Dara Mohsenian

Dara Warren Mohsenian inquired about the 40% year-to-date growth in Oddity's international markets, seeking details on key geographic drivers and the strategy for further scaling in 2026, including country penetration and SpoiledChild expansion. Mohsenian also asked about Methodic's potential to attract new customers to the Oddity franchise and its cross-selling opportunities.

Answer

Oran Holtzman, Co-founder and CEO, ODDITY, explained that 83% of revenue still comes from the U.S., with international markets contributing 17% despite 40% growth. He listed existing and new testing countries, noting most growth came from established markets. For Methodic, Holtzman stated it is expected to attract both existing Il Makiage/SpoiledChild users and new customers through user acquisition efforts. Lindsay Drucker Mann, CFO, ODDITY, clarified that the question on Methodic was about the new brand.

Dara Mohsenian asked about the 40% year-to-date growth in international markets, inquiring about key geographic drivers and the strategy for further scaling in 2026, including country penetration and SpoiledChild expansion. He also asked about METHODIQ's potential to attract new customers to the ODDITY franchise and drive cross-selling.

Answer

Oran Holtzman, Co-founder and CEO of ODDITY, explained that 83% of revenue still comes from the U.S., with international growth primarily from existing markets like the U.K. and Australia, alongside tests in new geographies such as Italy and Japan. He confirmed METHODIQ is expected to attract both new users and cross-sell to existing Il Makiage and SpoiledChild customers.

Dara Mohsenian of Morgan Stanley asked for a long-term overview of the Brand 3 consumer experience, including products, monitoring, and potential revenue streams beyond product sales. He also inquired about key learnings from the most recent three months of testing.

Answer

CEO Oran Holtzman described Brand 3 as a telehealth platform starting with dermatology, offering medical-grade OTC and Rx products. The experience includes a mobile app for coaching and compliance to address a key category issue. He noted that while three months is a short testing cycle, the company has made substantial progress over the past year in matching the right patient with the right customized treatment, which is critical for user satisfaction.

Dara Mohsenian from Morgan Stanley asked for clarification on whether the increased international emphasis is focused on scaling existing markets or entering new ones. He also inquired about M&A priorities and the strategic focus for potential acquisitions.

Answer

CEO Oran Holtzman stated the international strategy involves both scaling existing markets (like the U.K. and Germany) and leveraging large-scale tests in new markets (like France, Italy, and Spain). Regarding M&A, he said the focus is on acquiring capabilities ODDITY doesn't have, particularly in biotech and AI, rather than just buying brands they could build themselves. Global CFO Lindsay Drucker Mann added that this diversification across markets and brands provides flexibility.

Dara Mohsenian from Morgan Stanley requested more specifics on Brand 3, including the consumer needs and addressable market it targets, and asked for an update on the commercialization timeline for innovations from Oddity Labs in 2025.

Answer

CEO Oran Holtzman stated that Brand 3 will initially target conditions like eczema and hyperpigmentation, with extensive trials showing superior product performance. Regarding Oddity Labs, he noted that while it's still early, new molecules from the lab will be incorporated into Brand 3 and Brand 4 products. The labs are actively working on over 10 long-term programs and are scaling the team toward 100 scientists.

Dara Mohsenian inquired about the specifics of the strong start to Q4 and requested an update on the launch timeline, revenue contribution, and upfront spending for Brands 3 and 4.

Answer

Global CFO Lindsay Drucker Mann confirmed Q4's strong start continues Q3's momentum, with record cohort performance, high repeat rates, and increased Average Order Value (AOV). Co-Founder and CEO Oran Holtzman stated Brands 3 and 4 are on track for a H2 2025 launch, leveraging the existing user base. He detailed progress on Brand 3's telehealth infrastructure and vision technology. Lindsay Drucker Mann reiterated that while these new brands will incur material costs in 2025, they are not expected to contribute materially to revenue next year.

Dara Mohsenian asked about the drivers behind Monster Beverage's strong EMEA revenue growth and accelerated market share gains in Western Europe, comparing it to U.S. category acceleration.

Answer

Hilton Schlosberg, CEO, explained that EMEA category growth is driven by a strong value proposition, brand image, functionality, new consumers, and diverse product offerings. He noted Monster's share gains resulted from outperforming the category with innovation and existing SKUs, particularly the Ultra brand and Lando Norris Zero Sugar.

Dara Mohsenian asked about the drivers behind the strong EMEA revenue growth and robust retail takeaway in Western Europe, comparing it to U.S. category acceleration, and inquired about the factors contributing to Monster's accelerated market share gains in EMEA.

Answer

Hilton Schlosberg (CEO) explained that EMEA category growth is driven by a strong value proposition, brand image, functionality, and new consumers from other beverage categories. He noted Monster's share gains resulted from outperforming the category with growth from both innovation and existing SKUs, particularly the Ultra brand family and the successful launch of Lando Norris Zero Sugar.

