Noel Wallace: Yes, good morning, Steve. Thanks. So, let me talk again a little bit on volumes. Globally, as you’ve heard from others, volumes in the categories tend to be down around 2% to 3%. This is a function, obviously, of the aggressive pricing that you’ve seen sequentially over the last three or four quarters. So, that continues to improve, and in my view, that will continue to improve as pricing moderates over the next couple of quarters and we lapse some of the aggressive pricing that we’ve had, certainly within our P&L. But from a category standpoint, there’s going to be obviously a shift from more pricing-driven organic growth to more volume-driven organic growth. And it’s very difficult to actually predict exactly at the pace that’s going to happen by geography, because we’ve taken pricing, competitors taking pricing at different points in the year.
So, over time, sequentially though, we see volume returning to a more normalized level, and we see pricing returning to a more normalized level. And that’s more or less how it’s playing out. Difficult to predict from geography to geography, from quarter to quarter. On the margin, obviously, a lot of focus, as you know, across the business. We’ve got a lot of levers in the P&L now to drive operating margins and gross margins. Why don’t I let Stan talk to a little bit about that. He’s been very focused on driving that across most of our regions.
Stan Sutula: Thanks, Noel. Steve, it’s a good question on the driving margin. So, if you take a look at what we’ve been able to do with the income statement this year, the top to bottom, the flexibility and the strength on all the different lines, have given us a lot more opportunity to drive margin, and it gives us flexibility, and that allows us to react to market conditions and anticipate, and more importantly, invest in those areas of the business that can deliver value. When we look at all those collectively, we think that leaves us well positioned for expanding margin over time. And while we’re not going to give guidance for 2024 here today, we think that we are exiting the quarter with a stronger business model here than we entered the year.
Operator: Our next question today will come from Lauren Lieberman of Barclays. Please go ahead.
Lauren Lieberman: Great. Thanks. Good morning. So, in the release, or in the prepared remarks, you talked about some of the improvement in oral care toothpaste, specifically in North America, but I was wondering if we could talk a bit about home and personal care. The advertising spend, like you said, up 25% this quarter. Just curious about how that is maybe being allocated across the different divisions within North America, how you’re thinking about kind of innovation in home and personal care. I know, Noel, you’d mentioned some of the promotional cadence dynamics improving for home care in the fourth quarter, but I was just curious at efforts beyond that to kind of get those businesses more on the right track. Thanks.
Noel Wallace: Sure. Hey, Lauren, good morning. So, overall, the bulk of our North America business is oral care and it receives the bulk of that advertising increase. But pleasingly, we are supporting our home care and our personal care businesses, which is important. And clearly, as we get the promotional cadence back on those businesses, particularly here in the fourth quarter, we anticipate we’ll see an improvement in shares. Now, again, we had a lot of unprofitable share historically where we were chasing share and buying share. And we have deliberately, as we see great health across our P&L and the geographies across the world, we have the opportunity to right-size that in the US and get the shares much more profitable and get much more sustainable share growth moving forward.
And the intention is to continue to support all those businesses in the US as we move forward. The other one is our skin health business in the US is getting good levels of advertising. That continues to perform well. If you take our skin health business outside of China, that grew double digits in the quarter for us. So, we continue to see a nice growth on that business, and we’ll continue to support that in the US market as well.
Operator: Your next question will come from Chris Carey of Wells Fargo Securities. Please go ahead.
Chris Carey: Hi, good morning, everyone. I couldn’t help but notice the commentary around the currency impact carrying into 2024. At the same time, Noel, you were quite clear in your remarks today that Colgate has multiple levers to continue profit growth. This year, you’re going to be doing high single-digit earnings. It would appear on low single-digit currency impact. You, I think, put up the best productivity number on a basis point impact that we’ve seen in almost 10 years despite raw materials which remain stubbornly high. Well, I know there’s conversion and other costs in there as well. But just as you think about next year, and I know you’re not giving guidance today, but does your ability to still deliver high single-digit earnings this year despite the currency headwind, give you confidence on next year, especially because some of these drivers, like pricing, perhaps strong productivity and other levers at your disposal, remain available to you going into next year?
So, thanks for any perspective on that.
Noel Wallace: Yes, Chris, thanks. Listen, I’m not going to get into 2024, start predicting where things will evolve, but clearly, foreign exchange moved more negative in the quarter for us. And you’ve seen that obviously the dollar strengthening as we move into the fourth quarter. But as Stan rightfully pointed out, I think the important aspect here is that the levers within our P&L are better than they’ve been in quite some time. We have different aspects playing to our advantage now. Obviously, we’re getting the pricing executed in the market. We’re starting to see volume flow through over the longer term. That will improve efficiencies in our plants. As we’ve gotten our forecast accuracy improved in the plants, that allows us to obviously run more of our funding the growth, which obviously came through very strong.
We have the productivity moving through the P&L. so, we’re really trying to pull on all levers to give us as much flexibility as possible. Foreign exchange is obviously a big unknown as we move forward, but you’ve seen us historically be able to price against this. We obviously have some inflationary pricing in the P&L in the third quarter based on where we see the Argentine peso go, where we see part of the Nigeria foreign exchange has been an issue as well, and likewise in Turkey. But over time, the important part is for us to drive flexibility through our P&L so we can adjust to market circumstances in the most efficient and prudent way.
Operator: Next question today is from Mark Astrachan of Stifel. Please go ahead.
Mark Astrachan: Yes, thanks, and morning, everybody. So, yesterday, a competitor of yours, sort of in certain categories, talked about refocusing the business on product superiority. Obviously, a large US competitor has successfully pivoted the business towards that strategy, with success in recent years. Curious how you think about, or would assess the portion of your portfolio and innovation that meets the criteria. Have you adjusted R&D as a focus, the spending towards these product areas? And as sort of a second question, it might be related, might not be, the issues you bring up with the H&H business in China. Maybe I’m naïve in assuming that some of it could potentially relate to this, where you’re taking prices up but not necessarily innovating. If that’s wrong, obviously talk to that, but just kind of talk generally about what’s going on there and how much is price, how much is other stuff. Thank you.
Noel Wallace: Yes, thanks, Mark. Let me come back to the core of our strategy, which was innovating across our core in adjacencies and channels. And all of it is underpinned by science-based innovation, and that has always distinguished our portfolio historically, and we have absolutely dialed that up in terms of how we focus our R&D efforts across the organization. Good examples of that is obviously the growth that we’ve had in the whitening segment. We have, in our view, some of the best efficacy-based products in the category. We’re very pleased with the growth that we’ve seen in whitening at the premium side with our peroxide-based. We’ve obviously moved into pens, which is incremental consumption opportunity and the opportunity to drive regiment and a premiumization.
