Kevin Jacobsen: Hey, Andrea. Let me maybe start with your shipment consumption question and then Linda can address price elasticity. As it relates to the fourth quarter, I think there’s a few things we are seeing, and I’ll talk both versus our expectations and on a year-over-year basis. Versus our expectations, as you know, we had anticipated about 3% to 6% organic sales growth, and we delivered much stronger growth in the quarter. That was primarily driven by consumption coming in stronger than we anticipated. So the consumer is still quite resilient and we haven’t seen any drop-off in consumption as we look Q4 to Q3 and we expect that we might see some drop-off in consumption, and that didn’t materialize. And then the other driver of our performance was Kingsford.
And as you know, we talked quite a bit about that last quarter. We were disappointed with the results in the third quarter. We made some changes to our plans. And I would tell you, we’re a bit cautious on what exactly we’d be able to accomplish in the fourth quarter. But credit to our team, we had very strong execution. That business grew both volume and double digit in sales, had a very strong performance. And that was the primary drivers to the over delivery. The other element to think about though as it relates to inventory, we think retailers generally have the right inventory levels. But one of the reasons we had very strong growth on a year-over-year basis is, if you think about last year, retailers were reducing inventory levels. And at the time, as we were all getting more comfortable with the resiliency of the supply chain, everyone was starting to take down their safety stocks.
And we saw that last year with retailers reducing inventory. And if you think about what’s really happening when they do that, what that means is retailers continue to sell to their customers, but they don’t reorder from the manufacturers. So they’re still selling product and not reordering from us. And so last year, our shipments lagged consumption. This year, as you fast forward, we saw our shipments much closer to consumption because retailers are not adjusting inventory levels. So on a year-over-year basis, that drove much stronger performance. That was particularly true in our home care business where we saw inventory reductions a year ago. We saw, and particularly in wipes, we saw very strong wipes shipments this Q4, which is really now we’re shipping in line with consumption, which was not the case a year ago.
And that really contributed to very strong year-over-year performance and that 14% growth. And then, Linda, I know she can speak to elasticities.
Linda Rendle: So on elasticity, what we saw in Q4 specifically was continued in aggregate, lower elasticities than pre-pandemic and lower than we had expected. Again, this is nuanced by categories or some categories that are less favorable, et cetera. But in aggregate, our elasticities were more favorable than we expected. What we expect to happen in fiscal year ’24 is over time those elasticities return to more normalized levels. And it’s not anything related to particularly our categories, but just the broader pressure the consumer is under. So if you look at what’s going on, certainly balance sheets for them are returning to pre-pandemic levels, particularly savings rates where the consumer had a lot of excess savings over the last few years.
Right now, we are anticipating a mild recession in the back half. We think that’s the most prudent plan based on what we’re seeing for economic predictions in the US. That will put additional pressure on the consumer as well. And we think those factors in combination will lead to more normalized price elasticities, and that’s what we have assumed in the plan.
Andrea Teixeira: That’s helpful. And on the — just a clarification, the impact of the inventory write-down — not write-down, but inventory rationalization last year, was it like a low single digit headwind that then disappeared this year or normalized?
Kevin Jacobsen: Yeah. Andrea, you’re exactly right. Last year, we anticipated there was a couple point headwind as a result of the inventory reductions at retailers. And so we didn’t have that impact this year. So year-over-year, that’s a source of benefit and part of the 14% organic sales growth we delivered this year, part of that was driven by lapping that inventory reduction in the prior period.
Andrea Teixeira: Super helpful. Thank you. I’ll pass it on.
Operator: And our next question comes from Chris Carey from Wells Fargo. Please go ahead, Chris.
Chris Carey: Hey, everyone.
Kevin Jacobsen: Hi, Chris.
