Olivia Tong • Raymond James Financial

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CFO Laurent Mercier explained that H2 growth will be driven by the end of retailer inventory reductions, a healthy market, and strong innovations, ensuring full-year EBITDA will exceed $1 billion despite tariff headwinds. CEO Sue Nabi added that two blockbuster launches and a major perfume mist initiative will further bolster H2 performance. On consumer beauty, Nabi noted a strategic shift in marketing for mass color to improve ROI and profitability, while highlighting that the growing mass fragrance category is highly profitable and additive to the business.

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CFO Jeremy Smeltzer estimated that about half of the lost sales were likely recovered in July. CEO David Maura noted the consumer has been surprisingly resilient. Smeltzer added that value brands in Home & Garden are gaining share, while premium Pet brands are seeing consumers return. He stated that the remaining pricing needed for fiscal 2026 is a relatively small $20-$25 million, which is less than 1% of revenue and will be implemented strategically with retail partners.

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CFO Jeremy Smeltser clarified that the company is committed to managing the HPC business effectively, and the required capital for the supply chain transition is nominal. He stated the vast majority of new production will be with existing suppliers who are moving their operations. The products being de-prioritized represent about 15-20% of HPC's U.S. sales. Regarding free cash flow, he explained the guidance is supported by profitability, cost management, and significant working capital benefits from liquidating HPC inventory in the U.S. without replenishment.

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Senior VP & CFO Mandy Fields stated there is no scenario contemplated where the core e.l.f. business would be down year-over-year, attributing scanner data deceleration to cycling a very strong fall launch from the prior year. CEO & Chairman Tarang Amin detailed the expanding Sephora partnership, highlighting the successful launch in Mexico and upcoming launches for Rhode in the US, Canada, and UK, as well as for the e.l.f. brand in the six Gulf Cooperation Council countries.

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SVP & CFO Mandy Fields stated that Q1 consumption trends are strong, though the company is cycling significant growth from the prior year. Chairman and CEO Tarang Amin confirmed that the Dollar General partnership is exceeding expectations and explained that Rhode will operate independently from Los Angeles, leveraging e.l.f.'s resources to support its major Sephora launch and global expansion.

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President & CEO Denise Paulonis stated that the BSG segment's rebound was consistent throughout Q3 and not merely due to pent-up demand from a challenging Q2. The strength was driven by innovation and a healthy stylist business. Regarding new categories, Paulonis confirmed they are actively testing cosmetics, skincare, and fragrance in the 35 brand refresh stores. This is enabled by SKU rationalization to create space, and the company plans to expand this test to 50 more stores in the next fiscal year to gauge customer response and potential for a broader rollout.

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President and CEO Denise Paulonis affirmed confidence in the company's core strategy, highlighting key initiatives like Licensed Colors on Demand, CRM, marketplaces, and innovation. She stated that while tactics may be adjusted in response to the consumer environment, she does not foresee fundamental changes to the overall strategy. Paulonis emphasized the strategy's success in delivering three consecutive quarters of growth prior to Q2's macro pressures, reinforcing her positive view of the core business.

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COO Daniel Sullivan detailed that Q4 growth is driven by international markets accelerating due to pricing and new product distribution, while North America's decline will moderate thanks to a better Sun Care profile, Fem Care returning to growth, and cycling easier comps for Wet Ones. President and CEO Rod Little confirmed that the company will continue to invest where it sees strong returns, such as with Cremo, Hawaiian Tropic, and HydroSilk, and plans to expand successful campaign strategies to other brands. Sullivan added that these investments will be funded by ongoing productivity and efficiency initiatives.

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President and CEO Rick Dierker declined to give monthly guidance but expressed confidence in the 2.5% back-half growth outlook. He stated that consumer trade-down is a net benefit for the company, though significant recessionary behavior has not yet materialized. Regarding the portfolio, Dierker asserted that after the recent exits and the current vitamin review, there are no further plans for strategic changes, as the remaining brands all have a role to play.

