Operator: The next question comes from Filippo Falorni with Citi.
Filippo Falorni: I wanted to go back to the U.S. market. The 5% consumption level was pretty strong and we see in track channel data. Are you expecting from a reported standpoint to get closer to that level in Q4 as you don’t have the negative impact from the inventory? Or what are the puts and takes in Q4? And then just specifically on laundry in the U.S., your largest category? There was some recalls in Tide PODS recently, so maybe you could talk about any potential impact from that in Q4. And then longer term, you announced the innovation on Tide EVO, so maybe some color on the rollout of that brand and the product and your expectations?
Andre Schulten: Yes. Hi, Filippo. You’re right. We hope U.S. market growth continues in the high 4s, low 5s, and I think the trend line is pointing in that direction. And unless we see any major inventory reduction, I would expect us to continue to trend in that same direction. We are driving market growth in most of our categories in the U.S., and that should mathematically then result in stable to increasing shares both on the volume and value side. And that’s certainly the objective the team has on all the U.S. businesses. The laundry recall, it was a very limited recall on a packaging defect on 1 SKU on Tight PODS. Out of an abundance of caution, the team decided to recall the product. It’s no impact or very limited impact actually on the quarter or the fiscal year.
And again, that product itself is safe, so no issue with the product. It was a small packaging defect, but in any case, the team decided to go ahead and recall. We’re very excited about the EVO innovation. The fiber spinning innovation has been one of our core developments, so seeing it in market is exciting, but it’s very early. So we run these test markets to validate product market fit, validate the commercial execution, validate everything from packaging color to packaging sizes. And it’ll take us a few months before we have anything of substance. But yes, the innovation is very exciting, but it will take time before it has an impact on overall laundry growth in the U.S.
Operator: The next question comes from Robert Ottenstein with Evercore ISI.
Robert Ottenstein: Two follow ups. First, can you talk a little bit more about Europe, very strong market and your results have been extremely strong. So perhaps what’s driving the strength of the market, your market share gains? And is this something that you think can flow through into 2025? And then second, kind of coming back on China, there’s been significant channel shifts that we’re noticing certainly in the beauty area. It’s 50% to 60% online with TikTok being half of that. So kind of number 1, wondering to what extent you’re adapting to that and are prepared to adapt to that shift? And then second, for the non-beauty business, do you also see the online business moving to TikTok as well? And maybe talk about your share online and off line in those categories, the main categories in China?
Andre Schulten: Indeed, Europe results have been outstanding. Aggregate Europe between Europe focused markets and Europe enterprise markets, we now have, I think, 12 consecutive quarters of 5% or higher growth, which is outstanding. I think the strength of the business maybe let me focus on the focus markets here for a minute. The strength of the business has been consistent because of the execution of the team, strong innovation pushed out over an extended period of time as we were taking pricing, very strong productivity work in the region across every part of the P&L to limit the amount of pricing we needed to take but brilliant execution of the pricing that was taken, respecting key price points, respecting retailers and consumer constraints, and I think that’s playing out.
We’ve also invested very strongly probably more than ever in terms of marketing support of those innovations in the focus markets. And we are building the same digital capability in terms of consumer targeting to become more effective and efficient with our spend in Europe that we’ve used in the U.S. for an extended period of time. So all of those would be contributors to growth. On the enterprise market side, I would caution it’s not without headwinds. Russia continues to be a headwind that we called out with a reduced portfolio and very little support of the business. We have work to do in Turkey as Turkey recovers from the heavy inflation based pricing and some of the Middle East outflow of tensions. So it’s not without headwinds, but I think the underlying performance of the European business continues to be strong, and it’s built the right way.
You’re correct on the channel shifting in China. Obviously, Douyin is a significant driver, most heavily probably in beauty. We’ve been talking about this before. What we want to make sure is we keep a healthy balance between building brand equity versus simply low funnel transactional execution via KOLs that only make sales via deep discounting, but don’t do anything for the brand equity or for our superiority messaging. That’s what we’re doing. We’re building brand houses on Douyin. We’re making sure that we have a good balance between transactional communication and equity communication. We have innovation that is launching on Douyin First, Head and Shoulders Premium would be a good example of most recent innovations. So we’re playing in the channel, but we’re playing with a sense of value creation and balance between top-line growth and profitability.
The channel is relevant for other parts of the business as well and the same principles apply. We are careful to ensure that we are balanced across top line and bottom-line, and we protect and grow underlying brand equity.
Operator: The next question comes from Peter Grom with UBS.
