Good morning. Welcome to today's Colgate-Palmolive Third Quarter 2023 Earnings Conference Call. This call is being recorded and is being simulcast live at www.colgatepalmolive.com. Now, for opening remarks, I'd like to turn this call over to Chief Investor Relations Officer and Executive Vice President, M&A, John Faucher.

Thanks, Allison. Good morning, and welcome to our third quarter 2023 earnings release conference call. This is John Faucher. Today's conference call will include forward-looking statements. Actual results could differ materially from these statements. Please refer to the Q3 2023 earnings press release and related prepared materials, and our most recent filings with the SEC, including our 2022 annual report on Form 10-K and subsequent SEC filings, all available on Colgate's website, for a discussion of the factors that could cause actual results to differ materially from these statements. This conference call will also include a discussion of non-GAAP financial measures, including those identified in tables 4, 6, 7, 8, and 9 of the earnings press release. A full reconciliation to the corresponding GAAP financial measures is included in the Q3 2023 earnings press release and is available on Colgate's website. Joining me on the call this morning are Noel Wallace, Chairman, President and Chief Executive Officer, and Stan Sutula, Chief Financial Officer. Noel will provide you with some thoughts on our Q3 results and our 2023 outlook, and we will then open it up for Q&A. Noel?

Good morning, everyone. I want to give you my thoughts this morning on a very strong quarter of top and bottom-line growth, along with our raised 2023 outlook. As you can see in the materials we published this morning, our strategy is working, and the continued execution of the strategy leaves us well positioned as we look out to the future. We believe this will enable us to deliver balanced organic sales growth going forward, growing in all six divisions, all four of our categories, and with both volume and pricing growth. Organic volume performance improved in the quarter, which we believe puts us on our way towards a return to volume growth. And with the leverage from this balanced growth, along with the global productivity initiative, focused cost containment, and our funding the growth initiatives, we now have multiple points of leverage in our P&L. This should enable us to deliver consistent operating profit and earnings growth going forward. You can see this in our Q3 results as our gross margin was up both sequentially and year-on-year, driven by sales growth, and overheads were down, driven by logistics. This leverage allowed us to deliver another quarter of double-digit operating profit growth, along with a 23% increase in advertising. Some of our markets remain choppy, and the headwinds like foreign exchange and higher interest rates will continue to impact us, but we are leveraging the strength and the global reach of our brands while driving scale advantages through our science-based innovation, digital marketing, revenue growth management, and best-in-class on-the-ground execution. Our momentum leaves us very well positioned to deliver strong results with compounding top and bottom-line growth as we look to generate consistent long-term value creation for all of our stakeholders. And with that, I'll turn it over to the questions.

The first question will come from Peter Grom of UBS. Please go ahead.

Thanks, operator, and good morning, everyone. I hope you're doing well. So, Noel, I wanted to ask specifically on just kind of the return to balanced topline growth and kind of how you see that evolving over the next couple of quarters. I mean, excluding H&H, you probably already would've been there this quarter, as you highlighted in the prepared remarks. So, is this something that you kind of expect to achieve in the near term as you kind of exit 2023? Or is it going to be a dynamic that you would expect to kind of play out over the next several quarters? Thanks.

Yes, good morning, Peter. Thanks. Listen, we're obviously very pleased with the sequential improvement really throughout the entire P&L. Volume improved, and as you rightly pointed out, if you take the Hawley & Hazel business out, which, as you know, we're working through a price increase in that market, our volume inflected positive in the quarter. And we've seen that pretty consistent around particularly some of our emerging markets where we saw very positive volume. So, we’re pleased with the sequential improvements. The category dynamics are consistent with what we talked about, but they're not necessarily linear. I mean, we're seeing some puts and takes as we look around the regions and the different categories that we compete in. Obviously, taking more pricing across the pet food business as ag prices continue to stay high, but overall, the sequential improvement is playing out more or less as we anticipated. And as we move forward, our intention is to continue to drive balanced organic growth in the short and the long term.

The next question is from Andrea Teixeira of J.P. Morgan. Please go ahead.

