Financial Data and Key Metrics Changes - Organic sales for the quarter grew by 1%, with volume and mix in line with the prior year and pricing contributing an additional 1% to organic sales growth [5][11] - Core earnings per share (EPS) were $1.54, up 1% year-over-year, while on a currency-neutral basis, core EPS increased by 3% [11] - Core gross margin decreased by 30 basis points, while core operating margin increased by 90 basis points [11] Business Line Data and Key Metrics Changes - Personal Healthcare saw high single-digit growth, while Skin and Personal Care grew in the mid-single digits [6] - Fabric Care, Oral Care, Feminine Care, Grooming, and Hair Care were stable to up low single digits, whereas Family Care, Baby Care, and Home Care experienced low single-digit declines [6] - Organic sales in Focus Markets grew by 1%, while Enterprise Markets grew by 2% [7] Market Data and Key Metrics Changes - Organic sales in North America grew by 1%, a decline from the previous trend of 4% growth over the last five quarters [7] - In Europe, organic sales were up 1%, but France faced significant challenges with organic sales down in the high teens [9] - Greater China saw a 2% decline in organic sales, although SK II grew in double digits due to strong consumer response [9][66] Company Strategy and Development Direction - The company is focused on investing in long-term brand health, innovation, and demand creation despite near-term volatility [5][14] - The strategy emphasizes delivering superiority across all product categories and maintaining strong margin investment levels [15][16] - The company aims to mitigate cost and currency headwinds while driving margin expansion through productivity improvements [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains volatile, with challenges from input costs, currencies, and geopolitical dynamics [24][30] - The company expects organic sales growth of approximately 2% for the fiscal year, with a range of 0.5% to 4.5% for the fourth quarter [24][25] - Management remains committed to innovation and investment to drive market growth and balanced growth in the long term [30][76] Other Important Information - The company returned nearly $3.8 billion to shareholders this quarter, including $2.4 billion in dividends and $1.4 billion in share repurchases [12] - The company announced a 5% increase in its dividend, marking the 69th consecutive annual dividend increase [12] Q&A Session Summary Question: Consumer behavior in the U.S. and Europe - Management acknowledged a slowdown in consumer takeaway and noted that U.S. consumer confidence metrics are weak, with a shift towards online and big box retailers [32][34] Question: Modeling for fiscal 2026 - Management indicated that global growth rates have decreased from 3.5% to 2.5%, but they expect markets to return to 3% to 4% growth in the mid-term [42][44] Question: Investment behind innovation - Management confirmed that investment levels in media and advertising remain flat as a percentage of sales, with a strong focus on supporting innovation [50][52] Question: Positioning against consumer trade down - Management believes the company is well-positioned to serve consumers across various price points and has a broad portfolio to address shifting consumer value equations [55][57] Question: Brand sentiment and market performance in China - Management reported no significant anti-American sentiment affecting brand performance, with SK II showing strong growth in China [63][66] Question: Tariff impacts and pricing strategies - Management discussed the estimated tariff impact of $1 billion to $1.5 billion before tax and emphasized the need for productivity and pricing strategies to mitigate these costs [98][102]