Rob Ottenstein

Rob Ottenstein inquired about the key elements and learnings from the U.S. market turnaround, and how these strategies and tactics could be applied to improve trajectories in other major markets globally, specifically mentioning China.

Answer

CEO Michel Doukeris highlighted the U.S. team's consistent focus, investment, and hard work in rebalancing the portfolio for growth since 2017, particularly in under-indexed segments. He identified China as a key market for applying these learnings, emphasizing the need for focused, consistent execution, investment in the right channels (off-trade, O2O, inland distribution), and a sense of urgency to reignite growth after industry accommodation and channel shifts.

Rob Ottenstein asked for clarification on the company's currency approach, the drivers behind the 1% top-line and 3% bottom-line tailwind in 2026 guidance, and the philosophy for investing currency benefits. He also inquired about the multi-year FX outlook for 2027.

Answer

President and CFO John Murphy explained that the hedging program enables consistent local investment and clarity for U.S. dollar earnings growth. The 2026 tailwind is primarily driven by a weaker U.S. dollar in key emerging markets like Latin America and South Africa. The company is well-hedged on G10 currencies through 2026 and economically hedged on emerging markets. He did not provide an outlook for 2027 FX.

Rob Ottenstein asked for clarification on the company's approach to currency, the drivers behind the 2026 guidance of a 1% top-line and 3% bottom-line tailwind, the philosophy on investing currency benefits versus dropping to the bottom line, and the multi-year hedging policy for 2027.

Answer

John Murphy, President and CFO, explained that the hedging program manages non-market-driven fluctuations locally and provides clarity for U.S. dollar earnings growth. The 2026 tailwinds are largely due to a weaker U.S. dollar in larger emerging markets (Latin America, South Africa). The company is well-hedged through 2026 for G10 currencies, with emerging market hedging linked to economic sense, and the benefits are incorporated into guidance.

Rob Ottenstein asked for confirmation that the combination of Hefty and Presto segments is driven by strategic and efficiency goals rather than pure cost takeout. He also inquired about the drivers behind the accelerated market share gains in Q4, whether there were any unusual factors, and if these gains are expected to continue into 2026, potentially leading to increased shelf space in spring resets.

Answer

Scott Huckins, President and CEO, confirmed the Hefty and Presto combination is execution-driven, focused on clarity and growth, not cost. Nathan Lowe, CFO, added it's about 'better outcomes with the same resources.' Scott Huckins attributed the broad Q4 share gains across six largest categories (excluding foam) to innovation, the performance brand philosophy (consumer value focus), and high 90s case fill rates. He noted these trends continued into January 2026 and that 5 points of distribution were picked up in Q4, expressing optimism for future shelf resets.

Rob Ottenstein asked if the combination of Hefty and Presto was primarily strategic and efficiency-related rather than a pure cost-takeout initiative. He also inquired about the drivers behind the Q4 market share gains, whether there were any unusual factors, if the trend would continue, and its reflection in increased shelf space for the spring shelf set.

Answer

Scott Huckins, President and CEO, and Nathan Lowe, CFO, confirmed that the Hefty and Presto combination is execution and growth-driven, not cost-motivated, aiming for better outcomes with the same resources. Scott Huckins attributed Q4 share gains across the portfolio to innovation, the performance brand philosophy, focus on value, and high service levels (high 90s case fill rate for 2025). He noted continuation into January and optimism for May-June distribution outcomes due to strong share performance.

Rob Ottenstein inquired about the holiday season outlook, specifically regarding promotional intensity in categories like waste bags and food bags, and the impact of consumer affordability challenges on growth. He also asked why management flagged the risk of retailers shifting store brand business to other suppliers.

Answer

Scott Huckins, President and CEO, explained that promotional intensity in waste bags and food bags is in line with pre-pandemic levels, with Hefty Waste Bags outperforming the category. He noted that consumers remain under pressure due to inflation, cooling labor markets, and declining sentiment, but Reynolds is prepared to serve both affluent brand loyalists and value-oriented store brand shoppers. Regarding the store brand risk, Huckins clarified it's an expected increase in bid activity from retailers seeking value for consumers amidst economic uncertainty, but Reynolds, as a U.S.-centric manufacturer, expects to win more than it loses.

Rob Ottenstein asked about the transferability of learnings from the Colgate brand's success in China to Hawley & Hazel, other Asian markets, and the U.S., particularly regarding omni-channel strategies.

Answer

Noel Wallace, Chairman, President, and CEO, explained that Colgate China's commercial strategies, especially in omni-demand generation (strong brick-and-mortar and e-commerce), are being transferred globally. He highlighted their success in unique innovation and personalized online messaging. Hawley & Hazel is now replicating this, leveraging its distribution while evolving to e-commerce, with a successful new super-premium product entry online. Structural changes were also made to Hawley & Hazel's business.

Rob Ottenstein inquired about the transferability of Colgate's successful turnaround and growth strategies for the Colgate brand in China to Hawley & Hazel, and potentially to other regions in Asia and the U.S.