Thank you. Good morning. Noel, you mentioned the full-year guidance, of course, was raised seven to eight, but it still implies a deceleration, of course, in the fourth quarter. And you called out in your prepared remarks, some of the puts and takes, in particular anniversarying the acquisition path, and then that would lead to a reduction in third-party manufacturing for private label. Can you break that down because it also implies, I'm assuming the base business a deceleration, and I understand that you're lapping a lot of the pricing, but just as we think about volumes and in particularly North America, there has been a sequential improvement and you called out as well that you are expecting promo and more activations in trade. So, anything you can share with us in terms of the progress you've made to regain volumes in North America as it relates to the full guidance for the fourth quarter? Thank you.

Sure. Good morning, Andrea. Let me take the North America piece of that question first, and then I'll highlight more strategically across the enterprise. So, North America is on pace with exactly what we talked about in the Q2 call, continued sequential improvement across the board, and we anticipate that they will see sequential improvement in their business as we move through the fourth quarter. A lot of that was getting the promotional cadence right, and we started to implement some of that promotional opportunity in the backend of the third quarter. Most of that will come through in the fourth quarter, and we're pleased with it. Obviously, the important part about North America is the oral care business, that inflected positive with high single-digit growth in oral care and positive volume growth on that business in the quarter as well, and we anticipate that will continue as we move through the balance of the year. So, North America overall trending as we expected. We're still not pleased with some of the scanner shares, but as we said, we'll get the promotional opportunity right as we move through the balance of the year. And importantly, our non-promoted volume, which reflects, I think, the strong advertising that we're putting into the North America business, continues to inflect positive. Strategically, around the world, we’re seeing volume improve across the world. Now, that is based on a lot of the geographies we've seen the pricing start to subside a bit as we're not taking more pricing in some of the markets. Really pleased seeing in markets where we took pricing early, like Latin America, where we've seen a very positive inflection in volume. Volume was up 5%. And if you look at Mexico and Brazil, specifically, Mexico was up mid-single digits. Brazil was up high single digits in volume. So, again, I think a reflection of the strong advertising innovation and the fact that over time, as pricing settles out in the market, you see the volumes come back and that's pretty consistent. Europe, likewise, a little improvement in volume. So, we're seeing exactly as we expected to see volumes start to sequentially improve, but it's not necessarily linear. And I want to leave that point that we'll watch that carefully as we move forward and we'll continue to implement our strategies of strong innovation across the core adjacencies and channels, and we'll see that play out as we move forward.

Our next question will come from Dara Mohsenian of Morgan Stanley. Please go ahead.

Good morning. Can you guys discuss market share performance in your key geographies and product categories in Q3, how you're performing on the share front? And given you've taken robust pricing, what are you seeing competitively in terms of the pricing and promotional environment and how might that play into your shares performance? Thanks.

Sure, thanks. Good morning, Dara. Sure. Overall, shares look good. We're up on a global basis. Let me just take toothpaste, which we track globally. Shares are up about 100 basis points. That's driven by strong performance in Europe, where we've seen record high shares, particularly behind the strategy of pushing our higher-end therapeutic brands on the premium side with Elmex and Meridol, as well as strong innovation on the Colgate side behind whitening. So, Europe delivering very strong. Africa and the Middle East, we're up in 10 of 11 markets and market shares there. So, continue to show nice performance. Pleasingly, Latin America, where we, as you know, have very high shares, shares are stable. We've seen shares growing in Brazil, slightly down in Mexico, but tracking up in recent periods. So, we're pleased with that. The US in the recent weeks, we started to see some of the promotional volumes come back as we very thoughtfully put promotions in the market. We're not just going to buy share back for the sake of buying it back. We're going to get a much healthier category as we move forward, and that's been very deliberate in how we thought about that business there. Africa, excuse me, Asia shares continue to be strong for us in China, so we're pleased with that. And likewise, as you go around the region, share is pretty good in India. We've done some really good work on our core business in the last couple of months, and we anticipate that's going to inflect positive for our core business. Overall, pleased with market shares. On the Hill’s business, likewise, very strong volume and value share growth in pet specialty and neighborhood pets, which is where we track. We're one of the fastest growing brands in both those retail environments. So, we’re pleased with obviously the strategy of bringing innovation and the increased advertising support we're bringing into the business. A little softness on our home care business in the US and that, again, attributes right back to the promotional cadence, and we're addressing that as we move through the fourth quarter.

