Mark Astrachan • Stifel Financial Corp.

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Noel Wallace, Chairman, President and CEO, stated that the company's market shares are strong in the growing mass and club channels, which bodes well for them. Regarding Hill's at Walmart, he explained that they are now using a third-party logistics (3PL) distributor to sell to Walmart online. This move allows them to clean up unauthorized third-party sellers and ensure the brand is represented properly in that online environment.

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CEO Noel Wallace responded that the company remains focused on its strategic 'swim lane' of science-based, premium pet nutrition, which he identified as the fastest-growing part of the category and where Hill's is outpacing competitors. While acknowledging the overall category is currently flat, he expects it to turn positive in the latter half of 2025. He emphasized that Hill's will continue to focus on its identified growth segments and strong fundamentals.

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Noel Wallace, Chairman, President and CEO, responded that overall U.S. shares were roughly flat, with a slight dip in toothpaste offset by gains in toothbrushes and good performance in untracked channels. He acknowledged the business is not where they want it and the focus is on dialing up the premiumization strategy and innovation. He also noted that sluggishness in the drug channel, where Colgate has high share, has been a headwind.

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Executive Andre Schulten confirmed the trend is not new and that P&G's portfolio is well-positioned to serve these channels. He noted the primary structural impact of this shift is a permanent reduction in overall trade inventory, as these channels are more efficient. He stated this does not fundamentally change the company's selling approach, as its brands and pack sizes are already adequate for the evolving retail landscape.

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Andre Schulten, an executive, confirmed the established playbook of using pricing combined with innovation to offset FX in Enterprise Markets. He and CEO Jon Moeller attributed the SK-II recovery to several factors: easing geopolitical sentiment, significant investments in brand building and in-store presence, new premium innovation (LXP), and underlying consumption growth outpacing shipments.

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Executive Andre Schulten defended the brand's relevance, attributing its struggles primarily to the unique negative sentiment towards Japanese brands in China. He noted the brand is performing well outside of China and travel retail. The company is actively investing to rebuild brand equity in the affected markets and feels good about the core brand proposition.

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CEO John Fieldly reiterated his confidence that the Alani Nu consumer is incremental to the Celsius portfolio. He attributed Alani's success to its authentic brand identity and strong emotional connection with its core consumer base of Gen Z and millennial females. He stated that the combination creates a modern portfolio to capitalize on the mainstreaming of the energy category and the broadening of its consumer base.

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CFO Jarrod Langhans confirmed that stronger scanner data trends would likely lead to a more favorable inventory outcome. CEO John Fieldly attributed the market share dip to factors like reduced foot traffic in convenience stores. He expressed confidence in regaining momentum through new innovation, retailer programs, and better alignment with PepsiCo. Fieldly acknowledged that Celsius's share is historically lower in convenience stores and that closing this gap remains a primary opportunity.

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CFO Michael DeVeau addressed the first point, stating the customer mix is roughly one-third global, one-third mid-sized, and one-third small/local/private label. He confirmed that growth is faster among the regional and private label customers, which is a priority area, especially for the Taste business. CEO Jon Erik Fyrwald handled the second question, explaining that the goal is to achieve both strong growth and margins. He noted that while gross margins are improving, aggressive investments in R&D and commercial capabilities might temper near-term EBITDA margin expansion, but these investments are expected to yield attractive returns within three years.

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CEO Jon Erik Fyrwald did not quantify the restocking impact but emphasized that both multinational and local/regional customers are very important. He stated that innovative multinationals are engaging in more projects, while the company is also strengthening its capabilities to serve growing regional and local customers, supported by investments in new creative centers. He concluded that IFF is seeing growth opportunities across all three customer segments.

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CFO Laurent Mercier explained the current inventory situation as a transition following several years of disruption, suggesting a normalization will occur eventually. CEO Sue Nabi added that while Coty's heritage brands are outperforming peers, the company is continuously evaluating its entire portfolio to identify long-term opportunities and the best return on investment for each brand and category, keeping all options open.

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President and CEO Scott Huckins clarified the shift is a 'reground on process' with a sharper focus, prompted by a category forecast showing a double-digit decline in foam products. He stated the company is playing offense with strategic investments to set the stage for growth in 2026 and beyond. Huckins also noted that pricing actions on aluminum are designed to stay within key price thresholds to manage elasticity, while CFO Nathan Lowe added that the revenue guide assumes a 2% category decline driven entirely by foam.

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President and CEO Lance Mitchell noted modest sequential improvement in consumer demand. CFO Scott Huckins explained that rising commodity costs are managed through hedging, vendor agreements, and 'Reyvolution' cost savings before considering price increases. He added that the credit facility was upsized to align with peer companies and reiterated a disciplined capital allocation strategy across organic investment, M&A, and shareholder returns.

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Hilton Schlosberg, Vice Chairman and Co-CEO, attributed the improvement to pricing actions and managing input costs like aluminum through a laddered hedging strategy. Rodney Sacks, Chairman and Co-CEO, added that margins have improved sequentially and expressed optimism for further gains, citing the new Irish juice plant coming online in early 2025, but was uncertain if they could reach 2021 levels.

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CFO Mandy Fields clarified that the practice of taking ownership of inventory when it leaves China is not new. She strongly refuted any risk of obsolescence and explained that the higher inventory levels are a strategic necessity to support the brand's expanding global footprint, including new distribution centers in multiple countries, which ensures they can service strong consumer demand.

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CEO William Cyr stated that while the company feels good about the European business model, it is still testing and validating the supply chain before committing to further investment. Co-Founder and President Scott Morris explained that e-commerce is primarily driven by its retail fridge network via click-and-collect, and the direct-to-consumer channel remains in a small-scale 'test and learn' phase.

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Executive William Cyr stated that for Europe, the company is testing the supply chain's reliability before committing to further investment. Executive Scott Morris explained that the e-commerce business is primarily click-and-collect and that the D2C channel is in a 'test and learn' phase, representing a small part of the business.

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Matthew Farrell (executive) did not comment on M&A asset prices. Regarding vitamins, he attributed the issues more to internal execution and category shifts to other forms like powders, rather than efficacy concerns. Richard Dierker (CFO and Head of Business Operations) added that the company is rapidly working to expand its sugar-free offerings and improve its taste profile to regain a competitive edge.

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