Andre Schulten: Good morning, Keith. Yes. So commodity benefits, as we’ve mentioned in the script and you correctly state, have been really impacting fiscal year-to-date results. Any remaining change and we see obviously the impact of oil running up a little bit and also other commodities like pulp, for example, where the supply situation is a little bit tighter are coming up. There will be some impact on the current fiscal year, but given flow through of contracts and various holding policies, I expect that to be limited. And we anticipated that within our updated guidance ranges. So no impact to the current fiscal year. Obviously, if spot prices hold, you correctly stated, it will have an impact on next year. But I do feel strongly about our ability, and I think we’ve proven it over the past 2 years, that with a combination of strong innovation, good reasonable pricing combined with that innovation and strong productivity, whatever comes our way, we’ll be able to handle.
On the productivity pipeline, I feel very good about where we are. We have now across all businesses a 3-year, what I would call, a productivity master plan, which is something that we invested a lot of energy and time on in each business to make sure that we generate enough ideas, even those that take longer to implement, specifically as we work with our retail partners and we work with our supply chains to really fundamentally improve the efficiency of some of our combined processes. We have great visibility over 3 years. The pipeline is sufficient to what we need it to be. So the part I feel really strong about is productivity. It’s fully in our control, and I think the teams are doing a great job creating projects and creating visibility to a very strong pipeline over the coming years.
Operator: The next question is from Andrea Teixeira with JPMorgan.
Andrea Teixeira: Andre, I was hoping if you can elaborate a little bit more on the flat price mix in the U.S. in fiscal 3Q. If are you seeing any downside within your portfolio? Or is that self-inflicted as you offer, more IGM on the lower price points or anything about packing that we shouldn’t be aware of and also related to that I saw you, you mentioned in your leaves about the price related volume declines in Baby Care. Is that mostly China? Is there anything you can elaborate? Or is that also the U.S? And I think to Steve’s commentary about commodities and question about commodities, anything you can talk to us regarding the lag that we’re going to see that coming through into fiscal ’25?
Andre Schulten: Look, the flat price mix contribution to organic sales growth in the U.S. is an outcome of simply annualizing the price increases that we had taken in previous periods. That was anticipated and it’s consistent with what we’re seeing in terms of the construction of the market growth across the U.S. The volume component is coming up, getting closer to about 2%, and the value component is coming down. Different players have priced at different points. So that’s really the differential between market and us. There is no trade down of note that I that we can observe. Private label shares, value shares are actually very stable, 16.4% past 1 month and 16.4% past 12 months. So consumers are not trading down within the U.S. towards private label.
And if anything, we continue to see when consumers trade into P&G, which they continue to do because both volume share up strongly in the U.S. and value share up. Once they trade into P&G propositions, they continue to trade up actually within those propositions, be it from liquid detergent to unit dose to power pods. So we continue to observe that. So no worries in terms of trade down. On Baby specifically, look, Baby is annualizing a very strong base period and obviously was heavily exposed to the commodity run up and therefore took pricing and in combination with productivity and strong innovation. The volume decline, I would say, is really differential by region. If you look at China, the business is growing very strongly. It’s actually 11% growth in the quarter, share growth of more than a point in China, and that’s with birth rates contracting.
So the portfolio strength in China is remarkable. When I look at the U.S., the premium tier, so when you look at swaddlers, you look at cruisers and cruisers 360, those tiers we have been innovating in very strongly over the past 12, 15 months, and they are growing. They are growing share, and they are growing sales. Where we have an opportunity in the U.S. is on the mid-tier. On Luvs, for example, we have not been able to push the full innovation pipeline out for different reasons, and that’s what the team really is focused on to reestablish superiority on those few businesses where we feel that we let value get a little bit out of sync with what the consumer needs. But the plans are there, so now it’s a matter of execution. So I feel very good overall about the baby care business, strong innovation pipeline, and that I think will address the isolated superiority gaps that we might have.
On commodities, it’s very difficult to say when they would actually flow through. I think it’s safe to say that there’s at least 60 to 90 days of delay. Many of the commodities will take longer to flow through simply because of contract structures that use certain trigger points or holding periods. So I would say at least 60 to 90 days, for many of them probably longer. The only one that tends to flow through quickly is fuel diesel, obviously, because it’s captured in transportation.
Operator: The next question is from Dara Mohsenian with Morgan Stanley.
Dara Mohsenian: We just touched on pricing. Maybe we can switch to the volume side. Can you just talk about your level of visibility and perhaps a bit of magnitude that you’re expecting in Q4 in terms of returning to volume growth going forward? Obviously, a flat result this quarter, but there were some items that depressed volume, they get better going forward in terms of U.S. inventory, SK-II weakness, etcetera. So just looking for some perspective going forward, particularly as pricing presumably continues to decelerate a bit. And also maybe you can just touch on given the heavy marketing this year, presumably with the SG&A increases, the level of payback and ROI you think you’re getting on that higher marketing in terms of volume?