Our next question will come from Filippo Falorni of Citi. Please go ahead.

Hey, good morning, everyone. So, clearly you returned to solid volume growth at Hill’s and solid results despite a more challenging category. So, Noel, can you maybe comment about how your business is positioned compared to the category weakness that we're seeing, which seems concentrated more on the wet side and the treat side. And then just thinking about Q4, how should we think about the progression of volume in Hill’s, considering you're going to lose some of the private label volumes both from a topline, but also from a margin standpoint. Thank you.

Yes, thanks, Filippo, and good morning. So, again, a great quarter for Hill’s, obviously with strong balanced pricing and volume growth in the quarter. That growth was quite pervasive across the world as we saw good growth in the US, as well as in some of our emerging markets, and likewise in Canada. The category has slowed a bit, as you've heard from others. That's, as you mentioned, a combination of sustained pricing in the category over the last four or five quarters and ag prices still remaining high. And so, it's not to be unexpected that the volume would slow a little bit. As you rightfully point out, you've seen some conversion from wet into dry. That lowers the volume. You've seen, obviously treats, which is more discretionary. And you'll recall, as we said in the Q2 call, we don't have a significant business at all in the treats segment. And likewise, I would say the non-science brands continue to perform quite well, but are not immune to the continued challenges that you highlighted in the category. But as I mentioned just a moment ago, we continue to grow share, and for us, this is a share gain. We only have 5% to 6% penetration in our largest market in the US. So, we have a lot of upside still, hence the reason why we continue to bring strong innovation in the market. Hence the reason why we continue to advertise very aggressively to drive household penetration. Likewise, we see opportunities continued in the prescription diet. Our studies show that only about 5% of pet owners are using a prescription product, whereas potentially up to 80% could be using it. So, that affords us an upside. We've talked about wet, obviously some conversion from wet into dry, but we have very low shares in the wet segment, which has been one of the historically growing segments. And we have plans, as we've talked about in the past, to continue to grow that. So, overall, we feel we're positioned well, but not immune to some of the softness that we've seen. But likewise, as I mentioned, we're very focused on driving share and ultimately expanding this business internationally. We'll watch the category carefully. We know our retailers are very focused on nutrition, and the science segment continues to perform well, and that's where we're putting our strategies in order to continue to drive penetration.

Our next question will come from Jason English of Goldman Sachs. Please go ahead.

Hey, morning folks. Thanks for slotting me in, and let's stay there. Let's stay on pet nutrition for a minute, but let's pivot to maybe the bottom line. Looks like gross margins for that segment down 360 bps this quarter, kind of bringing two-year down 900, very consistent with what we saw last quarter. And I get the mixed benefits of the acquisitions. I get the plant startup expense. I get the inflation, like these are all, obviously factors that have been contributing to the pressure, but I'm expecting all of them to sort of subside as you start to rotate the product out of the Red Collar assets, as you start to pivot some of your resources from starting up plants to attacking some of the efficiency, and hopefully as some of the input cost pressure subsides and price catches up. But we haven't yet seen progress yet. What is a reasonable expectation for us as we try to level set our own expectations? When should we start to see the benefits of all those dynamics come to fruition? And how much recovery should we be expecting?

