Colgate-Palmolive Company (CL) — Q1 2024 Earnings Call Transcript

Thanks, Betty. Good morning, and welcome to our first quarter 2024 earnings release conference call. This is John Faucher. Today's conference call will include forward-looking statements. Actual results could differ materially from these statements. Please refer to the first quarter 2024 earnings press release and related prepared materials and our most recent filings with the SEC, including our first quarter 2024 quarterly report on Form 10-Q and subsequent SEC filings, all available on Colgate's website, for a discussion of the factors that could cause actual results to differ materially from these statements. This conference call will also include a discussion of non-GAAP financial measures, including those identified in tables 3, 5 and 6 of the earnings press release. A full reconciliation to the corresponding GAAP financial measures is included in the first quarter 2024 earnings press release and is available on Colgate's website. Joining me on the call this morning are Noel Wallace, Chairman, President and Chief Executive Officer; and Stan Sutula, Chief Financial Officer. Noel will provide you with some thoughts on our Q1 results and our 2024 outlook, and we will then open it up for Q&A. Noel?

Thanks, John, and good morning, everyone, and thanks for joining us to discuss our strong start to 2024. I would like to make two points today on why we think we are well positioned to continue to drive shareholder value through delivering consistent, compounded earnings per share growth. The first is the importance of balanced top line growth. You've heard me speak over the past several years of our focus on delivering balanced organic sales growth, growth in all of our categories, growth in all of our divisions and growth in both volume and pricing. That's what we did this quarter. We delivered organic sales growth in all four of our categories, all six of our divisions and volume and pricing growth on a total company basis. The balance allowed us to deliver on a base business, 6% net sales growth on top of 6.5% net sales growth in Q1 2023 despite a nearly 4% headwind from foreign exchange. The focus on balance between pricing and volume growth allowed us to deliver solid volume growth this quarter, even with the continued volume softness in China and the expected headwind from lower private label growth as we transferred more Hill's volume into our Pet Nutrition manufacturing network. Oral Care, Personal Care and Home Care each grew volume in the quarter with volume growth of 3% for all three categories combined. Our revamped strategy and increased advertising spending have allowed us to drive growth across a greater percentage of our portfolio and our focus on core innovation is keeping our biggest brands relevant and vibrant in consumers' minds. We still have work to do, but our balanced strategy continues to yield results, including continued growth in our Global Oral Care shares, which leads me to my second point, which is flexibility in the P&L. Our focus on revenue growth management and driving our Funding-the-Growth initiatives enable us to achieve a 60% gross margin in the quarter despite significant headwinds from transactional foreign exchange. Our commitment to productivity in the middle of the P&L allowed us to drive 30 basis points of overhead leverage while still continuing to invest in strategic capabilities like digital, data and analytics, all topics we discussed at CAGNY, and prudent balance sheet management allows us to deliver 18% base business earnings growth despite the year-over-year increase in interest expense and the impact from devaluations around the globe. And most importantly, despite an expected mid-single-digit negative impact from foreign exchange, we're guiding to mid- to high single-digit base business earnings per share growth. And we're doing this in the context of meaningful increases in brand investment that will set the stage for growth in the future. This is a testament to the ability of our team to consistently execute our strategy and seize growth opportunities while also preparing to better withstand the inevitable headwinds of running a global business. So with that, I'll take your questions.

So really exceptional business performance this quarter, more or less on all fronts. But I wanted to drill down into your organic growth guidance raise for the year. It seems about half of that, that 2-point increase is being driven by inflationary pricing as an offset to FX and fair enough on that. But there also seems to be at least a point beyond that attributable to upside that you're seeing in real terms across the portfolio. So I'm curious if you could expand on where that upside is coming from versus your prior expectations. And if you'd say more of that is being driven by category growth or it's more being driven by your own market share momentum?

