Procter & Gamble Company (The)

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. Procter & Gamble believes these measures provide investors with useful perspective on underlying business trends and has posted on its investor relations website www.pginvestor.com a full reconciliation of non-GAAP financial measures. Now I will turn the call over to P&G's President and Chief Executive Officer, Shailesh Jejurikar.

Good morning. Joining me on the call today are Andre Schulten, Chief Financial Officer, and Jon Chevalier and Kerry Coven, Senior Vice Presidents of Investor Relations. Before I hand over the call to Andre to begin the earnings portion of this call, I want to make a few comments on the second press release we issued this morning announcing Jon Moeller's upcoming retirement from the Board of Directors and the Procter & Gamble Company. I want to thank Jon for his many years of tireless and steady leadership at P&G, having served in key roles including Executive Chairman, Chief Executive Officer, Chief Operating Officer, and Chief Financial Officer. In fact, some of you first interacted with Jon when he became P&G's treasurer in 2007. Jon's strategic vision has been instrumental in shaping the company P&G is today, including his leading role in focusing P&G's portfolio and in designing our current operating structure. We have benefited from his unwavering courage and his profound care for this institution and its people. Again, I want to thank Jon for his 38 years of dedicated service to the company and congratulate him from all of us on a very successful career. Now I'll hand the call over to Andre to lead the earnings discussion.

Thank you, Shailesh, and good morning, everyone. I'll start with an overview of results for fiscal 26 and the fourth quarter. Shailesh will add perspective on our strategic focus areas and capabilities. And we will close with guidance for fiscal 27 and then take your questions. For fiscal 26, we met our core objectives despite unexpected headwinds. We managed through a very volatile environment and delivered organic sales, core EPS and cash return to share owners within our initial guidance ranges. We built plans to return the business to consistent growth across all categories and regions. We stabilized global market share and we identified and are deploying the capabilities needed to create the CPG company of the future to generate long-term growth and value creation progress in light of many challenges. Looking closer at fiscal 26 on a semester basis, we delivered an acceleration in top-line results up about one point in the first half and two points in the second half. We also saw improvement in market share in the second half despite some softening in underlying market growth as inflation increased. Positive trends we will build on in the new year. Moving to the details, organic sales grew more than 1%, volume was up modestly, pricing added a point, and mix was neutral. This includes around 40 basis points of headwinds from product, form, and go-to-market portfolio choices. Growth was broad-based across regions and categories. 9 of 10 product categories held or grew organic sales for the year. Hair care and skin and personal care each grew mid-single digits. Personal health care, baby care, home care, Fabric care, feminine care, grooming and oral care were each in line to up low singles. Family care was down for the year. All seven regions held or grew organic sales. Focus market organic sales were up 1% for the year. North America and Europe focus markets each grew modestly. Greater China organic sales were up 4% for the year. Enterprise markets were up 4% led by Latin America with 6% organic sales growth. E-commerce sales increased 6%, now representing 20% of total company sales. 26 of our top 50 category country combinations held or grew share for the fiscal. 5 of 10 product categories held or grew share globally. In aggregate, global value and volume share trends improved in the back half, exiting the year flat. Core earnings per share were $6.89, up 1% in fiscal 26. Core growth margin declined 40 basis points and core operating margin decreased 70 basis points. $2.8 billion before tax of productivity improvement across cost of goods sold and SG&A enabled an increase in investment in superior products, packages, and brand communication to drive market growth. On a currency neutral basis, core EPS was in line with prior year and core operating margin decreased 60 basis points. Adjusted free cash flow productivity was 100%. We increased our dividend by 3% and returned over $15 billion of value to shareholders, over $10 billion in dividends, and $5 billion in share repurchase, consistent with our guidance at the start of the year. For the fourth quarter, we saw improving global share trends versus prior period, but headline results were impacted by trade dynamics in the US and the spike in input costs. Organic sales increased modestly, rounding down to inline versus prior year, Adjusting for brand, product, and go-to-market restructuring impacts organic sales for the ongoing business were around 1% for the quarter. 2% when adjusting for one point of pull forward into Q3. Consistent structural growth of 2% across the second half of the year. As we mentioned before, the growth trajectory hasn't been and won't be a straight line quarter to quarter. Volume rounded down to flat for the quarter. Pricing and mix were also neutral for the quarter. Six of ten product categories held or grew organic sales. Personal health care, hair care, and skin and personal care each grew with singles. Baby care, fabric care, and grooming each were in line to up low singles. Home care, fem care, family care, and oral care were down for the quarter. Five of seven regions held or grew organic sales. Focus markets were down 1% for the quarter. Organic sales in North America were down 1% versus prior year. While consumption and market share of P&G brands improved through the quarter, there was a notable disconnect between sell-out and sell-in, with sell-out or consumption at plus 2% and sell-in at minus 1%. The shift of Amazon Prime Day to late June versus early July drove an increase in merchandising spending recognized in the quarter. Retailer inventory reductions, including the pull forward into last quarter, also contributed to the three-point gap Thank you very much. and the Asia Pacific Middle East Africa Enterprise region grew 3%. Global aggregate market share was in line with prior year. 23 of our top 50 category country combinations held or grew share for the quarter. On the bottom line, core earnings per share were $1.43, down 3% versus prior year. On a currency neutral basis, core EPS decreased 5%. These results include approximately $0.06 of higher costs. Thank you very much. Adjusted free cash flow productivity was 133%. We returned $3.5 billion of cash to share owners in this quarter, $2.6 billion in dividends, and roughly $900 million in share repurchase. In summary, a year of progress and foundational work to enable accelerated future growth. Momentum with consumers is improving, results within guidance in a challenging macroeconomic and geopolitical environment. Progress, but more work to do. Now I'll pass it over to Shailesh.