Well, thanks for the question. Again, sequentially, things are moving in the right direction, and that's exactly what we've talked about in previous calls. And obviously, operating profit and EBIT continues to inflect where we want it. We continue to support the business with a disproportionate amount of our total increase in advertising, as we talked about. That is, again, strategic based on the low penetration and the real headroom that we continue to see in the category for us. As we see ag prices have somewhat flattened out, and that's good news for us, given a lot of the pricing that we've taken, we anticipate that will start to inflect more positive in our gross margins as we move forward. As you rightfully pointed out, we have a significant number of costs still moving through the P&L on getting our new facilities ramped up. The new wet facility will start to ramp up here in the fourth quarter. So, we'll have some costs associated with that, but ultimately, over the longer term, those costs will subside, and we feel good about where we are with the new Red Collar plants, getting those integrated in. So, overall, with pricing continuing to flow through, with ag prices holding and continuing to drive premiumization in the category, we feel good about the long-term trajectory of operating margins in this business.

Next question will come from Olivia Tong of Raymond James. Please go ahead.

Thanks. Good morning. Want to ask you a little bit more about North America, given that - a couple of things. First, the pricing accelerated on a two-year stack. If you could talk about the drivers of that. I assume promotion is a big piece of that. You mentioned advertising was up 25% in North America. Was that the highest amongst the divisions? And just if you could talk a little bit more about how you think about the ROI and the timing of the impact of that higher advertising. Thank you.

Yes, thanks and good morning, Olivia. Again, as I mentioned earlier, we're pleased with the progress. Again, this is a very deliberate and strategic execution of how we're trying to get the health of our brands and the health of our P&L in a better place. And as I mentioned in the second quarter call, we may have pulled back a little bit too far on some of the promotional cadence, but we're adjusting that, but adjusting it very prudently where we see the ROI and where we believe we can drive sustained volume and share opportunity moving forward. The 25% increase was not the highest. As I just mentioned, Hill’s continues to receive the disproportionate amount of the advertising increase. But North America, again, given the vibrancy of that market and the long-term strategic importance of that market, we will continue to invest for the long term. Great progress on the operating margins, as you saw move through that P&L. That is a reflection, again, I think of a much more prudent approach to pricing in the market and our promotional cadence. And we feel good about the sequential growth that we saw in the quarter and the sequential growth that we'll continue to see in the fourth quarter.

Our next question will come from Bryan Spillane of Bank of America. Please go ahead.

Thanks, operator. Good morning, everyone. Had a question on ad spend. I think year-to-date now we're over 12 - we’re running at a rate that's about a little over 12% as a percentage of sales. And so, given the increase that will end the year at, is this a good base to think of in terms of ad spend going forward, or would you consider taking up further? So, just trying to get a sense now if we've kind of rebased or if this is a new base in terms of ad spend.

Yes, thanks, Bryan. Listen, it's not as much as a percent of sales. It's really about how we're getting - what return on investment we're getting for that. And clearly, you've seen that play through the P&L on the strong organic in the business, and the continued growth on market shares around the world, particularly in those strategic categories that we're pushing more deliberately with the advertising. So, it's really about an ROI. And as we see that play back through the P&L, which we clearly are, we'll continue to invest. So, we’re really focused now, I'll say, on making sure we continue to optimize that investment. We put a lot more focus on programmatic buying, a lot more focus on personalization and getting content right. You heard E talk about when we were down in Florida with regards to the importance of advertising creative and content development. So, putting a lot more focus to get better ROI for what we're delivering. So, not necessarily a percent, but overall, we’re getting the performance through the P&L and through our businesses on the ground.

Our next question will come from Steve Powers of Deutsche Bank. Please go ahead.

Hey, great, thank you, and good morning. Maybe just two questions if I could. One is to follow up and round up the volume conversation. You talked about line of sight to improvements in North America and in Asia Pacific. The other area of softness in the quarter was Europe. Just love some perspective on sort of your path to volume improvement in that region. And then more broadly, stepping back, I guess this builds a little bit on the question Bryan was just asking, but you've had just tremendous success this year in driving underlying margin improvement, which has allowed the AMT reinvestment that we've seen year-to-date. I guess, as you are scenario modeling and starting to plan for the year ahead, how do you weigh the puts and takes on margins as you look ahead? And what's your level of confidence you can continue to drive that underlying margin improvement to enable the investment should the ROI exist?