Great. Thanks, Steve. I'd come back to the points I made in my upfront comments around balanced organic sales growth. I mean we're getting really good quality coming through on the volume line. You saw the 1.3. That was with the headwind of private label that we're obviously exiting on the Hill's business and strong pricing across the board, mid-single-digit pricing excluding the impact of Argentina. And as you point out, we're seeing nice share growth consistently around the world that's driving obviously that top line organic growth and the top line sales growth. But we're most pleased with, I think, is the balance we're getting both on volume and price. We're able to still get pricing, not just inflationary pricing, but we still have pricing going through the categories, particularly in some of the markets where we've had more inflationary impact from raw materials. Hill's would be a good example of that. We took some more pricing in the first quarter. The pricing has obviously led to good value accretion in the category and allowed us to drive some value shares. The other important point is we've seen really good momentum in our volume shares. The U.S. had good growth on volume share in toothpaste. We've seen consistent volume share growth, both in Europe and in Latin America across our portfolio. So it's really broad-based across the strategy that we're trying to execute, balanced volume, balanced price, good initiatives through the innovation that we're putting into the market. And then importantly, is the continued robust investment. We're seeing that really pay out in terms of driving not only category growth in the markets where we're spending, but most importantly, allowing us to grow share in the categories where we're spending money. So overall, it's, I think, a reflection of the strategy and a reflection of the balance that we have across both price and volume.

Robert Ottenstein here. Noel, could you provide some insights on Oral Care? Can you discuss the market share trends by region? Specifically, are you gaining share more from international competitors with similar products or from local companies with unique offerings? What are the key factors driving this share growth? Is it mainly due to an increase in your brand's visibility, or are there specific product categories like whitening that are currently resonating more with consumers than before?

Yes. Thanks, Rob. It's a little bit of all of what you've just said. So overall, really pleased with the growth and the acceleration of market shares globally. You saw that in the prepared remarks. You saw that in some of the slides that we provided, particularly on the Whitening segment. And it's really a function of the strategy that we've been executing for the last couple of years and really starting to see the fruits of all that effort. So the growth is coming, obviously, from a good growth in Europe, which we talked about, we're at record shares in Europe, that's a balance between Colgate and our therapeutic brands of elmex and meridol, so good spending behind those businesses. And we're seeing, obviously, that translate into good share growth, particularly in some of the big markets across Europe. Likewise, we're seeing the benefits of that deployed across Africa, where we've launched some of those high-end therapeutic brands as well. North America, the scanner data has been improving as you've seen. But the shares will continue to be a bit choppy there as we move forward, given some of the strategic changes we've taken with some of the drug classes that trade on the promotional environment. Latin America had growth in both value and volume. That was driven both from, I think, the mix and diversity of our portfolio across Latin America, both at the high end and at the entry price point, given the breadth of portfolio offerings that we have there, and obviously, the increased spending that we're putting behind some of the good innovation. So it's really broad-based, good spending, good innovation, across the board and importantly, a credit to the teams and their execution on the ground. And so we see that obviously continuing as we continue to hold investment through the balance of the year, and that share growth is coming from both the multinational competitors as well as local competitors. So broad-based across the board. We're pleased with where we are. We have more work to do, particularly in North America, but overall, a good performance.

I had a question on the gross margin performance. And just kind of how to think about the path from here. We've kind of seen the sequential margin progression over the last six quarters or so. But in the prepared remarks, you touched on certain costs will increase as you move through the year. So just any thoughts on how we should think about the gross margin progression from here would be helpful. And then just within that cost savings, any commentary you can share in terms of how we should be thinking about funding the growth in the context of a very solid start to the year.

