Colgate-Palmolive Company

Good morning. Welcome to today's Colgate-Palmolive Third Quarter 2025 Earnings Conference Call. This call is being recorded and is being simulcast live at www.colgate-palmolive.com. Now, for opening remarks, I'd like to turn this call over to Chief Investor Relations Officer and Executive Vice President, M&A, John Foucher.

Thanks, Drew. Good morning, and welcome to our third quarter 2025 earnings conference call. Today's conference call will include forward-looking statements. Actual results could differ materially from these statements. Please refer to our third quarter 2025 earnings press release and related prepared materials and our most recent filings with the SEC, including our 2024 annual report on Form 10-K and subsequent SEC filings, all available on Colgate-Palmolive's website for discussion of the factors that could cause actual results to differ materially from these statements. Our remarks will also include a discussion of non-GAAP financial measures, which excludes certain items from reported results, including those identified in Tables 4, 6, 7, 8, and 9 of the earnings press release. A full reconciliation to the corresponding GAAP financial measures is included in the third quarter 2025 earnings press release and is available on Colgate-Palmolive's website. Joining me on the call this morning are Noel Wallace, Chairman, President, and Chief Executive Officer, and Stan Petula, Chief Financial Officer. Noel will provide you with some thoughts on our Q3 results and our future plans, and then we will open up for Q&A. Noel?

Thanks, John, and good morning, everyone. Thanks for joining us today as we discuss our Q3 results, and more importantly, the steps we are taking to accelerate our performance in this volatile operating environment. importantly focused on the priorities and actions set out in our 2030 strategy. As you will hear today, consumer uncertainty, tariffs, geopolitics, high-cost inflation, and other factors are all pressuring sales and profit growth across the consumer sector. Despite these headwinds, we are operating with determination and focus. We have healthy brands in growing categories for strong market shares and a diverse global footprint. with nearly 50% exposure to faster growth emerging markets and a best-in-class global supply chain to service that demand. We remain committed to our goals of delivering organic sales growth, net sales growth, and dollar-based EPS growth, and to our capital allocation priorities to drive total shareholder return towards the top end of our peer group. We have done that over the past five years and have confidence in our ability to continue to do that. What drives this confidence is our ability to execute on our 2030 strategy to accelerate change as we adapt to this complex and changing environment. Coming off our 2025 strategic plan, we have improved our innovation, built and scaled our capabilities, improved our organic sales, and market share performance and deliver consistent annual dollar-based EPS growth. This is the perfect time for our strategic transition as we're coming off our 2025 plan, which built the organizational muscle necessary to execute our strategy and focus on global alignment. This is not wholesale change, but rather we are working to accelerate the rate of change as we embark on our 2030 strategy. We have made and are continuing to make the changes that are required to drive out performance, and over the strategic time horizon of our 2030 strategy, we will emerge a stronger and more effective company. As I outlined in September, we are taking concrete, intentional steps to accelerate our growth going forward, steps that will drive performance in any market environment, but particularly important now. These include... a new innovation model with additional resources focused on delivering more impactful, science-based innovation across all price tiers. This new model includes investment in people, process improvement, and resources and tools, including AI, to make us faster and better able to prioritize the innovative products and packaging that matter most to our customers and consumers. We are focused on omnichannel demand generation, including upskilling our commercial organization to be more consumer-centric by adopting how we deliver the right products with the right content with the right message to the right people at the moments that matter. This will help continue to build the strength of our brands and drive brand penetration. Having scaled new capabilities we prioritize as part of our 2025 strategy, including digital, data, analytics, and AI, we will drive more dynamic change by accelerating our investments and efforts in areas like RGM and agentic AI, working to drive efficiency, disrupt our own processes, and integrate new ways of working across the company. And using predictive analytics and automation more and more across our supply chain to deliver personalization at scale, drive optimal asset utilization, minimize downtime, improve our service levels, and enhance our quality systems. Underpinning many of these initiatives is our Strategic Growth and Productivity Program. While this program will enable us to fund incremental investments and deliver savings to drive dollar-based earnings growth, it is even more vital as a strategic enabler to facilitate the changes in behaviors and processes needed to accelerate organizational change. making us more flexible and simplifying our processes to increase speed and efficiency. Because of these actions and the fundamentals of our business, we believe we are well positioned to outperform in the context of the current global category slowdown for several reasons. The strength of our business in emerging markets gives us the ability to drive faster category growth as developed markets remain sluggish. Hill's underlying performance remains very good in a softer category given our robust innovation and our ability to gain market share in low-development segments like cat, wet, and small paws. The health of our brands across categories following years of investment provides us with opportunities to drive pricing to offset raw material inflation. Across our business units, we continue to have well-funded advertising and innovation plans. And we're operating with an even greater focus on revenue growth management, particularly with prescriptive analytics and AI. And we continue to generate strong cash flow to invest in the business and help drive TSR. The timing for us to be kicking off our 2030 strategy could not be better. We are seizing this moment as the 34,000 Colgate Pomola people around the world work to deliver on the change needed to reaccelerate growth and outperform. And with that, I'll take your questions.