Neuromarketing & Consumer Behavior - Neuromarketing explores how the brain makes decisions before conscious awareness, impacting purchasing choices [1] - Research indicates that many decisions perceived as rational are actually driven by unconscious processes [1] - Artificial intelligence can be used to predict consumer behavior [1] Industry Expertise - Pilar Navarro Muñoz, a specialist in neuromarketing, is the Innovation Director at Fenin (Federación Española de Empresas de Tecnología Sanitaria - Spanish Federation of Healthcare Technology Companies) [1] - Pilar Navarro Muñoz combines professional activities with teaching and research on decision-making [1] - Pilar Navarro Muñoz has experience in sectors such as life sciences, technology, and consumer goods [1] Strategic Communication - The industry believes in the power of science and technology to improve connections with people [1] - The industry aims to rethink communication strategies in an increasingly complex world [1]

Market Trends - Facekinis have transitioned from inexpensive, poorly designed products for older individuals to fashionable items primarily purchased by younger consumers [1] - Facekinis were previously mainly used at beaches [1]

Cultural Differences in Consumer Finance - Western credit culture encourages "buy now, pay later" [1] - In China, the consumer finance approach is typically the reverse [1]

Partnership & Expansion - Abercrombie & Fitch (A&F) announces a multi-year fashion partnership with the NFL, marking a first for both entities [1][2] - The partnership expands beyond licensing to include events and a style concierge program with NFL players [3] - A&F initially tested the NFL partnership with 5 teams and now represents 32 teams, including men's, women's, kids', and pets' apparel [2][3] Target Audience & Market Opportunity - The NFL partnership aims to increase brand awareness by aligning with sports, culture, and fashion trends [4] - A&F recognizes that half of the NFL fandom is female, presenting an opportunity to cater to both male and female consumers [5] - A&F sees the market as large enough for both them and competitors like Fanatics, given the tens of millions of viewers tuning in each weekend [5] Strategic Focus - A&F aims to provide apparel for pre-game, after-game, and game day, helping customers represent their favorite teams [6] - A&F focuses on aligning product, voice, and experience to attract consumers regardless of the economic climate [7] - A&F has a resilient playbook to manage challenges like tariffs, focusing on controlling what they can [8]

Financial Data and Key Metrics Changes - The company reaffirmed its full year 2025 organic sales growth guidance of about 5% despite facing headwinds from U.S. retailer restocking and adverse weather conditions in Europe affecting chocolate demand [9][10] - For 2025, the company anticipates a reasonable top-line growth of 4% to 5% but expects a 10% decline in EPS, which is considered acceptable given the current cocoa circumstances [6][7] Business Line Data and Key Metrics Changes - Organic sales in North America declined approximately 3.5% year over year in the first half, attributed to retailer restocking and softer underlying trends [14][20] - The company is focusing on optimizing shopping trips and maximizing brand presence, particularly for Oreo, which has seen increased penetration but decreased purchase frequency [18][20] Market Data and Key Metrics Changes - In Europe, the company experienced higher elasticities than anticipated, with current levels around 0.6 to 0.7, compared to the expected 0.4 [28][29] - The cocoa supply situation is improving, with a 7% increase in cocoa pot counts in West Africa compared to the last five-year norm, suggesting potential price reductions in the future [31][32] Company Strategy and Development Direction - The long-term strategy established in 2018 remains valid, focusing on building presence in key categories and supporting brand growth [5][6] - The company is exploring collaborations with other brands, such as Coca-Cola and Biscoff, to enhance product offerings and market presence [21][26] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer spending has remained stagnant over the past 24 to 30 months, leading to cautious shopping behavior [15][16] - The outlook for North America is expected to remain challenging for the next 6 to 12 months, with consumers becoming increasingly careful in their spending [20] Other Important Information - The cakes and pastries category is projected to grow from $95 billion to approximately $125 billion by 2030, with the company aiming to enhance its position in this fragmented market [52][54] - The company is maintaining a disciplined approach to M&A, focusing on smaller assets that align with its strategic goals [48][50] Q&A Session Summary Question: What is the outlook for North America in the next 6 to 12 months? - Management expects continued challenges in North America, with consumers remaining cautious and spending levels stagnant [20] Question: How does the company view current cocoa levels and supply dynamics? - The company believes current cocoa prices are unsustainable and anticipates a surplus in the market, leading to potential price reductions [30][32] Question: What is the strategy regarding M&A and share buybacks? - The company remains disciplined in M&A, focusing on smaller strategic assets, while being pragmatic about share buybacks given current stock prices [46][50]

Consumer Behavior - India's new shopper is impulsive, individualistic, and eager to experiment [1] - There are four big changes in how India shops [1] Market Outlook - New leaders of consumer giants in India face challenges [1]

Business Performance - Traffic grew 20% on a three-year basis [1] - AUVs increased from 230% to 3 million over three years [1] Macroeconomic Factors - Macroeconomic uncertainty exists, creating a "fog" for consumers [1][2] - Shifting tariff policies contribute to this uncertainty [3] Cost Management - The company's supply chain team has been agile in mitigating cost pressures [4] - No inflationary pressures have been observed to date on the supply front [4] - The company is focused on offsetting inflationary pressures with efficiencies [5] Labor Market - No pressure on the labor front has been observed [4]

Consumer Behavior & Tariffs - Consumers now have more control over their spending decisions, influencing company strategies [3] - Consumers can choose to avoid tariffs by substituting products [3] - Companies are adapting to tariffs by changing their product mix [4] - Consumers are deciding whether to accept price increases or make substitutions [9] Business Strategy & Uncertainty - Short-term (6-12 months) business planning is challenging due to tariff uncertainty [5] - Businesses need certainty about tariff rates (e g, 10% or 35%) before making capital decisions like moving manufacturing locations [6] - Companies are mitigating tariff impacts through various strategies, including supplier negotiations and cost sharing [8] - 85% of companies beat earnings expectations, indicating successful adaptation to the current environment [8]

Marketing Strategies & Consumer Behavior - The marketing industry utilizes social proof, showcasing popularity to influence consumer decisions, as seen when consumers choose best-sellers in unfamiliar restaurants [1] - Reciprocity is employed by offering free value, like a quiz, to create an obligation for consumers to reciprocate, even if it's just attention [1] - Micro-commitment involves offering a low-risk, low-cost initial purchase to reduce perceived risk and build a customer relationship [1] - Mirror messaging uses personalized messages to connect with consumers on a personal level, addressing their specific needs and feelings [1] Ethical Considerations & Consumer Awareness - The marketing industry acknowledges the need for consumers to be aware of marketing tactics to avoid manipulation and make informed decisions [1] - Consumers are encouraged to pause and question their purchase motivations, distinguishing between genuine desire and fear of missing out (FOMO), also known as loss aversion [1] - Consumers should zoom out and assess whether they are buying something out of genuine need or to escape from tasks or emotions [2] - The marketing industry recognizes the existence of emotional shoppers, who make purchases based on their feelings [2] - Consumers are advised to be mindful of techniques like loss aversion, social proof, and mirror messaging when making purchasing decisions [2]

Consumer Behavior - Shoppers consider price and flavor when choosing foods and beverages [1] - Color significantly influences shoppers' food and beverage choices [1] Industry Trends - Familiar food and beverage colors may soon change [1]