test markets. Innovations are also seen in grooming, with upgrades to Gillette Labs and Venus razors, and improvements in Tampax and Always feminine care products. Pampers is set to roll out updates across its portfolio, while new developments are coming for homecare products like Febreze and Dawn. The company maintained its innovation strategy even during the early stages of COVID-19.

The Procter & Gamble Company expects a challenging and volatile environment due to various factors such as input costs, currencies, consumer behavior, competitor actions, retailer dynamics, geopolitical issues, and tariffs. Despite these challenges, the company plans to continue innovating and investing in its portfolio to drive consumer interest and market growth. The company aims to maintain productivity, make strategic cost decisions, and focus on long-term growth rather than short-term gains. For fiscal year 2025, P&G anticipates organic sales growth of around 2% and core EPS growth between 2% and 4%, projecting core EPS between $6.72 and $6.82 per share. They expect to grow their brands modestly ahead of underlying market growth.

The company forecasts a fourth-quarter earnings range of $1.37 to $1.47 per share, with a $200 million commodity cost headwind, equating to $0.08 per share for fiscal 2025. There is a slight easing in foreign exchange rates. Non-operating income benefits are expected to be lower, and other below-the-line items will contribute around a $0.04 headwind to core EPS. The company maintains a 90% adjusted free cash flow productivity target and plans to distribute $16 to $17 billion to shareholders through dividends and stock repurchases. A $100 to $160 million BT tariff impact equivalent to $0.03 to $0.05 per share is expected for the fourth quarter, primarily affecting raw materials and finished products sourced from China, with the largest US export impact on goods shipped to Canada.

The paragraph describes The Procter & Gamble Company's strategy to address potential market challenges. They are focusing on flexibility in sourcing, productivity improvements, and potential pricing adjustments in certain categories and markets, based on current estimates of market growth, commodity prices, and foreign exchange rates. The company does not anticipate significant disruptions like currency weakness or geopolitical issues within their guidance range. Despite challenging conditions, they are pleased with their results and remain committed to executing their strategic plan, which emphasizes innovation and investment to drive growth and balance profitability and value creation. Following this, Lauren Lieberman from Barclays questions Andre Schulten on the retail inventory destocking and slowdown in consumer demand in the US and Europe, asking about Procter & Gamble’s plans to support revenue growth and market share in light of these challenges.

The paragraph discusses consumer behavior and economic conditions affecting consumption levels in the US and Europe. Despite stable consumption data from mid-January, the consumer faces challenges such as market volatility, economic uncertainty, and fluctuating mortgage rates, leading to a pause in spending. This pause results in decreased retail traffic and shifts in purchasing channels, such as increased online and big box retailer shopping. As a result, consumption growth in both regions has slowed from about 3% to 1% over recent months. The Procter & Gamble Company is maintaining or growing market share, with European volume share increasing while private label shares decline in both regions.

The paragraph discusses a company's strategic focus during uncertain times, emphasizing the importance of brand superiority in delivering value to consumers. The company plans to enhance innovation and productivity while maintaining agility to stay close to consumers and markets. It highlights the long-term commitment to investing in the business, despite short-term volatility, balancing top and bottom-line growth over two to three years. Bryan Spillane from Bank of America asks about forecasting for 2026, specifically regarding category growth rates and strategies for managing costs and demand in the future.

In the paragraph, Andre Schulten discusses the factors affecting global growth, noting a decline in growth from 3.5% to 2.5%, primarily due to reduced consumption in the US and Europe. They anticipate a return to a 3% to 4% growth rate over the mid-term but face uncertainty due to market volatility. The company focuses on ensuring sufficient investment to maintain and extend its market superiority, addressing potential tariff impacts valued at $1 to $1.5 billion. To counter these impacts, they aim to enhance productivity and invest in innovation and pricing strategies over the next two to three years.

The paragraph discusses how the company plans to navigate short and mid-term uncertainties, such as tariffs and sourcing challenges, by leveraging productivity, innovation, and pricing strategies. The company highlights its proximity to consumers as an advantage and aims to achieve growth rates returning to normal over the next two to three years. Steve Powers from Deutsche Bank asks Andre Schulten about the company's level of investment in innovation and demand-building, specifically if new guidance affects these investments. Schulten responds that investment levels are adjusted across various factors such as regions and brands, as plans vary annually.

The paragraph discusses the fiscal year-to-date investment in media and advertising for a company, which has remained consistent as a percentage of sales. The company plans to focus investments on its strong innovation pipeline for the remainder of the year, emphasizing the importance of media and advertising to support this innovation. Trade promotion will still play a role in driving product trials, but the aim is to maintain visibility without heavy discounting. The market response in Europe and the U.S. has been stable regarding promotion depth and frequency. The paragraph ends with a question from Dara Mohsenian of Morgan Stanley about the company's approach to innovation in a challenging market and its market share performance amid potential consumer trade-down. Andre Schulten responds without providing specifics in the excerpt.

