Jon Moeller : Yes. Just one quick clarification there. The $40 billion that Andre is referring to is a annualized run rate number. So it was $10 billion in the quarter, which translates to $40 billion, number 4, just so people don’t get too carried away. Fair enough. Lauren, the point that you made and the point Andre made, there’s a lot of upside here as we bring this capacity online. We indicated we’re not meeting full demand in some of the protection segments. We have opportunity, as you said, across the board. So we’re investing pretty significantly. I think as he said and you’ve said the bigger impact will be in our ability to accelerate the top line. It should not be a significant bottom line drag.
Operator: The next question comes from Bryan Spillane of Bank of America.
Bryan Spillane : I just — I had one clarification and one question. The clarification, just I think in response to Dara’s question, you cited 3-point hit the volume from basically Russia and shipping behind consumption. So if we add that back, organic sales would have been closer to an 8 versus a 5. I just want to make sure that, that was the way we should be thinking about it?
Andre Schulten : That’s correct.
Bryan Spillane : Okay. And then as we look into the back half of the year, I guess, just if you could comment on two things. One is, has anything changed in terms of your view of the macro setup? So just as the operating environment the same, better or worse than what you were expecting? And then also, just would we expect maybe to rebuild some of the inventory, the under shipment that occurred in the second quarter or the first half, would we get any of that back in the second half?
Andre Schulten : I would say the operating environment continues to be difficult, and we expect it to be difficult in the second half. While I think the U.S. is holding up very well. Enterprise markets are holding up very well. As John said earlier, recovery in China will be very hard to predict and probably not a straight line. We expect China to be difficult in the second half as it was in the first half. The European markets will continue to have to work through very high inflation numbers I think we’ve seen a little bit of help via a warmer winter season that has helped energy prices. But Europe is not through, I think, inflationary pressures and consumers are still to see many of the consequences in terms of the eating builds as we are entering February and March.
That doesn’t change anything we do. I think the best way for us to get through all of this is to continue to invest in the business and to continue to execute with excellence, which the organization is doing and which is driving these good results. Our ability to carefully balance pricing and productivity to offset the inflationary pressures is critical. Within pricing, careful execution and combining pricing with innovation and sufficient investment to drive superiority of our brands is critical. So that’s why we want to preserve some level of flexibility to do those investments as we get through the second half.
Jon Moeller : And just a little bit of color on the inventory piece, which has been accurately described a couple of times here. This is a fairly simple dynamic that’s occurring. When there is supply volatility and uncertainty, it causes retailers to build higher inventory levels. When there’s demand volatility, it does the same. So we’ve been through a period where inventories have been a little bit higher than normal in some of our retail channels. Supply assurance is increasing, demand volatility is decreasing. So those inventories are understandably being brought down. And so Bryan, I don’t expect that there’s a significant swing here quarter-to-quarter. I think this is the system normalizing itself.
Andre Schulten : Yes. I think Jon is exactly right. Our on-shelf availability is getting better. We’re up now to 95% on-shelf availability, up from 93%. We make sequential progress. So as the supply chain is stabilizing, I wouldn’t expect immediate return of those days on hand. I think some of it will come back, but it will take a longer period of time.
Operator: The next question comes from Stephen Powers of Deutsche Bank.
Stephen Powers : I wanted to go back just to the topic of reinvestment for a minute. It was a big topic last quarter, and I think you convinced us then and through your commentary at Investor Day that you were actually pretty fully invested in your prior outlook enabled by productivity. So as you think about the reinvestment that you’re implying incrementally in the new outlook. I’m just — is that — should we interpret that as elective and opportunistic for kind of greater medium-term returns? Or is it more necessary in the near term given more concerning consumer competitive realists? Just how you’d frame that reinvestment would be helpful. And then if you could also just — you talked about strength in the enterprise markets, your resilience. Just if there are any pockets of particular strength you could call out, that would be great. And any areas where you’re more watchful, that would also be helpful?
Andre Schulten : I would characterize our current media spending and support spending for our brands as sufficient, which we are paying a lot of attention with each of the businesses. John pays a lot of attention with each of the businesses to ensure that is the case. And sufficiency is defined as sufficient reach, sufficient frequency. It’s not defined as dollars spent. So again, I want to come back to the fact that, yes, we view the current business as fully funded, sufficiently funded in order to continue growing our brands, their top-of-mind awareness and their equity. When we reinvest because there is a positive return in the short term, and we can further strengthen our brands or specific innovation that is out there. In the most recent quarter, for example, we’ve increased quarter-over-quarter, our total ad spend by $140 million.
And that is a function of innovation timing. It’s also a function of merchandising support and core timing advertising with that retailer support. So we — you see us adhere to that principle of fully supporting our brands if there are opportunities to create short-term ROI, will continue to double down.