Dara Mohsenian inquired about the sustainability of Monster's strong Q2 gross margin performance, the potential future impact from tariffs and aluminum costs, and whether the planned Q4 U.S. price increase would be broad or selective.

Answer

Hilton Schlosberg, Vice Chairman & CEO, acknowledged that while the company is focused on gross margins, modest pressure from tariffs is expected in Q3. He stated the planned Q4 price increase, which will be selective by package and channel, is expected to mitigate some of that pressure. Schlosberg also noted the company's hedging strategy partially insulates it from aluminum price volatility, though less so for the Midwest premium affected by tariffs.

Dara Mohsenian of Morgan Stanley asked for perspective on whether macroeconomic pressures are impacting the energy drink category and questioned the drivers behind the category's recent rebound in the U.S.

Answer

CEO Rodney Sacks emphasized that consumer demand, reflected in Nielsen data and depletions, is a more accurate health indicator and remains strong, making the company optimistic for the year. Executive Hilton Schlosberg supported this by citing strong energy sales growth from bottlers like CCP (up 12%) and Hellenic (up 26%), indicating robust underlying trends despite shipment timing issues.

Dara Mohsenian inquired about Monster's potential U.S. market share performance going forward, especially in light of recent compression, and how the 2025 innovation pipeline and shelf space gains could play a role.

Answer

Executives Hilton Schlosberg and Rodney Sacks responded. Schlosberg confirmed low single-digit shelf space gains and noted that while the U.S. category is massive, positive trends persist. Sacks highlighted that 2025 innovation, including Ultra Blue Hawaiian and a new Bang Energy product, had a strong start and is expected to be a positive driver for the year.

Dara Warren Mohsenian sought clarity on why the full-year top-line guidance remained unchanged despite a strong 3% organic sales growth in fiscal Q1, asking if it reflected conservatism. He also questioned the sustainability of recent solid share gains in mainland China over the next few years and the short-term drivers.

Answer

President and CEO Stéphane de La Faverie explained that while China showed strong double-digit growth and market share gains across brands and channels, the full-year guidance considers the balance between the first half (lapping lower numbers in China and travel retail) and the second half (anniversarying recovery). He cited ongoing macro volatility, trade policies, and subdued consumer confidence in some regions. EVP and CFO Akhil Shrivastava added that the guidance was thoughtful for long-term investment, acknowledging continued macro challenges and the 2-3% industry outlook. He reiterated the front-half/back-half cadence due to prior-year comparisons in travel retail and China.

Dara Warren Mohsenian sought clarity on why the full-year top-line guidance remained unchanged despite a strong Q1, and inquired about the sustainability of recent share gains in mainland China over the longer term.

Answer

President and CEO Stéphane de La Faverie attributed the unchanged guidance to early fiscal year timing, ongoing macro volatility, and tougher comparisons in the second half, particularly in China and travel retail. He confirmed strong, broad-based share gains in China. Executive Vice President and CFO Akhil Shrivastava reiterated the thoughtful nature of the initial guidance, emphasizing the continued challenging macro environment and the company's focus on sustainable, long-term growth.

Dara Mohsenian from Morgan Stanley inquired about the progress of simplifying the organizational structure under the 'Beauty Reimagine' plan, the remaining changes for fiscal 2026, and how the organization is culturally adapting to the significant transformation.

Answer

President and CEO Stéphane de La Faverie explained that the new leadership team is nearly complete with a Head of R&D to be named shortly. He confirmed the seven global regions have been consolidated into four. De La Faverie emphasized that as of July 1, P&L responsibility shifted to the regions, fostering better collaboration and speed, which has already resulted in market share gains in the U.S., China, and Japan. He expressed satisfaction with the pace of change and the organization's adoption of a culture centered on ambition and accountability.

Dara Mohsenian of Morgan Stanley asked for an outlook on market share performance into fiscal 2026, the key building blocks for consistent gains, and the potential for progress in laggard areas like the U.K. and Travel Retail.

Answer

President and CEO Stephane de la Faverie detailed significant market share gains in the U.S. and China, driven by key brands like Clinique, Estee Lauder, and La Mer. He acknowledged that work is needed in the U.K. and some emerging markets but plans to apply learnings from successful regions. He also noted that the company is moving quickly into new channels like Amazon and TikTok Shop to recapture share and that a new leadership team is focused on driving retail sales in Travel Retail.

Dara Mohsenian asked about the key building blocks for improving market share performance in fiscal '26, particularly in laggard regions like the U.K. and emerging markets.

Answer

President & CEO Stephane de la Faverie detailed strong share gains in the U.S. and China, driven by brands like Clinique, La Mer, and The Ordinary. He explained they are applying learnings from successes in Japan and Korea to other markets. While acknowledging weakness in the U.K., he noted they are laser-focused on a turnaround. He also highlighted the strategic expansion into new channels like Amazon and TikTok as a key driver for recapturing market share.