Let me discuss this at a more conceptual and strategic level, while I'll allow Stan to address some specific aspects of your question. As we consider the upcoming year, we anticipate pricing to gradually decrease throughout the remainder of the year. Even though we will implement some inflationary pricing and maintain certain pricing in specific markets, we are very satisfied with our global revenue growth management efforts and the positive outcomes they are generating in terms of pricing and category value. The impact of raw materials has been noticeable in the first quarter, and we expect that effect to increase in the latter half of the year. Additionally, we are facing significant challenges from foreign exchange headwinds that affect transactions. Nevertheless, we are confident in the guidance we provided and our strategy for growing gross margins in 2024. This will be supported by our growth funding initiatives and a well-planned distribution of our therapeutic brands globally. We will adjust pricing as necessary to counteract inflationary pressures and foreign exchange challenges while maintaining focus on the middle of the profit and loss statement to ensure we achieve leverage there. Overall, we feel positive about our strategy, although pricing will decrease—its impact in the remainder of the year will not be as pronounced as it was in the first half. However, we are optimistic about our current position. Stan?

We are very pleased with our margin performance in Q1, which improved by 310 basis points compared to last year and also saw sequential growth. There was a slight benefit from Argentina, but the overall underlying margin improvement was quite strong. We are expecting margin expansion for the year and are confident in our ability to achieve it. There are some challenges and benefits to consider. We have noted moderate inflation in raw materials, which we anticipate will increase slightly as the year progresses. Additionally, foreign exchange fluctuations have been variable, but we expect this to be a headwind as we move forward. On the positive side, we have effective revenue growth management programs globally that are yielding benefits. We also have a solid track record of funding growth and a robust pipeline in place. Our teams are focused and well-prepared for the future. Importantly, we expect to return to volume growth, which will generate scale benefits and leverage in our manufacturing operations. Overall, we anticipate expanding our margins on a year-over-year basis. While the sequential expansion may be more modest, we believe that our revenue growth management and funding the growth initiatives will offset the headwinds posed by foreign exchange and raw material costs.

So Noel, you mentioned in the prepared remarks for the Hill's pet food business that you're expecting sequential volume improvement throughout the year. Maybe can you give us some color on the puts and takes with less impact from private label volumes in top line? And also, just any sense of the contribution from innovation expansion into wet pet food and any color on the trajectory of the business would be helpful.

So as we said in the prepared remarks, really pleased with the performance at Hill's in the quarter in what's a pretty tough operating environment. Volume was closer to flat excluding the impact of private label and that was sequentially up, which is good. And we had very good pricing, as we discussed, coming out of the year in 2023 and our need to continue to offset some of the agricultural inflation that we saw in the back half of '23 moving into '24. Category volume overall has been a bit sluggish, but I think what's most important is to see that the sluggishness has been more of a decline in treats and a little bit of conversion from wet to dry, and that's obviously important for us to think about as we strategically move some of the bigger parts of our businesses, which are in the dry segment moving forward. Really importantly, though, is the fact that we generated really strong share growth in the first quarter of the year behind the Hill's business. We're up in pet specialty, up in neighborhood pet, penetration continues to grow. We had both share growth in our Science Diet business as well as Prescription Diet. And I think this is a reflection of the continued strategy that we're deploying, great innovation, great partnership with pet specialty in terms of driving their categories and making sure that we have ample advertising to talk about the science-driven nutrition that we provide to the market. So overall, we feel very good about where the Hill's business is, that business grew high single digits excluding the impact of private label. So we feel we're well positioned, but we're not immune to some of the sluggishness in the category. But again, as we've talked about in the past, we have low brand awareness and low brand penetration. So a lot of upside to continue to go after as we execute our strategy.

The only thing I'd add there is that the investment in capacity has also enabled us to bring in some product that was being co-manufactured before, which improves reliability and delivery and also will improve our margins over time.

And to your point on, Filippo, on wet, obviously, there's some opportunities for us as we're very low indexed in wet. And particularly in segments like cat, where there's a lot of wet food consumed, we have an opportunity to leverage the new manufacturing that we have and get more formulas into the market and obviously, more growth for the business.

Noel, we spoke to the underlying volume growth in all regions and your revenue growth management definitely sets you apart, but can you comment on how you see the consumer behavior, in particular in the low-end consumer in the U.S. and China, which seems to be a concern to some of your peers? And you have historically protected your price points and kept consumers in the category, but I would love to see the examples that you may highlight by your team in the U.S. and in China and how they've been using this portfolio management to barbell between affordability and premiumization.