Yes, good morning, Steve. Thanks. So, let me talk again a little bit on volumes. Globally, as you've heard from others, volumes in the categories tend to be down around 2% to 3%. This is a function, obviously, of the aggressive pricing that you've seen sequentially over the last three or four quarters. So, that continues to improve, and in my view, that will continue to improve as pricing moderates over the next couple of quarters and we lapse some of the aggressive pricing that we've had, certainly within our P&L. But from a category standpoint, there's going to be obviously a shift from more pricing-driven organic growth to more volume-driven organic growth. And it's very difficult to actually predict exactly the pace that's going to happen by geography, because we've taken pricing, and competitors taking pricing at different points in the year. So, over time, sequentially though, we see volume returning to a more normalized level, and we see pricing returning to a more normalized level. And that's more or less how it's playing out. Difficult to predict from geography to geography, from quarter to quarter. On the margin, obviously, a lot of focus, as you know, across the business. We've got a lot of levers in the P&L now to drive operating margins and gross margins. Why don't I let Stan talk a little bit about that. He's been very focused on driving that across most of our regions.

Thanks, Noel. Steve, it's a good question on the driving margin. So, if you take a look at what we've been able to do with the income statement this year, the top to bottom, the flexibility and the strength on all the different lines, have given us a lot more opportunity to drive margin, and it gives us flexibility, and that allows us to react to market conditions and anticipate, and more importantly, invest in those areas of the business that can deliver value. When we look at all those collectively, we think that leaves us well positioned for expanding margin over time. And while we're not going to give guidance for 2024 here today, we think that we are exiting the quarter with a stronger business model here than we entered the year.

Our next question will come from Lauren Lieberman of Barclays. Please go ahead.

Great. Thanks. Good morning. So, in the release, or in the prepared remarks, you talked about some of the improvement in oral care toothpaste, specifically in North America, but I was wondering if we could talk a bit about home and personal care. The advertising spend, like you said, up 25% this quarter. Just curious about how that is maybe being allocated across the different divisions within North America, how you're thinking about kind of innovation in home and personal care. I know, Noel, you'd mentioned some of the promotional cadence dynamics improving for home care in the fourth quarter, but I was just curious at efforts beyond that to kind of get those businesses more on the right track. Thanks.

Sure. Hey, Lauren, good morning. So, overall, the bulk of our North America business is oral care and it receives the bulk of that advertising increase. But pleasingly, we are supporting our home care and our personal care businesses, which is important. And clearly, as we get the promotional cadence back on those businesses, particularly here in the fourth quarter, we anticipate we'll see an improvement in shares. Now, again, we had a lot of unprofitable share historically where we were chasing share and buying share. And we have deliberately, as we see great health across our P&L and the geographies across the world, we have the opportunity to right-size that in the U.S. and get the shares much more profitable and get much more sustainable share growth moving forward. The intention is to continue to support all those businesses in the U.S. as we move forward. The other one is our skin health business in the U.S. is getting good levels of advertising. That continues to perform well. If you take our skin health business outside of China, that grew double digits in the quarter for us. So, we continue to see a nice growth on that business, and we'll continue to support that in the U.S. market as well.

Your next question will come from Chris Carey of Wells Fargo Securities. Please go ahead.

Hi, good morning, everyone. I couldn't help but notice the commentary around the currency impact carrying into 2024. At the same time, Noel, you were quite clear in your remarks today that Colgate has multiple levers to continue profit growth. This year, you're going to be doing high single-digit earnings. It would appear on low single-digit currency impact. You, I think, put up the best productivity number on a basis point impact that we've seen in almost 10 years despite raw materials which remain stubbornly high. Well, I know there's conversion and other costs in there as well. But just as you think about next year, and I know you're not giving guidance today, but does your ability to still deliver high single-digit earnings this year despite the currency headwind give you confidence on next year, especially because some of these drivers, like pricing, perhaps strong productivity and other levers at your disposal, remain available to you going into next year? So, thanks for any perspective on that.