Dara Mohsenian inquired about the softer cultural changes required to support the organizational restructuring and the importance of bringing in external talent or consultants to implement the new plans.

Answer

CEO Stephane de la Faverie stressed that cultural change towards speed and agility is critical and that the company is bringing in external partners to help execute the PRGP transformation. CFO Akhil Shrivastava added that the new culture is being built on three pillars: employee ownership and accountability, consumer-centricity in all functions, and a focus on long-term value creation.

Dara Mohsenian asked about the company's internal response to worsening market conditions, questioning potential productivity gains beyond the PRGP and the level of reinvestment needed for a top-line recovery.

Answer

EVP and CFO Tracey Travis confirmed that management is evaluating additional cost-saving actions beyond the PRGP to offset volume pressures. She noted that investments in consumer-facing areas were protected in Q1 and will be again in Q2. President and CEO Fabrizio Freda added that the focus is also on improving the quality and ROI of investments through precision marketing and accelerating expansion into high-growth channels.

Dara Mohsenian asked for an update on incremental opportunities and potential cost synergy upside for JDE Peet's after detailed work, and an update on the tariff situation for Keurig Dr Pepper's base business, including pricing management for coffee and CSDs amidst volatility.

Answer

CEO Tim Cofer expressed improved confidence in both revenue and cost synergies, highlighting brewer know-how and the 'Reignite the Amazing' strategy. Chief Transformation Officer Roger Johnson added that procurement, manufacturing footprint, routes to market, and IT systems offer clear opportunities. Tim Cofer clarified that tariffs are unique to Keurig Dr Pepper, and cost pressure will continue into Q4 and H1 next year, but no 2026 guidance was provided.

Dara Mohsenian asked for an update on incremental opportunities and cost synergies for JDE Peet's following detailed work, and sought clarification on the tariff situation, 2026/2027 guidance, and pricing management for both coffee and CSDs within the base KDP business.

Answer

CEO Tim Cofer expressed improved confidence in JDE Peet's synergies, particularly in brewer know-how and expanding Keurig legacy brands across formats. Chief Transformation Officer and Supply Chain Officer Roger Johnson added that detailed plans for procurement, manufacturing, logistics, and SG&A/IT synergies are being developed, with further clean room analysis pending. Tim Cofer clarified that tariff pressure is a unique, non-global impact for KDP, expected to mount in Q4 and carry into early next year, but no 2026 guidance was provided.

Dara Mohsenian inquired about recent marketing changes, including the appointment of a new CMO and a heightened digital focus, asking to understand the strategy, its expected impact on ROI, and if results are yet visible.

Answer

CEO Tim Cofer explained that the marketing transformation is centered on data, technology, and digital to enable more precise targeting and effective content. He expects the impact to become visible in H2 2025, citing the upcoming Dr Pepper 'Fansville' campaign as an example of more personalized digital engagement. The ultimate goal, he stated, is to achieve higher ROIs and more impactful marketing spend.

Dara Mohsenian asked for clarification on Keurig Dr Pepper's confidence in its fiscal 2025 guidance given numerous moving parts, requested more detail on tariff exposure and potential offsets, and questioned the sustainability of the strong growth drivers in U.S. Refreshment Beverages.

Answer

Chief Financial Officer Sudhanshu Priyadarshi affirmed the company's high single-digit constant currency EPS growth guidance, noting that offsets like cost savings, potential pricing actions, and Q1's overperformance provide flexibility against tariff and coffee segment pressures. Chief Executive Officer Timothy Cofer added that U.S. Refreshment Beverage growth is robust, driven by strong performance and innovation in CSDs like Dr Pepper, energy drinks like GHOST, and hydration with Electrolit, with growth primarily coming from volume and mix.

Dara Mohsenian inquired about the durability of the softness in the coffee category, KDP's ability to offset industry headwinds with its own initiatives, and the outlook for coffee segment profitability after planned price increases.

Answer

CEO Timothy Cofer acknowledged the sluggish at-home coffee category but noted that KDP is outperforming within the single-serve sub-segment and is planning prudently for 2025. CFO Sudhanshu Priyadarshi added that for 2025, the company will manage for operating profit dollar growth, not margin percentage, by offsetting inflation with pricing and productivity, with a multiyear goal to rebuild segment margins.

Dara Mohsenian inquired about the internal reception of P&G's recently announced restructuring and its impact on the company's competitiveness within the challenging broader CPG industry landscape.

Answer

Andre Schulten, CFO of Procter & Gamble, stated that the restructuring execution is on track, with the organization embracing the mission to become more agile. He detailed progress on portfolio streamlining, supply chain optimization, and the reduction of up to 7,000 non-manufacturing roles to create faster, consumer-centric brand teams, which will fuel innovation and strengthen the portfolio long-term.

