David Palmer: Thank you. Good morning. Question on the fourth quarter. You mentioned organic revenue growth would be within algo. I assume that’d be 2% to 4% up, including the Russia drag. And I’m also wondering, how you’re thinking about a 4Q sales breakdown between North America and other segments. And the reason I’m asking about that is really the scanner data quarter-to-date. It shows down roughly 4.5% in what we see in terms of US measured channels. So, it would look like you would have to be pretty heavy lifting for international for that to stay that way and for that to reflect what sort of organic revenue growth you’d have in North America in 4Q or put a lot of burden on international. So any thoughts about what we’re seeing there or thoughts about improvement in North America, what we’re seeing is not real or perhaps any particularly strong growth internationally would be helpful.
Amit Banati: Yes. I think similar trends to what we are seeing right now from a quarter four standpoint, if you exclude WKKC from the base, the Russia divestiture would be about a 1% negative impact and then currency translation around 3%. So, I think if you kind of exclude those 3%, you get to the — you get to our algo growth of somewhere between 3% to 5% for the overall business. We would expect international to grow faster than the US in the next quarter. We continue to expect price elasticities. That’s always been in our guidance, so we expect that to continue. We’d expect volume to be down, but for the decline to moderate in quarter 4 as we get back to full merchandising, particularly in the US. So that’s kind of the shape of what we’re expecting in quarter 4.
David Palmer: My follow-up to that is, if it’s down — if North America were down 4%, then the international would have to be something like up 10%. So that’s why I’m asking. It just seems like you must be expecting North America to improve from now. I know back at the Analyst Day in August, you were talking about merchandising activity for Cheez-It and some marketing coming through. So I’m wondering, are you expecting a meaningful improvement? Or do you expect that sort of heavy lifting from international?
Steve Cahillane: Yes. I was going to say it’s a lot like quarter 3. And you can see in the scanner data that we did return to merchandising activity. We haven’t yet gotten the quality display activity that we’re now seeing. So you’re going to see a gradual improvement going into Q1 of 2024 as well.
David Palmer: Great. Thank you.
Operator: Thank you. Our next question comes from Ken Goldman of JPMorgan. Your line is now open. Please go ahead.
Ken Goldman: Hi. Thank you. With the caveat that you’re not quite ready to talk about certain details in 2024 yet, The Street is — and it’s great to hear that you’re expecting an on-algo year. But The Street is looking for volume growth as soon as the second quarter of next year, and I wasn’t quite sure if that was reasonable. And I don’t know, if I’m asking a question that you can even answer at this point in time. But I’m — my hope is that Street numbers can maybe be a little more reasonable at some point. If that’s the case, just given some of that — you’ll still have some pricing flowing through and there’s still certain challenges around the world, I just wouldn’t want people to come out and have numbers that are too high and disappointed. So I didn’t know if you could talk about that at this point, if there’s any kind of commentary you could provide on volume growth into next year at this time, given the lack of visibility, I understand.
Amit Banati: Yeah. Like I said, we’re working through our budgeting process right now. I think we’d expect a gradual return to volume growth in 2024. Obviously, as you start lapping some of the price increases and some of the volume in quarter three, the laps get easier. But that’s probably the shape of how we’re looking at 2024 right now.
Ken Goldman: Okay. Thank you.
Operator: Thank you. Our next question comes from Michael Lavery from Piper Sandler. Your line is now open. Please go ahead.
Michael Lavery: Hey, good morning. You touched on some of the margin drivers, the pricing now offsetting inflation better, the productivity, the normalization of where the supply chain disruptions had been. Can you maybe give a sense of order of magnitude or — really trying to understand what are the most sustainable and how to think about looking ahead. And then part of that, is there any way to quantify — you mentioned some of the additional costs from the parallel operations but still had — against our expectations, still a nice margin performance. Can you quantify some of that? Was that significant and obviously lapping that? Or are you putting that in the rearview? How much of a lift should that be looking ahead as well?
Amit Banati: Yes. So I think in terms of gross margin, I think you hit on the two biggest items, right? So it is pricing, catching our presentation, and it is a much better performing supply chain. So those two are the biggest drivers of the gross margin improvement and it’s been coming in better than what we had expected and faster than what we had expected. So more of a timing in terms of the catch-up happening faster than what we have planned for. So — and I think in terms of — the parallel costs, we did incur some parallel costs in quarter three for — as we kind of ran value operations. I think that’s now behind us post-spin. I wouldn’t say, it’s a significant lap item for next year. So we did incur costs, but they weren’t really significant from a lap standpoint.
Michael Lavery: Okay. That’s helpful. And just a follow-up on your color on the consumer, just in the release and prepared remarks talking about how they’re stretched or elasticities are getting sharper. Can you just maybe give us a sense of how much visibility you have on the broader dynamic in terms of trading down from food away from home? That would, in theory, give a lift to packaged food, but then obviously, the pressure you are seeing with either trade-down, just some of the consumer dynamics and where that all nets out for you? And we’ve seen in this quarter, obviously, what that looked like, but maybe some of what you expect in the fourth quarter or looking ahead. Is it better? Is it worse? Is it more of the same? You touched a little bit on the volume thoughts for 2024. But just curious for the consumer perspective behind that, that you see as the real driver.
Steve Cahillane: Yeah. Michael, I’d say the consumer is clearly strained. There’s evidence of that. There’s some degree of channel shifting. There’s some degree of trading down to smaller sizes. There is definitely a traffic pattern when they’re shopping, more trips, all those types of things. Having said all that, though, I think the overarching line is still the resilience of the consumer. And particularly for our categories, we’re talking about affordable luxuries. We’ve talked about that in the past. And we’re not really seeing any meaningful shift to private label or anything that points to a structural change in consumer dynamics. And we’ve said this in the past, when you take the type of pricing, you’re talking about 30-plus percent pricing over the last 18 months, the type of volume decline that we’ve seen in aggregate is still much smaller than you would otherwise expect.