The paragraph discusses the company's strategic positioning to cater to consumers amid shifting value perceptions. It highlights a diverse brand portfolio with various price points and pack sizes, ensuring offerings are tailored to all value tiers globally. The company's innovation spans across all product levels, enhancing relevance and competitiveness. Despite economic volatility, the company has maintained or grown market share, with private label competitors declining. It emphasizes adaptability in changing consumer environments, including shifts towards online, big box, and discount channels. Overall, the company is well-equipped to serve diverse consumer needs across various market segments.

The paragraph discusses the company’s observation regarding brand sentiment towards American brands globally. While there have been concerns about anti-American sentiment in markets like the Middle East, the data shows no significant impact on consumption behavior attributable to nationalist consumer tendencies in other regions. The brands have had a long-standing presence in many markets, such as Europe, China, and Canada, where consumers perceive them as local rather than foreign. Despite some noise in social media and trade activation, particularly in Canada, the company's consumption numbers have generally remained steady, without any notable decline linked to anti-American sentiment.

The paragraph discusses the growth and performance of various brands and markets for a company. In China, SK-II achieved 11% growth due to innovations in its super-premium tier, and Olay returned to growth with a 2% increase, driven by a focus on anti-aging products. The baby care business is also performing well. In Europe, particularly in France, the Egalim promotion law affected market results, causing a temporary increase in sales. When adjusted for this, European markets grew by 5% in the quarter. The company's strategy focuses on providing superior brand value to consumers and retail partners. Additionally, the paragraph briefly notes that the company is not yet providing fiscal 2026 guidance but aims to return to category growth rates over the next two to three years.

In the paragraph, Chris inquires about the company's future growth prospects and strategic focus, particularly concerning category growth rates up to fiscal 2026. He highlights a slower growth trend in North America and Europe, questioning if the company plans to adjust its strategy accordingly. Andre Schulten responds by emphasizing the company's aim to achieve balanced growth over a two to three-year period, acknowledging the inherent unpredictability of category growth due to consumer volatility. He explains that this uncertainty necessitates wider planning expectations and underlines the importance of capturing opportunities identified during the investor day, given current market conditions.

The paragraph discusses the $5 billion growth opportunity in the US by increasing household penetration of major brands like Tide, Cascade, and Bounty, which currently have less than 40% penetration. The plan includes segmenting the consumer base, targeting them effectively, driving trials, repeating purchases, and doubling down on innovation. There is an emphasis on fabric enhancers, with low household and load penetration, and converting manual to electric toothbrush users in oral care. The company is committed to investing and collaborating with retailers, seeing similar growth potential in Europe. The operator then introduces a question from Peter Grom of UBS, who asks for insights on international market growth, particularly focusing on Europe and Latin America, and their category growth versus market share performance.

Andre Schulten expressed satisfaction with the Latin American results, highlighting 6% organic sales growth in the region, led by 8% growth in Brazil and 6% in Mexico. Despite volatility, he noted strong category growth and innovation in these markets. In China, the market remains flat to down, but there are signs of gradual improvement, with quarter-on-quarter losses narrowing. However, Schulten cautioned that China's recovery will be slow and volatile. In the rest of the world, growth rates have decreased slightly, but there is an expectation for a return to 3% to 4% growth. In response to a question from Bonnie Herzog of Goldman Sachs, the company maintains its guidance, indicating an expected acceleration in growth in Q4 compared to Q3.

The paragraph discusses the uncertainty in consumer behavior and market growth assumptions going into Q4. Andre Schulten explains that they have planned for a wide range of outcomes in Q4 due to variability in market growth, ranging from 0.5% to 4.5%. He acknowledges that inventory issues, which affected Q3, have stabilized, with consumption aligning with shipments. However, the lost inventory is not expected to recover, as consumers have shifted to more inventory-efficient channels. Andre highlights that this wide guidance reflects potential outcomes and contains risk protection. The conversation then shifts to Mark Astrachan of Stifel, who asks about consumer purchasing behavior, specifically noting moves towards club and mass channels, suggesting this is not a new trend.

In the article excerpt, Andre Schulten discusses a shift in consumer behavior, where more customers are moving towards large retailers like Walmart, Costco, and club channels, rather than drug stores. This trend has been ongoing for several quarters and maybe slightly accelerated in the recent quarter. Schulten highlights that their brand is equipped to handle this shift with appropriate sizes and price points, receiving broad support across the retail landscape. This trend is contributing to an overall inventory reduction in the third quarter, as these channels generally operate with more inventory efficiency. Consequently, there is no concern about a fundamental shift, emphasizing the importance of adapting to wherever consumers prefer to shop.

In the paragraph, Andrea Teixeira and Andre Schulten discuss the financial impact of tariffs, estimated between $1 billion and $1.5 billion, which translates to around 3% of annual costs. This cost arises from tariffs on goods, particularly those sourced from China and exports to Canada. Andrea suggests that mitigating these costs through productivity improvements and price adjustments should be manageable. Andre confirms the estimated impact, noting it varies significantly depending on specific product categories and markets. He explains that while the global average impact aligns with Andrea’s estimates, local variations require targeted strategies for mitigation, which teams are actively working on.

