Financial Data and Key Metrics Changes - The company reaffirmed its full year 2025 organic sales growth guidance of about 5% despite headwinds from U.S. retailer restocking and hot weather in Europe impacting chocolate demand [9][10] - Organic sales in North America declined about 3.5% year over year in the first half, with underlying trends softer than anticipated [13][19] - The company expects a reasonable P&L for 2025 with top-line growth of 4% to 5% and a 10% EPS decline, indicating a challenging year ahead [6][7] Business Line Data and Key Metrics Changes - The company noted that chocolate consumption in Europe was impacted by hot weather, particularly in the U.K. and Germany, leading to a decline in volumes [10][11] - In North America, the company is focusing on optimizing shopping trips and maximizing brand presence, particularly for Oreo, which has seen increased penetration but decreased purchase frequency [17][19] - The company is implementing price pack architecture in Europe to protect specific price points and stimulate consumption through promotional activities [12][27] Market Data and Key Metrics Changes - In emerging markets, the company sees significant growth potential, particularly in India and China, despite current consumer caution [36][40] - Brazil is performing well with good single-digit growth, while Mexico is experiencing a slowdown in consumer offtake [40][41] - Cocoa supply is expected to increase, leading to a potential surplus and a decrease in cocoa prices, which could positively impact margins [32][33] 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 to drive innovation and market presence, viewing these partnerships as win-win opportunities [20][25] - The cakes and pastries category is identified as a significant growth opportunity, with expectations of reaching $125 billion by 2030 [52][54] Management's Comments on Operating Environment and Future Outlook - Management expressed that consumer spending behavior has not changed significantly over the past two and a half years, with consumers remaining cautious and prioritizing basic necessities [14][15] - The company anticipates continued challenges in North America over the next 6 to 12 months, with a focus on adapting to consumer behavior [19][40] - Management is optimistic about the upcoming Christmas season, expecting stronger engagement and better elasticities as consumers adjust to new price levels [12][29] Other Important Information - The company is closely monitoring cocoa supply dynamics and exploring alternative sourcing to mitigate cocoa price risks [30][34] - The capital allocation strategy remains disciplined, with a focus on smaller M&A opportunities and a pragmatic approach to share buybacks [47][50] Q&A Session Summary Question: What is the outlook for North America in the next 6 to 12 months? - Management indicated that consumers are cautious and spending has not increased, leading to a challenging environment for the foreseeable future [16][19] Question: How does the company view collaborations with other brands? - Collaborations are seen as opportunities for innovation and market expansion, with potential benefits for both parties involved [20][25] Question: What is the company's strategy regarding cocoa supply and pricing? - The company is optimistic about an increase in cocoa supply leading to lower prices, which would positively impact margins [32][33] Question: What are the growth expectations in emerging markets? - Emerging markets are expected to contribute significantly to growth, with a focus on building strong brands and distribution networks [36][39]