Yes, Chris, thanks. Listen, I'm not going to get into 2024, start predicting where things will evolve, but clearly, foreign exchange moved more negative in the quarter for us. And you've seen that obviously the dollar strengthening as we move into the fourth quarter. But as Stan rightfully pointed out, I think the important aspect here is that the levers within our P&L are better than they've been in quite some time. We have different aspects playing to our advantage now. Obviously, we're getting the pricing executed in the market. We're starting to see volume flow through over the longer term. That will improve efficiencies in our plants. As we've gotten our forecast accuracy improved in the plants, that allows us to obviously run more of our funding the growth, which obviously came through very strong. We have the productivity moving through the P&L. so, we're really trying to pull on all levers to give us as much flexibility as possible. Foreign exchange is obviously a big unknown as we move forward, but you've seen us historically be able to price against this. We obviously have some inflationary pricing in the P&L in the third quarter based on where we see the Argentine peso go, where we see part of the Nigeria foreign exchange has been an issue as well, and likewise in Turkey. But over time, the important part is for us to drive flexibility through our P&L so we can adjust to market circumstances in the most efficient and prudent way.

Next question today is from Mark Astrachan of Stifel. Please go ahead.

Yes, thanks, and morning, everybody. So, yesterday, a competitor of yours, sort of in certain categories, talked about refocusing the business on product superiority. Obviously, a large US competitor has successfully pivoted the business towards that strategy, with success in recent years. Curious how you think about, or would assess the portion of your portfolio and innovation that meets the criteria. Have you adjusted R&D as a focus, the spending towards these product areas? And as sort of a second question, it might be related, might not be, the issues you bring up with the H&H business in China. Maybe I'm naïve in assuming that some of it could potentially relate to this, where you're taking prices up but not necessarily innovating. If that's wrong, obviously talk to that, but just kind of talk generally about what's going on there and how much is price, how much is other stuff. Thank you.

Yes, thanks, Mark. Let me come back to the core of our strategy, which was innovating across our core in adjacencies and channels. And all of it is underpinned by science-based innovation, and that has always distinguished our portfolio historically, and we have absolutely dialed that up in terms of how we focus our R&D efforts across the organization. Good examples of that is obviously the growth that we've had in the whitening segment. We have, in our view, some of the best efficacy-based products in the category. We're very pleased with the growth that we've seen in whitening at the premium side with our peroxide-based. We've obviously moved into pens, which is incremental consumption opportunity and the opportunity to drive regiment and a premiumization. We've moved into our chair distinct strategy, which is anchoring science-based whitening through the profession as well. So, science continues to play very importantly into our growth strategy. And you've seen that play out in oral care, certainly seen it play out in our pediatrician business, as well as very recently in skin health. And likewise, as we look at some of the innovations coming on in our home care business, we've seen some great innovation on concentrate, some great innovation on tablets in Europe. So, we continue to use science as a way to drive differentiation and certainly drive our premiumization. Specifically on the Hawley & Hazel business, as I mentioned in the second quarter, we took pricing. That has taken longer to actually get executed in the market, given the multiple levels of our go-to-market strategy on the Hawley and Hazel business. And obviously, you've seen a slowdown in the category in China, which has also come on top of that. But the good news, as we exited the third quarter, we saw the Hawley & Hazel business start to inflect positively, and we continue to see that as we speak. So, we’re not completely out of where we want it to be, but everything is moving in the right direction. Conversely, the innovation behind Hawley & Hazel is very strong. Once we have that pricing executed, we'll come in with a good first half plan of innovation, and that will be science-based innovation, as I mentioned. The parallel to that is obviously the great success we've had in China with the Colgate business. The Colgate business continues to perform very, very well, growing share in e-commerce, the fastest growing channels, and that is driven behind premium innovation with real science-based structures to that.

Our next question will come from Rob Ottenstein of Evercore. Please go ahead.

Great, thank you very much. I'm wondering if we can drill in on the US and maybe talk a little bit about what's going on in the non-track channels, kind of which channels are leading the growth and why do you continue - do you expect that to continue in the future, having a pretty big gap between the scanner results and the non-track? And then if you could put that also in the context of how you see the US consumer and the health of the US consumer developing over the next couple of quarters and any pivots that you may do or adjustments to potentially a weakening consumer outlook. Thank you.