Yes. I think as we've talked about, thanks for the question, the consumer has been quite constructive. I mean, we've seen obviously the significant inflation move through the category over the last year. We expected that we would see a return to volume growth as inflation became more benign and as pricing started to stabilize in the categories, and that's principally what's happened. Interesting to note that as you take the aggregate of our categories, by and large, the categories are still negative. So the volume growth that we had and delivered in the quarter, which suggests obviously, that we're growing good volume share. And I think that's a reflection of the broad-based strategy that we're deploying. One, we have good innovation at the top end of the category, particularly on the therapeutic side, whether that's in whitening, in the premium side, whether that's the Total Plaque that we've launched, whether that's therapeutic with meridol and elmex as well as a lot of big core innovation. We talked about the fact that a lot of our big core portfolio, particularly in toothpaste, is at that entry or mid-price level. And so we've spent a lot of time innovating at the core to ensure that we keep those brands vibrant and we offer consumers real value and real benefits as they come into the category or they're trading down from mid-price to perhaps entry. You've seen some of the sluggishness in China, to your point, come from the rural segment. Clearly, that consumer is a bit more challenged in China right now. The premium segment continues to be quite robust. But our Darlie franchise is well positioned longer term, we think, to continue to leverage some of the rural softness that we're seeing in the category and make sure that we drive share. The Colgate business had a terrific quarter in China. And that's, I think, a reflection of the move to the premium side of the business as we've really gone a lot more into e-commerce with premium offerings, but overall, we're seeing, I think, a balanced consumer. The key is making sure that we're providing the reasons to use our products and the advertising that we're executing across the market is very, very important to, one, justify the price increases that came through the category last year, but really to drive trade-up in the categories to ensure consumers see the real value and science-driven benefits of our products in our portfolio.

I had a question on your ad spend, which is one of the highest as a percentage of sales among your peers. Noel, you touched on this, but hoping you could talk a little further about your strategy to continue to increase spend. And then ultimately, what you believe is the right level of marketing spend moving forward as well as maybe opportunities to improve ROI.

Thank you, Bonnie. I'll address the latter part of your question first. We are seeing excellent return on investment in the business, which is reflected in our quarterly results. We're experiencing good volume growth, which is noticeably above the category level, and consistent share growth globally in both value and volume. Our premium innovations are gaining market share, and we are allocating a significant portion of our advertising budget to promote premium offerings and enhance category value. Diana spoke at CAGNY about the disciplined approach we're taking with our media spending, leveraging data and analytics to validate our expenditures everywhere, which drives greater personalization and returns on investment. We are pleased with the increase in advertising and its positive outcomes. Furthermore, we are broadly investing across our portfolio. In the past, we've focused heavily on Oral Care and Pet products, but now we are ensuring that our strong brands globally receive adequate advertising support, resulting in a noteworthy return on that investment. For instance, in Europe, we are investing in our Personal Care business, and the Sanex brand is performing exceptionally well there, with our spending on innovations contributing to solid share growth and effective in-store execution. Overall, this systematic approach is positively impacting the business, and we are happy with the results. Looking ahead, as I have consistently mentioned over the past few quarters, we will continue to invest in the long-term growth of this business. Building brand visibility and keeping our brands dynamic is the best strategy for maintaining that consistency.

I wanted to ask you a little bit about your organic sales guide for the rest of the year. Obviously, contextually understand why you wouldn't flow the 10 points continuing. But why would organic sales decelerate as the comp fees? Presumably, you're getting more pricing? Clearly, we understand that this is a very dynamic environment, but would love to get a little bit more color in terms of your expectations for the rest of the year because it sounds like you're very bullish on innovation, on pricing capabilities, and volume acceleration, et cetera. I would appreciate a little bit more color there.