Dara Mohsenian asked about the internal reception of the recently announced restructuring and its impact on Procter & Gamble's competitiveness amidst a challenging CPG top-line environment.

Answer

CFO Andre Schulten confirmed the restructuring is on track, with the organization embracing the mission to create a more agile and faster-executing structure. He detailed progress on portfolio discipline, supply chain flexibility, and the reduction of up to 7,000 non-manufacturing roles, emphasizing short-term cost savings to fuel innovation and long-term benefits for a strengthened portfolio and organization.

Dara Mohsenian of Morgan Stanley asked how the new restructuring will enhance organizational capabilities, particularly with advancements in technology, and inquired about the timing of the CEO transition.

Answer

President, CEO & Chairman Jon Moeller stated the CEO transition timing is appropriate given the company's strategic and executional strength. He explained the restructuring aims to enhance capabilities by breaking down functional silos, leveraging technology for seamless data access, and empowering smaller, integrated teams to improve decision speed and employee value.

Dara Mohsenian from Morgan Stanley asked about Procter & Gamble's positioning for potential consumer trade-down compared to past cycles and whether private label share has gained in any specific geographies or categories.

Answer

Executive Andre Schulten asserted that P&G is well-positioned due to its broad portfolio across all value tiers and price points, citing innovation in both premium (Tide, Swaddlers) and value (Gain, Luvs) brands. He noted that private label shares continue to trend down in both the U.S. and Europe, indicating that P&G's superior performance proposition remains valuable to consumers even in uncertain times.

Dara Mohsenian of Morgan Stanley inquired about the organic sales growth outlook for the second half of fiscal 2025, asking for an update on the performance split between the core 85% of the business and the lagging 15%, and the sustainability of growth in key markets like the U.S. and Europe.

Answer

Andre Schulten, an executive, stated that the core 85% of the business continues to grow around 4%, while the lagging 15% has improved, driven by a significant recovery in Greater China (from -15% in Q1 to -3% in Q2). He noted the base case is for continued strength in the core business and ongoing recovery in the lagging markets, which could lead to the midpoint of guidance, though weakening in core markets or a reversal in China would push results to the lower end.

Dara Mohsenian asked for details on the U.S. market's sustained category growth potential in a moderate pricing environment and whether the base case for the lagging 15% of the business is a sharp inflection due to easier comparisons.

Answer

Executive Andre Schulten projected sustained U.S. market growth of 3-4%, driven by volume, and highlighted a $5 billion opportunity from serving diverse consumer groups and increasing penetration in categories like fabric enhancers. For the lagging 15%, he stated the base assumption is simply annualizing the negative effects, which will aid stabilization, while emphasizing proactive operational improvements.

Dara Mohsenian asked about PepsiCo's long-term top-line growth strategy, particularly looking out to 2026 and beyond. He sought to understand which initiatives, such as heightened innovation, portfolio reshaping, and focus on permissible/functional benefits, are expected to be most impactful in accelerating revenue growth and when material progress towards the long-term algorithm might be visible.

Answer

Chairman and CEO Ramon Laguarta affirmed a clear line of sight to returning to the long-term algorithm throughout 2026, driven by "brilliant at the basics" execution (price points, service levels, customer plans). He highlighted major brand interventions, including global relaunches of Lay's, Tostitos, and Gatorade, and acceleration of growing platforms like Away from Home, permissible snacks, and functional hydration. Laguarta detailed significant innovation in protein (Muscle Milk, Starbucks, Doritos, Quaker, Propel for GLP-1 consumers), no artificials (Lay's, Tostitos, Naked platform), higher fiber products, and new oils (avocado, olive). He also mentioned strategic acquisitions like Poppi, Siete, Sabra, and Alani Nu as key drivers for portfolio acceleration.

Dara Mohsenian inquired about the most impactful areas for accelerating revenue growth in 2026 and beyond, specifically asking when material progress would be seen and if there's a line of sight to returning to PepsiCo's long-term top-line growth algorithm within 2026, considering efforts like innovation, portfolio reshaping, and price pack architecture.

Answer

Chairman and CEO Ramon Laguarta affirmed a clear line of sight to returning to the long-term algorithm throughout 2026. He highlighted key drivers: 'brilliant at the basics' (service levels, execution), major interventions in core brands (Lay's, Tostitos, Gatorade relaunches), accelerating growth platforms (Away from Home, permissible snacks, functional hydration), critical innovation in new platforms (protein, no artificials, fiber, new oils), and strategic acquisitions (Poppi, Siete, Sabra, Alani Nu) for portfolio reshaping.

Dara Mohsenian of Morgan Stanley questioned the drivers behind the expected acceleration in full-year earnings for the second half and inquired about the balance between letting savings flow to the bottom line versus reinvesting in the business.