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CFO Mark Erceg clarified that implied Q4 core sales are expected to be roughly flat, not up. CEO Chris Peterson attributed the sequential improvement to Q4-weighted distribution wins from tariff advantages, the major Yankee Candle relaunch hitting in its peak season, and new retailer shelf-set implementations. Regarding pricing, he stated retailers have been constructive, with the main issue being timing. The full consumer impact is not yet clear as the latest price hikes just took effect.

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Chairman, CEO & President Noel Wallace cited consistent advertising levels, a strong innovation pipeline, and pricing opportunities as key drivers for second-half growth, assuming modest category improvement. CFO Stanley Sutula described the productivity program as a combination of supply chain optimization and resource reallocation, which will involve rebalancing assets and headcount over time, but did not provide specific details.

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CEO Linda Rendle outlined a two-pronged superiority strategy: raising the bar in categories where Clorox already leads and making significant improvements in areas like cat litter. She affirmed the company has financial flexibility to adjust spending. CFO Luc Bellet expressed confidence in the flat to +50 bps ex-ERP gross margin guidance, citing a strong pipeline of cost savings to offset inflation and tariffs.

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CEO Linda Rendle reported that inventory levels are normalized at both retail and the consumer level, with no major issues to report. CFO Kevin Jacobsen highlighted the structural drivers of the margin beat, including strong cost savings programs (on track for over 200 basis points of improvement) and the accretive impact of divesting two margin-dilutive businesses, which is expected to add 50-70 basis points to margins.

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President, CEO & Chairman Jon Moeller expressed confidence in future pricing, explaining that P&G's portfolio is resilient because it focuses on daily-use categories where performance drives value. CFO Andre Schulten added that he expects Focus and Enterprise markets to have similar aggregate growth performance in fiscal 2026.

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CFO Tracy Schuerman confirmed the gains were net and highlighted new distribution for Braun blood pressure monitors at Walmart and international expansion for Hydro Flask and Osprey. CEO Brian Grass added that the board is leading the CEO search, seeking a leader with strong brand-building and growth experience. In the interim, Grass is focused on simplifying the organization and prioritizing sustainable, product-led growth over purely marketing-driven initiatives.

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CFO Eva Boratto stated that the company will remain agile and 'read and react to the customer and the market' on pricing. CEO Daniel Heaf reiterated his earlier comments on international strategy, emphasizing that he will focus on a select group of priority markets and match them with the most appropriate business model, rather than applying a one-size-fits-all approach.

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CFO Eva Boratto stated the increased cost savings guidance is due to value engineering in the supply chain and ongoing SG&A discipline. She declined to give specific AUR guidance to maintain promotional flexibility. CEO Gina Boswell outlined several traffic-driving initiatives for the second half, including the full launch of the 'Everyday Luxuries' line, new on-trend fragrances, a new collaboration, and two major cross-category launches.

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CFO Paula Oyibo explained that while the guidance was updated to reflect Q1's strength, the company remains cautious about second-half uncertainty. She projected low-single-digit comps for the first half, followed by a range of down low-single-digits to up modestly in the second half. Oyibo stated that the promotional environment is expected to remain rational and that the company is working with brand partners to mitigate any potential tariff impacts.

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CEO David Kimbell identified competitive pressures as the largest driver of the Q2 miss. He explained that incremental promotions layered in late in the quarter drove e-commerce traffic but failed to deliver incrementality in stores. He clarified that the revised outlook is based on a holistic assessment of all challenges and that the go-forward strategy relies on a mix of levers, not just promotions, to drive performance.

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CEO Stephane de la Faverie explained that differentiation will be driven by a 'transformative innovation' plan, which aims to triple the number of products launched in under a year. This speed will enable the company to tailor new products to specific retailers, consumer segments, and price points globally, helping to capture consumers in a fragmented distribution landscape.

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