Thank you, Olivia. As we move through the year, we face tougher comparisons. We have implemented significant pricing, and we expect this pricing to stabilize in the latter half of the year, though it remains unclear how much of that will convert back into volume. The positive aspect is that the first quarter and the successes from the fourth quarter give us confidence that volume is starting to return as anticipated. The elasticities are in line with our expectations, which puts us in a good position. However, it's important to note that we are only in the first quarter, and there is considerable economic uncertainty. We continue to see foreign exchange challenges that could affect pricing in certain markets. Additionally, interest rates are likely to remain high for the rest of the year. Overall, we are still early in the year and confident in our provided guidance and ongoing strategy, while ensuring we maintain the operational flexibility needed to fulfill our strategy aimed at achieving consistent growth in earnings per share.

One quick follow-up on gross margin and then a question on North America. So on gross margin, I think there was an expectation that Q1 would be down quarter-over-quarter relative to Q4, clearly, very strong delivery in the quarter. Stan, you mentioned a bit of benefit from Argentina. Or are you seeing better developments elsewhere, whether that's in commodities, perhaps some of the new pricing on Hill's or maybe you're over-delivering on productivity? So just maybe contextualize what seems to have come in a bit better there? And just on North America, it was the best volume growth in nearly two years. I realize Fabuloso was a benefit there. But Noel, you also mentioned needing to work on market shares. Can you maybe just help us understand the underlying momentum of the business right now and how to think about this going forward?

Sure. Thanks for the question. Let me take the North America and then I'll let Stan jump into some of your questions around gross profit. Overall, the strategy in North America that we're executing, we feel good about it. We've been very focused, as we've talked about before on improving the middle of the P&L, getting gross margins back to where they needed to get to, getting operating margins where they need to get back to and reinvesting that into the business in order to drive market shares. The value shares, as I mentioned, we have been a little bit choppy and will continue to be a little bit choppy for the reasons I stated earlier. However, we are seeing better execution of our innovation and our promotional strategies, and that's helping to drive nice volume share in the quarter, both across toothpaste, which was up nicely and toothbrushes from a volume standpoint. So again, we feel good about that, and we still have a lot of work to do across the business, as we've talked about on prior calls, and I've got great confidence in Jesper and his team and the strategy that we're deploying with real patience because we know it's going to take some time, but we feel in the long term, we're going to end up in a much better place from that. The other thing I'd say is that non-Nielsen business in the North America business continues to grow at multiples of the Nielsen business. And obviously, that's not captured in the market share. So we feel good about the overall health in the business, but we'll consistently continue to drive the opportunities that we see in the Nielsen-based accounts.

And Chris, your question on the sequential margin improvement, first of all, I'm pleased with that sequential margin improvement. Argentina was a little bit less of a headwind. And as you watch that FX, it's been very volatile. We've taken actions to address it, including sourcing changes, pricing changes, etc. And then the team candidly executed really well. I mean, we get a little bit of scale benefit from volume, we get some improvement from RGM and the funding the growth was great execution starting the year. So we love the start to the year, and we know FX is going to continue to be volatile, not just in Argentina but in many areas around the world. So a solid start to the year, slightly better than we anticipated on a sequential basis, but pleased with the progress.

I was wondering if you can talk a little bit about Europe. Numbers were super strong. A little bit of context around where you're seeing particular areas of strength and volume would be great. And then just any recent thoughts on private label Unilever brought up yesterday seeing a little more incremental pressure from private label in Europe. So I was just curious to hear your perspective on that as well.

Yes. Thanks, Lauren. A great quarter for Europe. And again, a terrific execution from the team on the ground. Overall, really, really strong with growth across the vast majority of our business, and it wasn't just Oral Care, it was pretty broad-based. And obviously, as you saw, volumes inflected positively given that we're still getting pricing in the category. So pricing will ramp down as we move through the balance of the year. The big change, I think, is our investment strategy in Europe. We see real opportunities for growth, particularly in the Oral Care and Personal Care segment, as we execute some of the innovations that we have there, the meridol and elmex shares broad-based across Europe are at record levels and growing really, really nicely. Again, that is a shift in strategy and what's nice is we're getting the complementary growth on the Colgate side of the business, particularly as we're more focused on the whitening opportunity that we have. So a great portfolio of brands that we're leveraging, we think, more strategically around the region. So the market shares overall look pretty good. In terms of private label, as you know, private label has higher penetration in Europe than it does anywhere else in the world. We have seen some acceleration in some of the home care categories, whether it's dish liquid or fabric softeners or floor cleaners, but that being said, we continue to have good growth across our business, particularly as we broaden the investment strategy across a wider array of our brands in Europe.