Answer

EVP and CFO Jamie Caulfield expressed high confidence in hitting second-half productivity targets, noting that actions have been identified and are being executed. Chairman and CEO Ramon Laguarta detailed reinvestment areas, including technology, surgical value offerings, and expanding away-from-home capabilities, while maintaining that current high levels of advertising and marketing (A&M) are sufficient.

Dara Mohsenian followed up on Frito-Lay North America's volume weakness, asking if a more substantial or dramatic step-up in reinvestment, either in pricing or marketing, might be necessary to turn around trends in the current consumer environment.

Answer

EVP and CFO Jamie Caulfield stated that while they are providing value to consumers, they will not damage the long-term health of the franchise. He emphasized driving productivity to fund investments and aggressively managing costs. CEO Ramon Laguarta added that the focus is on intelligent reinvestment for the best return, portfolio transformation into new subsegments, and improving operational excellence, which he views as equally critical pillars for driving performance.

Dara Mohsenian of Morgan Stanley asked for specifics on how PepsiCo is managing its North American Frito-Lay and beverage businesses differently in 2025 amid a muted consumer environment, and requested an update on performance in Mexico.

Answer

CEO Ramon Laguarta outlined a dual strategy for North America. For beverages, the focus is on accelerating top-line growth via innovation in zero-sugar and functional drinks while continuing to expand margins. For snacks, the priority is stabilizing the category through better price-pack execution, innovation in 'positive choices,' and a significant strategic push into the Away-From-Home channel, leveraging recent acquisitions.

Dara Mohsenian requested an assessment of the payback from recent actions in Frito-Lay and asked for more tangible detail on future plans, particularly what 'providing value to consumers' entails.

Answer

Chairman and CEO Ramon Laguarta outlined a multi-pronged strategy, noting positive returns from summer investments in Lay's. He detailed plans to extend value-focused activities, such as bonus packs offering 20% more product, to Tostitos and Doritos for the football season. He also highlighted long-term portfolio evolution through permissible and multicultural brands and expansion into new channels.

Dara Mohsenian asked about the impact of non-macro factors like health and wellness trends, RTDs, cannabis substitution, and lower consumption by younger consumers on beer depletion weakness. He also inquired about Constellation Brands' strategic adjustments and productivity opportunities in response to the tougher top-line environment.

Answer

CEO Bill Newlands reiterated that structural elements are relatively minor compared to cyclical factors, noting cannabis could be a future impact due to constrained spending. He highlighted the success of Corona Sunbrew in targeting younger consumers and affirmed the company's commitment to increasing marketing spend, rather than pulling back, to invest in long-term success and continue gaining market share.

Dara Mohsenian questioned the extent to which recent beer depletion weakness is influenced by secular factors like health and wellness trends, RTDs, cannabis substitution, and lower consumption from younger consumers, beyond macro components. He also asked about strategic tweaks and productivity opportunities to drive top-line growth in a tougher environment.

Answer

CEO Bill Newlands reiterated that structural elements are relatively minor compared to cyclical factors, with little evidence of significant impact from cannabis or RTDs currently. He emphasized continued investment in marketing (e.g., Corona MLB, Modelo NFL) and innovation like Corona Sunbrew targeting Gen Z, to ensure long-term success and market share gains, rather than pulling back.

Dara Mohsenian from Morgan Stanley questioned Constellation Brands' confidence in its unchanged full-year beer revenue and margin guidance, considering recent industry weakness and the impact of higher aluminum tariffs.

Answer

President & CEO Bill Newlands affirmed that Q1 was in line with expectations and that achieving guidance requires sequential improvement against easier comps, not a major consumer shift. EVP & CFO Garth Hankinson added that while new tariffs create a ~$20 million headwind, the company can still deliver margins consistent with its prior guidance.

Dara Mohsenian questioned Constellation Brands' confidence in its full-year beer revenue and margin guidance, citing recent industry weakness, depletion trends, and the impact of new aluminum tariffs.

Answer

CEO Bill Newlands stated the quarter performed as expected against a strong prior-year comparison and that upcoming comps are easier. CFO Garth Hankinson affirmed guidance, noting that while a new $20 million tariff impact is a headwind, the company can still deliver on its annual margin targets.

Dara Mohsenian asked for a breakdown of the significant revision to long-term beer sales growth, seeking to understand the contribution from the external environment, durable category pressures, and Constellation's market share opportunity.

Answer

CEO William Newlands attributed the revision primarily to a near-term issue with consumer sentiment, the duration of which is difficult to predict. He stressed that it is not a brand health issue, citing Pacifico's 16% growth as a sign of underlying strength. The guidance reflects conservatism due to the uncertainty of how long socioeconomic challenges will persist.

Dara Mohsenian asked about the drivers of the recent softness in beer depletions, questioning whether it stems from short-term consumer weakness or longer-term structural issues like health trends, and how this might affect long-term revenue guidance.