Yes. Hey, good morning, Rob. Thanks. Clearly, in the results, and you've seen the scanner data, which continues to be soft, and as I mentioned, we're addressing that more sharply in the fourth quarter. Our non-track business continues to perform exceptionally well, and that has been a strategy that we've talked about for quite some time. Those are some of the faster growing channels. We continue to invest in those channels. We continue to grow share in those channels. And overall, that's certainly leading to a broader-based healthier business for us moving forward. You talk Club. You talk some of the discount channels. You talk some of the e-commerce channels as well. So, overall, we think we’re well positioned in the US to continue to leverage where the growth is coming from. The consumer continues to be resilient. I would say the promotional environment is constructive right now. We've seen a little bit of pickup in some categories, but overall, still below pre-COVID levels. And as we continue to be, as I said, very thoughtfully prudent on how we elevate our cadence of promotions moving forward, we feel good about our ability to continue to drive non-track. Now, I'll remind you that non-tracked are about 14% of the total company sales. And so, while very important for us in the US and the team there under Jesper's leadership is laser focused on addressing that, we're going to get that back to a healthier share as we move forward.

Our last question today is a follow-up from Bryan Spillane of Bank of America. Please go ahead.

Hi. Thanks again, Operator. Hey Stan, just a question around inflation. I know in the press release or the prepared remarks, you talked about - or I guess the press release, talked about still several hundred million dollars of inflation expected for this year. Can you just give us some context of, is it the same moderating? Like, as we're exiting the year, just how we should be thinking about the trend on inflation? I know you called out inflation in pet. So, just trying to get a sense of whether or not it's - how it's trending. Is it trending better or worse than kind of where we were coming out of 2Q?

Yes, sure, Bryan. So, as we said, our view on raw materials in total remains consistent with prior quarters. And we still do see several hundred million of gross cost inflation raw materials for 2023. But while the overall totals in line, there have been some shifts underneath that. First, agriculture has not eased. In some cases, it’s actually gone up. That affects primarily our Hill’s business. Offsetting that, some commodities such as resins and oils have actually softened a bit. But when we look in total, that basket is roughly still in line. And while it hasn't gotten worse, it hasn't gotten a lot better. The one we continue to watch carefully is obviously energy with all the volatility in that market. And then also just keep in mind, some of our raw materials are not pure commodities, but specialty, flavors, fragrances. Those tend to have less volatility. But I think if you pull back, our teams have done a great job driving productivity to mitigate some of that inflation. And you saw in our funding the growth, this has really helped us balance the margin. You combine that with RGM, and it's resulted in that margin expansion. So, if I got to pull that back, while that's been relatively steady in total, the pieces moving around underneath, that has - our gross profit in total for the company has gone up 140 basis points year-to-year. And that's a combination of that pricing in RGM has been able to more than compensate for the raw materials going through. So, as we look at that heading into the last quarter, we haven't actually seen a lot of change in the commodity basket, so we expect that to continue through the end of the year.

Yes, Bryan, I’d just reiterate, again, that 140, you add another 50 basis points for private label, and if you add logistics in there, which others include in cost of goods, that adds roughly another 130. So, north of 300 basis points of margin improvement in the quarter. And that's terrific in terms of how we saw things ultimately playing out. And as we see hopefully a more benign cost environment over the medium term and our ability to hold pricing and continue to innovate at the high end, we feel pretty good about the continued ability to sustain high margins in the categories in which we compete. So, thanks everyone for joining the call today. Let me just close up by saying we really appreciate your interest in the company. We hope you agree that we have the strategies and the plans in place to deliver consistent, compounded profitable growth to drive value for all of our shareholders. And I would be remiss not to thank all the Colgate folks around the world who have delivered a very strong quarter for us in the third quarter of 2023. So, thanks everyone. We'll talk to you in January.

Conference has now concluded. Thank you for attending today's call. You may now disconnect.