Stan, I have a couple of questions related to cash flow. First, is there a guide for capital spending for the year? Also, I noticed you refinanced or funded a maturity in the middle of the quarter with commercial paper. Are you looking to pay that down, or do you plan to refinance or term it out later? Additionally, as you think about cash flow in light of changes in exchange rates and interest rates, do you have any insights on how we should approach free cash flow conversion this year and its applications?

Yes, Bryan, thank you for your question. We are pleased with our cash flow performance, which has had a solid start this quarter. While we are slightly down year-over-year, it’s important to remember that last year was an excellent cash quarter, and this decline was primarily due to receivables, affected by the timing of Easter. We have observed that the early days of this quarter have helped align our days sales outstanding (DSO) back to the norm, so we feel comfortable with the situation. Our cash profits have benefited from top-line growth, and I’m very satisfied with the team's execution in managing net working capital, especially regarding inventory. Despite facing challenges from the Red Sea and the need to build some safety stock in specific areas, inventory management has been executed well. We noticed improvements in inventory days, and the DSO issues were merely timing-related. Regarding capital expenditures, we previously stated that we expect CapEx as a percentage of sales to decrease compared to last year, mainly due to Tide and Oxy coming online, which means our investment levels are tapering off. Concerning our leverage, our robust cash flow and execution have allowed us to reduce our leverage using the S&P methodology to 1.8 times, reflecting an improvement since year-end. As you pointed out, we repaid a $500 million bond in the first quarter, funded through commercial paper. This was possible due to our strong cash flow and our anticipation that interest rates will eventually decline, although that seems to be pushed further out. This will help us maintain a balance between fixed and floating rates. Overall, our cash flow performance has been strong, and these factors feed into our capital allocation strategy. As you've seen, this strategy continues to focus on investing in the business, which will naturally cause CapEx to fluctuate as we invest in advertising. We've also increased our dividend and engaged in share buybacks during the quarter, alongside exploring M&A opportunities to enhance our overall portfolio.

Yes, Bryan, the only thing I would add is, again, picking up on the theme of flexibility, it's not only flexibility throughout the P&L, but it's having a really strong balance sheet that gives us the flexibility to deploy capital as we see the best return on that investment. And I give Stan and the finance organization huge credit and the discipline that they're bringing around the world to ensure that the cash generation continues to be robust.

I wanted to go back to North America and the outperformance of these untracked channels. We can now start to see in some of the data, the distinction between the new and the legacy channels, and it's pretty stark in your business, in particular, Hill's specifically, but overall, there's just a lot more growth in those channels, I guess that they're smaller. But curious on your take on what is driving that exceptional outperformance. And how sustainable is it in terms of these other places like Costco, Amazon, etc., that's contributing to that growth overall, and I'm specifically looking at Hill's, which is really doing quite well in those new channels.

Yes. Thanks. So again, we've been talking about that for quite some time, and that has been, I think, a reflection of the strategy that we've talked about for three years, which is core adjacencies and channels and getting back to real focus and understanding the consumer journey across all of the markets in which we compete has been fundamental to making sure that we have strategies to capture and deploy our investments in areas where we think we're going to get the best return for that. And some of these emerging channels that are not captured by Nielsen are very, very important, whether that's hard discount stores in parts of the world. Whether that's the club store environment, where the value pack in large sizes continue to be a big growth driver, whether that's the ease and convenience of shopping online and some of the digital execution and understanding the digital shelf and the discipline that we brought to that, that ultimately is being seen through the success that we're having in those alternative channels. We don't anticipate that that will change. I think as some of the classical brick-and-mortar retailers really up their game, and we're certainly seeing that across the U.S. markets where the big players are certainly becoming far more sophisticated and progressive with their offerings and their shopper experience. We're partnering with them to ensure that our brands are involved in that journey that they're on, and making sure that we're bringing our digital capabilities to the entire omnichannel environment and making sure that Colgate and the brands that we offer are at the forefront of that. So it's, again, shopper journey the experience that the shoppers are getting, the value orientation on some of those channels and our ability to be much more targeted with some of our spend, and that's particularly related to the online retailers.

