Financial Data and Key Metrics Changes - The second quarter results met expectations with an improvement in year-over-year top line performance [4] - A noncash impairment charge of $9.3 billion was recorded due to a sustained decline in stock price, affecting the carrying value of intangible assets [16][17] Business Line Data and Key Metrics Changes - In emerging markets, top line growth was approximately 8% driven by both price and volume, with the highest operating income margin ever achieved [28] - North America retail showed a decline of 2.7% in the latest four weeks, excluding cold cuts and bacon, with year-to-date decline at 4% [29] Market Data and Key Metrics Changes - The company is experiencing challenges in North America retail, but improvements are noted in other segments, particularly in emerging markets [28][29] - Inflation is expected to be around 5% to 7% for the year, with pricing actions taken to mitigate impacts [26][50] Company Strategy and Development Direction - The company is focused on unlocking long-term shareholder value through strategic evaluations and investments in product superiority and manufacturing capabilities [4][10] - Continued investment in marketing and product innovation is planned, with a target of reaching 4.8% of net sales by the end of 2025 [22][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategy and ongoing investments, emphasizing a disciplined approach to financial management [10][31] - The company is optimistic about growth opportunities in emerging markets and is committed to driving improvements in North America retail [28][30] Other Important Information - The company is actively expanding its brand growth system, which is expected to impact 40% of the business by the end of the year [46] - Significant product renovations are underway, with expectations of a 20% market increase year-over-year in the second half [32] Q&A Session Summary Question: Strategic transactions and potential business separation - Management is evaluating strategic options to unlock long-term value while maintaining financial discipline [10][11] Question: Details on impairment charge - A $9.3 billion noncash impairment charge was recorded due to a decline in stock price, which was anticipated [16][17] Question: Pricing and promotion levels - The company is investing in pricing and marketing, with a 100 basis point increase in pricing year-over-year and a 30 basis point increase in marketing [22][26] Question: Sales trends in emerging markets - Emerging markets saw an 8% top line growth, with confidence in achieving double-digit growth by year-end [36][38] Question: Timing of inflation and promotions - The impact of inflation and promotions pushed from Q2 to Q3 is estimated at 30 to 40 basis points [40][41] Question: Organic sales growth in North America Retail - The company is focused on stabilizing North America retail through investments in product superiority and marketing [46][48] Question: Gross margin outlook and inflation - Inflation is expected to remain at 5% to 7%, with a 100 basis point impact from tariffs anticipated [50][51] Question: Pace of innovation - Innovation as a percentage of sales increased from 1.6% in 2022 to 3% by the end of last year, with plans for further growth [65][66]

Financial Data and Key Metrics Changes - The second quarter results met expectations with an improvement in year-over-year top line performance [4] - A noncash impairment charge of $9.3 billion was recorded due to a sustained decline in stock price, affecting the carrying value of intangible assets [15][16] Business Line Data and Key Metrics Changes - In emerging markets, the top line grew approximately 8% driven by both price and volume, with the highest operating income margin ever achieved [26] - North America retail showed a decline of 2.7% in the latest four weeks, excluding cold cuts and bacon, with year-to-date performance down 4% [27] - Significant investments are being made in product renovations and marketing, particularly in key brands like mac and cheese, lunchables, and mayo [30] Market Data and Key Metrics Changes - The company is experiencing a negative pricing trend in North America when excluding cost inflation, which is expected to be around 5% to 7% for the year [21][24] - The company is focusing on maintaining consumer-centric pricing strategies while investing in marketing to reach 4.8% of net sales by the end of 2025 [21][24] Company Strategy and Development Direction - The company is actively evaluating strategic options to unlock long-term shareholder value, maintaining financial discipline in any potential actions [9][10] - Continued investment in product superiority, manufacturing capabilities, and marketing is emphasized as a key strategy for growth [4][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategy and ongoing investments, indicating that the company is not done with its growth initiatives [29] - The focus remains on driving improvements in North America retail through brand growth systems and product renovations [46][49] Other Important Information - The company is expanding its distribution and innovation efforts in the away-from-home segment, particularly in emerging markets [26][37] - The company anticipates some relief from commodity inflation in Q4, with ongoing high inflation in certain areas like heat and coffee [52] Q&A Session Summary Question: Discussion on strategic transactions and potential business separation - Management confirmed that the board is working urgently on evaluating strategic options to unlock long-term value, emphasizing financial discipline [9][10] Question: Details on the sizable impairment recorded - A noncash impairment charge of $9.3 billion was due to a sustained decline in stock price, which had been monitored for some time [15][16] Question: Pricing and promotion levels - The company is investing in pricing and marketing, with a 100 basis point increase in pricing year-over-year and an additional 30 basis points in marketing [21][24] Question: Sales trends in emerging markets - Emerging markets saw an 8% top line growth, with confidence in achieving double-digit growth rates by year-end [36][37] Question: Gross margin outlook and inflation impact - Inflation is expected to remain at 5% to 7%, with a 100 basis point impact from tariffs anticipated for the year [52][53] Question: Innovation pace and future plans - Innovation as a percentage of sales increased from 1.6% in 2022 to about 3% by the end of last year, with plans to continue driving innovation [67][69]