Andre Schulten: On the volume side, look, I think the effects that we described that are holding us back in the current quarter, the inventory effect in the U.S. of 2 points, which is a point on a global basis, I don’t expect that to hold. So I expect the U.S. to continue to grow in terms of volume beyond the 3% that we’re seeing in the current quarter. I expect some of the negative headwinds in China, the Middle East and SK-II hopefully will improve sequentially. But in aggregate, I fully expect the markets to continue to recover, shift more towards volume growth as we’ve seen consistently over the recent periods. And since we’re growing or holding volume share in most geographies that will also flow into our results. So sequential progress on volumes, many open questions still, but I expect the line to point upwards.
On marketing spend, you’re right. We continue to invest in reach frequency with strong quality of communication across the markets. We are very diligent in pre ROI analysis and very diligent in post event analysis to ensure that we understand whether the spending is effective. And if you look at the results, I would argue it is. The strongest combinations of great product innovation with a very sharp consumer insight translated into a great copy drives strong results. So if you look, for example, at our Skin and Personal Care business, Old Spice and Secret total body deodorant, great consumer insight, great product, great packaging, strong communication, and the business is growing 11% in North America. If you look at our home care portfolio, those are categories that are expandable.
Swiffer PowerMop, for example, getting new users to use Febreze plug-ins, those marketing investments grow the market, and they grow our share within the market. So expandable categories is a big investment area for us. So we continue to drive high levels of discipline. We will not spend if there’s no ROI. And you’re right, we’re watching the same and asking the same question to ensure that we remain on the right side of that line.
Operator: The next question is from Bryan Spillane with Bank of America.
Bryan Spillane : Maybe, Andre, just to pick up on that last point. I guess if we think about year-to-date and I guess as it translates to the full year in the base, we have some headwinds that shouldn’t recur, right? The weakness in Corporate Chemicals, the destock that you just mentioned, SK-II, I guess being more negative than overall market in China for the reasons we know. So I guess as we kind of think about next year, right, and confidence in being able to be in line with long-term organic sales targets. Does the comps make it easier? Should we be thinking about the macro environment maybe not being supportive? Just try to put some context around the organic sales growth this quarter, which decelerated from the last quarter and just is there anything we should be thinking about as we move we start thinking about our models for next year?
Andre Schulten: I would point first to the market growth expectation, which we said we expect markets to be in the range of 3% to 4% in terms of value growth. And that will be a combination of 2 points of volume and 1 to 2 points of price mix. That is still our assumption. Our role per our growth algorithm is to be growing slightly ahead of that by driving market growth, which in turn will drive share and a bigger part of us leading the market. So that would be my answer. On the current fiscal year, obviously, by reiterating guidance of 4% to 5% and being right in the middle of that range fiscal year-to-date. That means mathematically we expect quarter four to be in the 4% to 5% range. And if you project that out, I think with the market growth dynamic I was describing, I think that will give you a good starting point for next fiscal year.
Operator: The next question is from Bonnie Herzog with Goldman Sachs.
Bonnie Herzog : I just had a quick clarification on your guidance. You maintained your FY ’24 organic sales growth of 4% to 5%, but that implies a step up of growth in Q4 to get to the high end of your range. So I guess I wanted to clarify if you still expect to be at the high end or should we assume coming in at maybe the midpoint of your top-line guide for the year is more realistic? And then maybe just a quick question on your SG&A expense, which did step up quite a bit during the quarter. So just maybe hoping for a little more color on the drivers of this.
Andre Schulten: We did not reiterate the top end of the range, but we reiterated the range. And that means 5% is still possible. Is it probable? I don’t know. Probably more 50-50 than it was before. So the range is valid. I wouldn’t point today at the top end of the range. On the SG&A line, we continue to invest in marketing as we discussed in previous question, and we really saw an increase in our marketing spend of about 14% year-over-year. That’s the main driver. It’s offset by productivity on the SG&A line, but really I would point to continued investment, productive investments to drive market growth and push out our innovation and that’s the main driver of the SG&A increase that you’re seeing.
Operator: The next question comes from Olivia Tong with Raymond James.
Olivia Tong: My question is about mix, which flattened out this quarter after about a year and a half of improvement. So, clearly, you guys have been adamant that we’re not seeing trade down. But, as you look at this, how much of that is trade up is just harder to do now? You’ve obviously done you’ve been very successful all of late with Powerwash and EZ-Squeeze and Paws, etcetera, etcetera. So is that becoming harder? And could you talk about mix expectations over perhaps the next 12 months?