The paragraph discusses a company's strategy to manage various operational elements such as productivity, sourcing, formulation changes, pricing, and innovation on a global scale. Decisions need to be tailored at the SKU, category, brand, and market level to influence consumer perception. They are in the process of making these decisions across their portfolio. Following this, Olivia Tong from Raymond James inquires about the company's pricing plans to mitigate the pre-tax tariff impact of $1 billion to $1.5 billion, particularly in categories like tissue towels that face significant competition. Andre Schulten responds, explaining that the Q4 impact of $100 to $160 million is for just one month, implying a larger impact throughout the year.

The paragraph discusses the impact of tariffs as an inventory cost, which affects only one month of impact in the fourth quarter, culminating in a projected financial impact of $1 to $1.5 billion before tax. The complexity of pricing plans is noted, influenced by factors such as commodities, foreign exchange rates, and tariffs, and the need to tailor strategies by brand and market. The company is addressing these challenges as part of their standard operations and will incorporate findings into guidance ranges. During a Q&A, Robert Ottenstein of Evercore ISI asks about the rationale behind raising skincare prices in China, despite a difficult market, and questions the impact of trade policy changes on major retailers' supplier choices and views on private labels.

The paragraph discusses the dynamics affecting private label products and branded offerings in the market. Andre Schulten addresses the question about private labels, suggesting that he cannot speak for retailers' strategies but highlights the advantages of their collaboration with them, particularly in supply chain integration. The innovation in branded skincare products, such as Olay and SK-II, is emphasized, as it aligns with their business model of innovation-driven pricing and value. Schulten underscores the focus on maintaining stable, reliable, and cost-efficient supply chains and emphasizes their commitment to delivering strong branded offerings through continued investment and innovation, rather than commenting on the retailers' private label strategies.

Kevin Grundy from BNP Paribas asks about the slowing growth in Procter's enterprise markets, particularly highlighting China and the Middle East, and seeks insight into whether the slowdown is industry-specific or unique to Procter. Andre Schulten responds by noting that enterprise markets have been significant for the company's results, with strong growth rates of 6%, 15%, and 10% in previous years. He mentions regional differences, stating that Latin America and North America are performing well, with high single-digit growth in North America. However, Europe, particularly Turkey, is experiencing challenges due to economic and political issues, impacting market performance. Outside Turkey, growth rates are stabilizing, and Schulten is optimistic about maintaining growth above average portfolio rates in European enterprise markets.

In the paragraph, the speaker discusses growth in the Asia, Middle East, and Africa region, with the Middle East being the primary driver. India is highlighted for its profitability and consistent mid-single-digit growth due to local production and R&D capabilities. Although enterprise markets like these are inherently volatile, there remains a solid growth potential. Kaumil Gajrawala of Jefferies raises concerns about macroeconomic factors potentially affecting the pace of innovation rollouts, as consumers might be hesitant to try new things under pressure. Andre Schulten responds by emphasizing the company's commitment to innovation across all categories, considering it essential for category growth, particularly in Europe and North America. The key is maintaining simplicity in propositions.

The paragraph discusses the company's strategy to simplify the shopping experience by reducing unnecessary SKU complexity and focusing on clear product benefits, which should provide added value for consumers and support from retail partners. This approach is intended to enhance the product category overall. The conversation then shifts to a Q&A session where Robert Moskow questions Andre Schulten about commodity inflation guidance. Schulten clarifies that the $200 million figure for commodity inflation does not include the impact of tariffs, which is an additional $160 million. Schulten also mentions that the estimated gross impact of tariffs for the next year is $1 to $1.5 billion, but he does not comment on the commodity impact forecast for the following year.

The paragraph discusses the company's approach to managing its supply chain in light of potential changes and tariffs. Andre Schulten emphasizes that the company has strategically positioned most of its supply chain close to its consumer base, primarily in the US, as part of a $10 billion investment over the past several years. This proximity provides a strategic advantage, enabled by a favorable US tax environment. However, Schulten notes that supply chain adjustments require certainty and long-term planning due to significant lead times and potential reversibility issues. Therefore, the company is waiting for more predictable conditions before making any significant changes. He also mentions ongoing, but undisclosed, discussions with retail and supplier partners about absorbing tariff costs.

The paragraph summarizes a conference call where the speaker discusses recent market volatility and emphasizes ongoing open communication. They express confidence in their business model and strategy, particularly focusing on superiority, productivity, and organizational strength. They are committed to delivering results over the next two to three years while investing in growth with retail partners to benefit consumers. The speaker reaffirms their conviction in this approach and is available for further questions. The call concludes with the operator thanking participants and ending the session.

This summary was generated with AI and may contain some inaccuracies.