Olivia Tong: Great. Thanks. And great work on the improvements. In terms of the macro backdrop you talked about how — for second half you’re now no longer expecting the recession that you had before, but could you just talk about what your expectation target for the current environment to stay the way the second half to be similar to what we saw in the first half or that there is still a step-down just not as much as you had before.
Linda Rendle: Hey, Olivia. On the macroeconomic and consumer front that’s exactly right, we are no longer expecting a mild recession. Of course when we released our outlook six months ago, we said that’s an assumption. And if it changes, then we’ll adjust. But really what we meant by mild recession and the impact it would have for us is a more stretched consumer, and we continue to see this in environment that leads us to believe that consumers will be more stressed. And if you start to look at categories around us that certainly has been playing out, we feel the impact will be moderate to our categories, given the fact that we play in household essentials. But we are seeing consumers more use of credit. We’re seeing them shift their behaviors and showing things that they value and don’t value discretionary goods have been down for a while.
And we see the cumulative impact of that, as they’ve gotten down to a place now where their savings were down to pre-pandemic levels, they no longer have that extra disposable cash even though employment remains high. We think that all adds up to a more pressured consumer. And we think the impact of that will be a moderate impact on our categories, as consumers are more conscious about how they spend their dollars. That’s really the assumption. Again, the consumer has been resilient to-date, we continue to see that, but we are seeing them in our categories, they are value-seeking . And as I mentioned earlier, they are trading up to larger sizes, they’re using opening price points, they are stretching their dollar they might be trading into an item they feel like is more multipurpose.
And at the same time we’re seeing them given the superior value of our products, they are trading at a premium, because they are not willing to trade-off efficacy, they are not willing to trade-off convenience. So we’re seeing all of those things play out. But we just think the consumer will continue to be under more pressure, not in the form of we believe a mild recession anymore, but just all of the other macroeconomic factors that are out there.
Olivia Tong: Got it. That’s very helpful. And then relative to your expectations going into the year, obviously, putting aside the cyberattack. Do you think you’ll end the year in line with the your — start of your target on promotion and merchandising levels? Because I’m trying to understand obviously, there’s a lot of puts and takes of where your expectations they’re now versus in August before the cyberattack happened. But you had said in the past that perhaps we’d have to do a little bit more promotion, little bit more merchandising just to make sure that given what’s happened. Just wondering, today what you’re thinking in terms of the level of promotion merchandising relative to where you started the year.
Linda Rendle: Yeah, on that assumption, certainly we saw a dip in Q2 given the out-of-stock situation. And we had to prioritize, ensuring that we got supply up before we could merchandise. But now that we’re returning distribution and market shares, we would expect promotion to pick up and we expect for the back half the same assumption that we had at the beginning of the year, which is higher than it had been, and returning closer to pre-pandemic levels. We don’t think that merchandising will exceed pre-pandemic levels, but begin to return to that level. As people are focused on a more stressed consumer and continuing to offer the right value. And of course, doing things like releasing innovation, ensuring we introduce consumers to new items and great innovation. So that’s what our expectation continues to be, we’ll see merchandising increase than what it was last year, getting closer to pre-pandemic levels and we expect that to happen over the course of Q3 and Q4.
Olivia Tong: Got it. Thank you so much.
Linda Rendle: Thanks, Olivia.
Operator: This concludes the question-and-answer session. Ms. Rendle I’d now like to turn the program back to you.
Linda Rendle: Thank you, everyone. As we covered today we’ve made strong progress on our priorities in the second quarter. While there is still more work to do to fully recover in the market from the cyber incident, we’re focused on executing with excellence and delivering on our strategies to drive top line growth and rebuild margins. Guided by our IGNITE strategy, we’re confident we have the right plans in place to deliver long-term shareholder value creation. And as I mentioned earlier in the call, we look forward to sharing more with you in our upcoming presentation at the CAGNY Conference in February. Until then please stay well everyone.
Operator: This concludes today’s conference call. Thank you for attending.