Answer

CEO William Newlands stated that the company views the current softness as a result of prolonged near-term macroeconomic pressures, such as unemployment and value-seeking behavior, rather than structural or long-term issues. He emphasized that beverage alcohol's share of the consumer's total spending basket has remained consistent, suggesting a cyclical rather than structural headwind.

Dara Mohsenian inquired about the softer-than-usual beer depletion results in Q2, asking for a postmortem on the key drivers, such as macroeconomic factors versus other pressures, and requested context on the recent pickup in September scanner data.

Answer

CEO William Newlands attributed the Q2 softness to a higher unemployment rate in the Hispanic market and a typical consumer pullback during a close federal election cycle. He emphasized that consumer demand and buy rates remain strong and characterized the issue as near-term, not a long-term structural change. Newlands expressed optimism for the second half, citing recent improvements in scanner data and potential economic stimulus from Fed rate cuts.

Dara Mohsenian of Morgan Stanley sought clarification on the first-half sales growth forecast of over 9%, asking if that holds true excluding the Rhode acquisition. He also asked about Rhode's expected EPS accretion and near-term investment plans.

Answer

Senior VP & CFO Mandy Fields confirmed the Rhode acquisition contributes to the first-half growth forecast but did not provide an ex-Rhode figure, emphasizing the underlying e.l.f. business remains strong with continued market share gains. She reiterated that the Rhode acquisition is expected to be accretive for the full year, even with planned investments to support its growth, such as the successful launch of its 'lemon teenie' lip peptide.

Dara Mohsenian of Morgan Stanley requested more detail on Q1 revenue trends, U.S. growth potential relative to scanner data, and the key capabilities e.l.f. and Rhode bring to each other.

Answer

SVP & CFO Mandy Fields noted that while Q1 consumption is strong, tariff impacts will begin to affect profitability during the quarter. Chairman and CEO Tarang Amin detailed that e.l.f. will provide Rhode with retail expansion expertise, marketing investment to boost awareness, and team-building support. In return, e.l.f. acquires a high-growth brand and deepens its strategic relationship with Sephora.

Dara Mohsenian asked how e.l.f. plans to adjust its strategies in the current softer environment and about the level of marketing spend necessary to manage the business.

Answer

Chairman and CEO Tarang Amin responded that the company is not making a big strategic shift, but rather tweaking its approach to better balance marketing support between new innovation and core franchises, like the 'eyes, lips, face fandom' campaign. He noted that many new items build on existing successful franchises like Power Grip and Halo Glow. Amin added that the company decided against increasing marketing spend, feeling the current ROIs are strong and that it wasn't prudent in a more cautious consumer environment.

Dara Mohsenian asked about the timing and potential brand equity risk of entering Dollar General, and for perspective on the recent weakness in the cosmetics category and its impact on guidance.

Answer

CEO Tarang Amin explained the Dollar General partnership was planned over a year in advance and that the brand's elasticity allows it to play in both value channels and prestige retailers like Sephora Mexico simultaneously. He remains bullish on the long-term category growth, noting past cycles of slowdowns and rebounds, and stated that guidance is built on market share gains and pipeline, not category assumptions.

Dara Mohsenian from Morgan Stanley asked if the newly announced production credits would enable incremental investment to drive long-term top-line growth. He also sought to clarify if the FY26 growth guidance implies outsized performance or simply growth off a new, higher FY25 earnings base.

Answer

President and CEO Mark LaVigne confirmed the credits enhance the ability to invest but noted this builds on the $200 million in savings from Project Momentum, which already funded growth initiatives. EVP and CFO John Drabik clarified that the FY25 outlook should be viewed as a new earnings base, and the company expects to grow algorithmically off that higher level in FY26 after offsetting tariff impacts.

Dara Mohsenian of Morgan Stanley asked about the company's ability to return to its evergreen organic sales growth targets beyond 2025, questioning if the current year is an aberration. He also requested more detail on the recent slowdown for the Batiste brand and the reasons for optimism for a recovery.

Answer

President and CEO Rick Dierker characterized 2025 as an 'aberration' due to unusual category volatility and expressed high confidence in returning to the evergreen model long-term, aided by recent portfolio optimization. For Batiste, he cited multiple factors for the slowdown, including resolved supply issues and a competitor's price increase, but expressed confidence in a return to share gains by ensuring the brand has offerings at all key price points.

Dara Mohsenian pointed to decelerating U.S. market share in tracked channels for April and questioned the company's confidence in gaining share for the year. He also asked for an updated view on capital allocation and whether share repurchases might become a higher priority.

Answer

Executive Richard Dierker pushed back on the premise of losing share, stating he fully expects the company's portfolio and strategy to drive share gains, attributing any short-term softness to promotional timing. On capital allocation, he and CFO Lee McChesney strongly reiterated that M&A is the clear number one priority, and while buybacks could be considered after a long period without a deal, the focus is on maintaining firepower for acquisitions.