A question for you on the competitive environment and outlook. It would appear to date that promotional activity and competition hasn't ramped to the extent that some of your peers and some of your large peers are looking to accelerate growth via reinvestments. So would love to hear first whether that assessment on the environment is accurate generally. And then your perspective on whether there's enough opportunity to elevate category growth via things like household penetration growth, premiumization and share gain to net higher levels of growth? Or is all of this reinvestment just the new cost of doing business?

Yes. Thank you, Brett. It's noteworthy that many competitors are concentrating on achieving healthy category growth through two primary strategies: increasing media investment and enhancing innovation. We haven't observed a significant global shift towards selling more volume through promotions, as current levels remain below pre-COVID figures. However, as volume becomes a key focus, some companies might adopt a strategy that involves more promotions. Overall, the category is thriving due to major players investing in media and creating value through innovative and differentiated offerings. It is essential for us to ensure that our innovations continue to add real value to the category and stand out in a highly competitive market. We need to leverage our analytics and data to formulate balanced promotional strategies. We will compete effectively where necessary. I mentioned that we have made some tough choices in the U.S. market to avoid deep discounts in promotions, especially in certain retail contexts. While this may temporarily affect our Nielsen shares, we believe that over the long term, we will use our resources more effectively. Ultimately, we aim to maintain the prominence and health of our brands, doing so through media and innovation rather than relying on promotions.

Just a kind of follow-up on Latin America. So given the strong organic sales growth in the last few quarters, what should we expect going forward? I mean, to what extent is the consumer willing to continue to accept meaningful price increases without giving up volumes?

Yes. Again, let me contextualize Latin America. Obviously, a really strong organic sales growth quarter, with and without Argentina, there was good volume growth across every single hub led by Brazil, which was up double digits. If I take the last four quarters of Latin America in terms of volume, 0.5, 5.4, 8, and 6.2. So again, very consistent with what we talked about. Our ability to get pricing early in the market has allowed us now to see the volume return to the categories and ultimately into our business. Our marketing is really strong and innovation is very strong on the ground, and so we feel very good about where we're seeing. And that's been translated into really positive share growth for the business. So excluding Argentina, very good organic growth. Organic up significantly in the region. I think you saw double-digit growth in Brazil, which has been terrific. Oral Care, particularly has been really strong in the quarter. That was up double digits, excluding Argentina. Shares in value and volume up. It's been quite some time since we saw both of those move in the right direction, and again, a reflection, I believe, of the strategy of increased investment and making sure that we have a breadth of offerings in that market. That is a market that's accustomed to inflationary pricing across many of the markets in which we compete. Being key for us is making sure that we continue to advertise strongly in the markets, and we bring real innovation across the entire portfolio that keeps the categories vibrant, allows us to work with our retailers to drive category growth and hopefully capture share at the same time. So overall, we think Latin America is well positioned for continued growth, and we like what we're seeing there.

Great. Well, thanks, everyone, for joining the call today. Obviously, we're really pleased with the quarter and how we've gotten off to a strong start that we believe sets us up for continued sustainable growth moving forward and generating that long-term algorithm that we've been talking about for quite some time for our shareholders. Let me particularly reach out to all of the Colgate employees around the world for their incredible dedication and resilience and their hard work in really executing a strategy around the world and for getting us off to a great start. So thanks, everyone. We'll see you and talk to you soon.