Anna Lizzul • BofA Securities

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CEO Sue Nabi responded that the company is not seeing a pullback from these key growth demographics. In fact, she noted that penetration continues to increase among Gen Z and teen males, the Hispanic community remains a strong consumer of fragrances, and the proportion of heavy users among Gen Z has never been higher. She did not comment on specific income tiers but emphasized the strength of these consumer groups.

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CEO Sue Nabi stated the Prestige market has normalized to a sustainable mid-single-digit growth rate with no new slowdown, noting the fragrance category remains structurally strong. CFO Laurent Mercier addressed Consumer Beauty, highlighting a two-speed market: the global color cosmetics category is in a mid-single-digit decline, while mass fragrance is growing at a high-single or double-digit rate. The company assumes the negative trend in color cosmetics will continue in fiscal '26.

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CEO Sue Nabi acknowledged that fierce competition between online and offline players is pressuring retailers. She highlighted Coty's long-standing partnership with Amazon and stated that e-commerce growth is 'stellar' in both divisions. Specifically, she noted that CoverGirl is growing faster than the e-com color cosmetics market and gaining share, while Prestige brands are also performing exceptionally well on the platform.

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CEO & Chairman Tarang Amin stated that a key strength of the Rhode brand is its highly curated and thoughtful product assortment, and the company plans to maintain this focused approach. While he noted a strong innovation pipeline and ongoing discussions about new ideas, he emphasized that any future launches would align with the brand's core identity and aesthetic, without committing to specific category expansions.

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Chairman and CEO Tarang Amin explained that the Rhode deal accelerates an already progressing relationship with Sephora, creating opportunities for the entire portfolio. He affirmed e.l.f. is a portfolio of brands but stated the immediate priorities are organic growth and the successful integration of Rhode, not further M&A.

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Chairman and CEO Tarang Amin responded that Q3 saw broad-based strength and significant share gains across all color cosmetics segments and in skincare. For the softer month of January, he noted that the lip subcategory was the strongest performer. He also mentioned that skincare, as a whole, continued to grow at a faster clip than cosmetics in January, and the company's strategy provides opportunities to grow share across all of its segments.

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CEO Tarang Amin reported broad-based strength across national retailers, digital, and international channels, noting that quarter-to-quarter channel performance can be noisy due to specific launch timings. CFO Mandy Fields confirmed the Dollar General assortment will feature the brand's best-selling 'Holy Grail' products, not a modified or lower-tier selection, to maintain brand integrity and accessibility.

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CEO Oran Holtzman outlined three main investment pillars: new brands (Brand 3 & 4), Oddity Labs, and technology. He explained that the company reinvests margin dollars above its 20% target into these future growth initiatives. He cited Spoiled Child as an example of ROI, noting a ~$25M investment has grown into a $200M revenue brand with healthy margins within three years.

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President and CEO Rick Dierker expressed confidence in growth, attributing it to a combination of category trends and a strong share gain story across key brands like TheraBreath and Hero. He confirmed that the company is protecting its marketing spend, targeting 11% of sales for the full year, with an acceleration in Q3 to between 12.5% and 13% to support brands and new innovation.

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Executive Richard Dierker stated that while the overall category growth outlook has been lowered to 1-1.5%, the company still expects to grow faster and gain share. He noted that, surprisingly, they are not yet seeing the significant consumer trade-down that might be expected in this environment, but believes Church & Dwight is well-positioned for when it occurs.

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CFO Rick Dierker acknowledged the guidance could be seen as conservative but highlighted that Q4 2023 was a high watermark for comparison. He cited several factors for the Q4 outlook, including rising commodity costs like ethylene, ongoing investments in the warehouse network, and increased trade and couponing support for new product launches. He also stated there were no notable changes in consumer purchasing patterns.

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Richard Dierker (CFO and Head of Business Operations) stated that the company does not expect negative pricing in the second half. Matthew Farrell (executive) confirmed that the company is adept at pivoting quickly on pack sizes to create different price points to meet changing consumer needs.

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CEO Linda Rendle clarified that the H2'26 improvement is predicated on factors Clorox controls, such as innovation and net revenue management, not an assumed consumer recovery. She defended strategic promotions but acknowledged Q4 execution could have been better. Regarding private label, Rendle stated there has been no material aggregate shift, though some channel dynamics are impacting the Glad business.

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CEO Linda Rendle stated that while aggregate promotions are normalized, the Glad category is seeing higher, deep-discounting activity from a competitor. She affirmed that consumers are still willing to pay for premium innovation that delivers superior value, citing the success of new premium products in ToiletWand, cat litter, Burt's Bees, and Hidden Valley. She noted that the Clorox brand itself, a premium portfolio, gained over 2 points of household penetration in the last 52 weeks.

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CEO Linda Rendle emphasized that promotion is just one part of the strategy, with a primary focus on value-added innovation. She described the consumer as steady but exhibiting value-seeking behaviors, such as trading up for innovation and buying both large and small sizes. She also noted that private label shares were down and Clorox grew share in 7 of its 8 categories.

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CEO Linda Rendle clarified that future growth will be primarily volume-based, driven by innovation and demand-creation activities, rather than significant list price increases. She confirmed that aggregate advertising and sales promotion spending is expected to remain around 11-11.5% of sales, with the U.S. business typically maintaining a higher spending rate than the international business.

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CEO Thibaut Mongon confirmed that Kenvue plans to increase brand investment in 2025, with a focus on ROI. He noted the company is in an 'investment mode' for the segment, and while progress on gross margins is currently masked by first-half price and trade investments, he expects margins to improve over time as consumption increases and these headwinds fade.

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CEO Thibaut Mongon acknowledged the recovery is taking longer than anticipated but highlighted positive signs, such as Neutrogena regaining its #1 U.S. face care position. He expressed confidence in returning the segment to growth in 2025, driven by a revamped team, a 40% larger innovation pipeline, and stronger influencer-led marketing campaigns, like the recent one with Tate McRae. He added that the company feels well-prepared for the Sun Care season.

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Executive Thibaut Mongon detailed external pressures on Skin Health, including a slow sun season and softness in Asia, but highlighted internal actions like strengthening the team with new hire Andrew Steimle and forming key partnerships with dermatologists. Andrew's role is to amplify existing 'green shoots' across the portfolio. Executive Paul Ruh clarified that the impact from anti-Japanese sentiment in China was lapped in Q3 and is not a material factor going forward.

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CFO Nelson Urdaneta stated that the guidance was adjusted to absorb the tariff impact without cutting key investments. He noted marketing spend was ~6% of sales in Q1, in line with prior year, and capital investments remain on track. CEO Michael Hsu added that the core strategy is to avoid reducing product quality or marketing, as they believe the tariff costs can be offset over time by re-optimizing the supply network.

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CEO Michael Hsu stated that after recent exits in markets like Nigeria and Bolivia, the company feels good about its current portfolio but will remain disciplined in its capital allocation. Regarding the Professional business, he acknowledged some softness in North American washrooms but expressed confidence in the plans for improvement and the overall global position.

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CEO Michael Hsu explained that the private label exit is a strategic move to focus capacity and technology on proprietary, branded innovation. He confirmed that the company's private label mix will shrink from approximately 4% of sales in 2023 to about 2% in 2025 following the exit of a large club diaper business, with further declines expected over time. This shift supports growth in higher-margin brands like Kleenex.

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