Dara Mohsenian questioned the lack of enthusiasm for the recent pickup in category growth and asked for an update on the international progress of the HERO and THERABREATH brands.

Answer

CEO Matthew Farrell explained that the strong October consumption was likely an anomaly driven by temporary factors like a hurricane and port strike, hence the continued caution. He considers the underlying 3% category growth to be healthy. Regarding international expansion, he confirmed HERO is now registered in 40 countries and both brands are traveling well, but deferred providing specific sales mix data until a future Analyst Day.

Dara Mohsenian asked for more detail on THERABREATH's performance, including any signs of consumer trade-down, and inquired about the expected timing for the VMS business turnaround efforts to show results.

Answer

Matthew Farrell (executive) highlighted THERABREATH's continued success, noting its strong performance even on Amazon's Prime Day without promotion, and sees long-term growth from its antiseptic line. Regarding VMS, he stated a turnaround is not expected this year and will likely take another 6 to 12 months, as progress has been slower than planned.

Dara Mohsenian from Morgan Stanley inquired about the new productivity program, asking for details on its operational changes, savings payback, and timing. He also asked for perspective on the slowdown in U.S. household product category growth.

Answer

Chairman, CEO & President Noel Wallace explained the productivity initiative is designed to accelerate the company's 2030 strategic plan by investing in capabilities like innovation, omnichannel demand generation, and AI. CFO Stanley Sutula added that the program involves a $200-$300 million charge over three years with a savings profile similar to past initiatives. Regarding the U.S., Noel Wallace attributed the slowdown to a 'persistently cautious consumer' but expects categories to normalize over time.

Dara Mohsenian of Morgan Stanley requested more detail on consumer behavior in emerging markets amid macro concerns and asked about market share performance in key regions like Latin America and China.

Answer

Noel Wallace, Chairman, President and CEO, noted that while emerging markets felt the global uncertainty, they have seen a faster comeback than North America. He highlighted very strong volume and value share in Latin America and Africa, Middle East. He conceded that China remains a challenge, particularly the Holly and Hazel business, but the Colgate brand itself performed well with mid-single-digit organic growth. He also mentioned continued softness in India's urban markets.

Dara Mohsenian inquired about the confidence behind the robust 2025 EPS guidance, particularly the implied local currency earnings growth, and sought details on the 3-5% organic sales growth (OSG) outlook relative to Q4's performance.

Answer

CEO Noel Wallace expressed confidence, citing the company's well-positioned strategy for consistent dollar earnings growth, flexibility built into the P&L, and a focus on balanced volume and price growth. He highlighted that Q4 organic growth was nearly 5% when excluding the private label pet business, which he considers a strong result in the current environment. He also noted that new pricing actions in Q1 2025 are intended to offset foreign exchange headwinds.

Dara Mohsenian inquired about the competitive environment and pricing strategy in North America, given recent price declines, and the sustainability of Hill's Pet Nutrition's strong performance and market share gains amid industry-wide challenges.

Answer

Noel Wallace, Chairman, President and CEO, explained that North America's performance was largely expected, with some volume softness due to shipment timing and skin health impacts. He affirmed the Hill's business is performing exceptionally well with strong volume and margin, allowing for reinvestment to drive category growth and market share gains, particularly in the wet segment.

Dara Mohsenian of Morgan Stanley inquired about the Fairlife brand, focusing on the potential impact of new U.S. capacity additions in 2026 and the feasibility of international expansion.

Answer

Chairman and CEO James Quincey confirmed Fairlife's strong double-digit volume growth in Q2 and stated the new capacity coming online in 2026 will steadily alleviate constraints. He highlighted the success of the Santa Clara dairy brand in Mexico as an example of international progress and noted that while the U.S. dairy structure is unique, the company is actively exploring opportunities to bring Fairlife's benefits to other global markets.

Dara Mohsenian questioned why the full-year 2025 earnings guidance was maintained despite a strong Q1 and improved foreign exchange outlook, which implies a lower currency-neutral forecast. He also asked about the company's ability to sustain unit case growth amid a more difficult environment.

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President and CFO John Murphy stated that it is still early in the year and that currency volatility, particularly in emerging markets, warrants a prudent approach to guidance. Regarding volume, he acknowledged the strong start but noted that Q2 faces a tougher comparison and that actions to address market challenges will take time to show results, reaffirming confidence in the full-year outlook.

Dara Mohsenian requested more granularity on the 2025 organic revenue growth forecast, specifically the balance between volume and price/mix, and the company's pricing plans amid consumer stress and FX pressure.

