Peter Grom: Thanks, operator, and good morning, everyone, and hope you’re doing well. Maybe one quick housekeeping. Can you maybe just help us understand how much of the stronger earnings guidance was related to the improvement in FX? Andre, I know the FX guidance became more favorable, but I think you also mentioned you’re reducing your exposure due to divestiture Argentina. So I just want to make sure I understand the moving pieces as it relates to the FX impact on the earnings range. And then just a quick follow-up on SK-II in China, I think month to month improvement was mentioned. So just any color you can provide on the exit rate relative to the 30% decline in the quarter, I think would be pretty helpful.
Andre Schulten: Okay. Good morning, Peter. Yes, the foreign exchange held was an interesting one because the $400 million reduction, as we said, was all related to Argentina. And we had assumed in the previous guidance that whatever exposure is generated in Argentina will have to be offset with pricing within the fiscal year in Argentina. So as the assumption changes and the business size reduces, the net outcome to the P&L is very limited. So yes, we saw a technical reduction because of the improving peso and the lower size or smaller size of the business. The net effect to the P&L will be very limited because of the underlying assumption we made from the very beginning that we would offset that impact of FX via pricing in the market.
SK-II in China is, I think bottoming out in terms of the shipment pattern. As we said, we are about 30% down in the quarter. It’s very encouraging to see some positive signs in terms of consumer sentiment as the team continues to innovate. The team drives very strong communication on the core benefit space of the SK-II proposition focusing on PITERA as a core ingredient and reason to believe. We are leveraging continue to leveraging the core consumer in China, very loyal to the brand, to amplify that messaging and it’s starting to resonate. So we see positive signs. It will take time until that translates into shipments though. I think retailers are sitting on a little bit of stock, and I think they will be hesitant to order until they see good signs of consumption increases.
So I would caution, I don’t expect this to be a fast recovery. This will take some time. Maybe last point on SK-II. Outside of China, the business is doing very well. We’re growing double digits in Japan, so I think the fundamental proposition is healthy. We just have to sort through this period in China. And again, we’re pointing, I think, in the right direction, but it will take time.
Operator: The next question comes from Nik Modi with RBC Capital Markets.
Nik Modi: Just a few, kind of housekeeping items. Andre, just wanted to confirm that the destocking in the U.S. was isolated to the consumer health business. And then the other 2 questions I had, what the Tide EVO, the technology that you’ve developed, would that be applicable to other brands and, other cleaning solutions within the P&G portfolio? And then just the final thing is, I think there’s a lot of the theme I’m hearing is broadly from speaking to investors along this call is the delta between obviously how P&G is performing and how the how everyone else is performing. And, you know, I think the competition that that you’re dealing with, I think, generally are struggling, for volume growth. So as you think about guidance, you know, how much have you contemplated a step up in competitive spend?
Right? I understand the fact that you guys have the momentum and you’re gaining share and the innovation is working. But I just wanted to get an understanding of kind of how measured your guidance is in relation to potential competitive response.
Andre Schulten: Destocking in the U.S. was broadly personal healthcare related. That was the biggest effect in, again, an okay season, but significantly weaker than last year and generally an industry wide recovery of the supply chain. So if you’re a retailer, you no longer see the need to hold safety stock. You’re convinced that when the season restarts and you need product, you can order and you get it. There was some of that also in the Tampax business, in the tampon business, as we have stabilized the supply chain there, similar dynamic. And there was a little bit of destocking in Hair Care, because we had up stocking in the base, but the majority of it, to keep it simple, is healthcare. Indeed, the EVO technology, so the fiber spinning technology, is a technology that can be applied in broader context.
We’ve applied it to facial cleaning in beauty, and there are many other applications. This is one of our platform technologies, if you think about it. The ability to spin chemistry into a fiber and avoid water as a carrying agent has so many efficiencies and advantages in the chemistry that we can put together and obviously in the logistics and cost side that, yes, we would want to apply it. But step by step, we got to make sure the EVO’s proposition works well, and that’s why we’re in test market, and we talked about this earlier. Competitive spending, if done the right way, would be a good thing. If we see competitors innovate, if we see competitors communicate in market constructive ways, drive incremental spend in marketing dollars, that’s a good thing.
So we hope to see that. On the promotion side, we don’t really see a dynamic that would point to anyone escalating promotion. We see stable depth of promotion in Europe, a little bit of increase in frequency. In the U.S., we are operating at about 85% business sold on deal, which 85 index versus pre-COVID level, sorry, that’s about 29% of business volume sold on deal. And we see competitors at similar ranges, so and it’s stable over a period of time. So again, if we see market constructive spend, great. Nobody seems to have an interest in heavy promotion at this point in time.
Operator: The next question comes from Kaumil Gajrawala with Jefferies.