Answer

Chairman, President, and CEO Noel Wallace explained that learnings from the Colgate China team, particularly in omni-demand generation and personalized messaging, are being transferred globally. He noted that Hawley & Hazel is now replicating these strategies, especially in e-commerce, leveraging unique innovation like a dual-chamber technology product. Significant structural changes have also been made to Hawley & Hazel to adapt to the evolving market environment.

Rob Ottenstein asked about channel dynamics, how consumers are responding to the weaker environment in terms of shopping channels (including Amazon), and Energizer's strategy to adapt to these changing patterns.

Answer

Mark LaVigne, President and CEO, explained that consumers are seeking value and are comfortable shifting channels, including e-commerce. He highlighted Energizer's strong performance in e-commerce, with over 35% growth in Q4 and 25% for the year, expecting 15% growth in fiscal year 2026. He noted that Energizer is gaining share across 4, 13, and 52-week periods, with its broad portfolio of premium and value brands meeting consumer needs.

Rob Ottenstein asked about current channel dynamics, how consumers are responding in terms of shopping channels, the performance of Amazon for Energizer and the category, and the company's strategies to adapt to these changing consumer behaviors.

Answer

Mark LaVigne, President and CEO, explained that consumers are actively seeking value and are comfortable shifting channels, including e-commerce, to meet their needs. He highlighted Energizer's strong e-commerce performance, with growth exceeding 35% in Q4 and 25% for the full year, and an expected 15% growth in 2026. He noted that Energizer is gaining market share across various time periods due to its broad portfolio of premium and value brands, which effectively captures consumers seeking value.

Rob Ottenstein sought to understand CEO Rahul Goyal's mandate from the board, specifically if he has the freedom to make significant changes or if the approach is more about tweaking existing strategies.

Answer

CEO Rahul Goyal stated that the board is focused on maximizing shareholder value, and he has been given the freedom to pursue plans that achieve this, with 'no sacred cows.' He acknowledged the challenging category context but emphasized the opportunities within the portfolio, and the commitment to both returning cash to shareholders and deploying capital for growth.

Rob Ottenstein asked CEO Rahul Goyal about his mandate from the board, specifically whether he has the freedom to make significant changes with 'no sacred cows' or if the approach is more to 'stay the course' and make incremental adjustments.

Answer

CEO Rahul Goyal stated that the board is focused on maximizing shareholder value and has given him the freedom to pursue plans that achieve this, with 'no sacred cows.' He acknowledged category challenges but emphasized the opportunities within the portfolio, committing to returning cash to shareholders while also deploying capital to drive top and bottom-line growth.

Rob Ottenstein asked about the increasing importance of affordability in U.S. consumer choice and how Procter & Gamble plans to address this through channel strategy, revenue growth management, or price pack architecture, beyond just innovation.

Answer

CFO Andre Schulten clarified that 'value' (price over integrated performance) is central, not just 'affordability,' noting consumers still trade up where value is attractive, with private label shares declining. P&G addresses value through strong price ladders, optimizing pack sizes, channel presence (club, online for larger packs; smaller cash outlay for paycheck-to-paycheck consumers), and innovation across all value tiers (e.g., Luvs, Cascade, Tide, Gain).

Rob Ottenstein questioned whether affordability has become a greater driver of consumer choice in the U.S. and how P&G plans to address this through channel strategy, RGM, or price pack architecture, beyond innovation.

Answer

Andre Schulten, CFO, clarified that 'value' (price over integrated performance) is central, not just affordability. He noted continued consumer trade-up where value is attractive, declining private label shares, and P&G's improving sequential value share. He emphasized serving consumers across all value tiers and channels with strong price ladders, optimized pack sizes, and targeted promotions, while maintaining integrated superiority.

Rob Ottenstein sought clarification on the reported increase in loyalty for Corona and Modelo, particularly for Corona Extra, which has seen greater declines than competitors. He inquired about Corona's demographic mix, the performance and size of Corona Familiar, and the specific data indicating enhanced loyalty for Corona.

Answer

CEO Bill Newlands stated that brand health metrics, including intent to buy and first-choice consumer preferences, indicate increased loyalty. While Corona Extra has faced challenges, the broader Corona family, including Corona Familiar (a top share gainer) and Corona Sunbrew (the number one new brand in dollars), is performing exceptionally well, with Corona Extra providing a crucial halo effect for the overall franchise.

Rob Ottenstein sought clarification on the reported increased loyalty for Corona and Modelo, particularly for Corona Extra which has seen declines relative to competitors, and asked for insights into the performance and size of Corona Familiar and the data supporting increased Corona loyalty.

Answer

CEO Bill Newlands explained that brand health metrics, including intent to buy and purchase intentions, indicate increased loyalty. He acknowledged Corona Extra's recent challenges but highlighted its halo effect for the broader family, noting Corona Familiar as a top share gainer and Sunbrew as the number one new brand in dollars and number four share gainer overall, supported by marketing efforts like Major League Baseball sponsorship.