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CEO James Quincey explained that for 2025, the company targets the high end of its 5-6% long-term algorithm. He anticipates growth will be slightly more weighted to price than volume, but with continued solid volume momentum. He noted that about half of 2024's 10% price/mix was from high-inflation countries, which is expected to largely drop out in 2025, leading to a moderation in overall pricing.

Dara Mohsenian from Morgan Stanley inquired about the sustainability of the strong 3% mix component within the Q3 price/mix results, particularly looking ahead to 2025, and the key efforts driving this performance.

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Chairman and CEO James Quincey explained the 3% mix had two components. The first, an enduring piece, is driven by the strategic focus on both affordability options and premiumization, such as with the fairlife brand. The second, a more temporary factor, resulted from slower growth in lower-priced emerging markets relative to developed markets, which he expects to normalize.

Dara Mohsenian inquired about the drivers behind the recent weakness in Clorox's traditionally defensive product categories, its potential duration, and how the current downturn compares to past economic cycles.

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CEO Linda Rendle explained that while categories were in line with expectations through mid-February, a subsequent weakening in U.S. consumer sentiment led to shifts in shopping behavior. She noted consumers are prioritizing food, conserving cash, and changing spending habits due to macroeconomic and geopolitical uncertainty. Rendle emphasized that core at-home behaviors, like using Clorox products, haven't changed, and there's no significant trade-down to private label. She anticipates categories will remain down low-single-digits in Q4 but expressed confidence in their long-term resilience.

Dara Mohsenian of Morgan Stanley inquired about Clorox's confidence in driving gross margin expansion beyond fiscal '25 and its long-term drivers. He also asked about the timing of the Glad joint venture change and its potential impact on the company's M&A strategy.

Answer

CFO Kevin Jacobsen expressed confidence in continuing margin expansion, targeting 25-50 bps of EBIT margin growth annually starting in FY26, driven by productivity, the upcoming ERP conversion, and expanded margin transformation efforts. CEO Linda Rendle explained the Glad JV change was a mutual decision timed with the contract's expiration and stated there is no change to the company's M&A priorities or uses of cash.

Dara Mohsenian asked about the sustainability of market share expansion following the cyber-attack recovery, the key drivers for future growth, and the company's assumptions for back-half market share and volume performance. He also inquired about the current promotional environment.

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CEO Linda Rendle confirmed that Clorox has fully restored its market share to pre-cyber attack levels and expects to continue growing share, although at a more moderate and potentially 'lumpy' pace. She noted that the promotional environment has largely returned to pre-COVID levels, with the exception of the Litter category, where Clorox is intentionally increasing promotions to win back consumers.

Dara Mohsenian requested details on the incremental $300 million in tariffs, including their source and expected offsets, and asked if the company's ability to manage cost volatility with agility has changed since its Analyst Day.

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CEO Michael Hsu asserted that the company's agility has improved and framed the tariffs as a discrete, near-term issue. CFO Nelson Urdaneta broke down the $300M gross impact: ~67% from U.S. tariffs on China, 10% from U.S. reciprocal tariffs, and ~25% from retaliatory tariffs by other countries. He stated they plan to mitigate about one-third of the impact this year through supply chain re-optimization.

Dara Mohsenian inquired about the progress and tangible benefits of the 'rewiring' organizational changes, and the outlook for 2025 top-line growth, specifically the balance between price and volume.

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CEO Michael Hsu expressed confidence in the company's long-term strategy, citing durable category growth drivers. He noted 2025 category growth is expected to be around 2%. CFO Nelson Urdaneta added that 2025 pricing will be largely flat, with growth primarily driven by volume and mix, a shift from the significant, but tapering, hyperinflationary pricing seen in 2024.

Dara Mohsenian inquired about the U.S. promotional environment, forward pricing plans, and the strategy for managing international pricing relative to FX. He also asked for a high-level view of Edgewell's competitive position in Sun Care for the upcoming season.

Answer

COO Daniel Sullivan explained that 2025 pricing is focused on international markets where Edgewell has leadership, while the U.S. focus is on revenue management amidst a highly promotional environment, especially in Fem Care. For Sun Care, President and CEO Rod Little expressed strong confidence, citing solid distribution, robust innovation like Banana Boat 360, and positive leisure travel trends. Sullivan added that international Sun Care performance is strong, with recent share gains in Australia and Mexico.

Dara Mohsenian of Morgan Stanley asked about the long-term sustainability of the company's strong consumption trends and whether the guided full-year gross margin range of 37-38% is a sustainable level for the future.

Answer

CEO Carla Vernon addressed consumption sustainability by pointing to strong fundamentals, including a 5% increase in unit growth, a 4% price/mix benefit, and rising repeat purchase rates. CFO David Loretta confirmed the gross margin improvements are structural and sustainable, driven by lasting product cost and supply chain savings. He added that future expansion will be supported by continued cost initiatives, scale benefits, and a favorable mix shift to higher-margin products.