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Good morning, and welcome to Procter & Gamble's quarter-end conference call. Today's event is being recorded for replay. This discussion will include a number of forward-looking statements. If you will refer to P&G's most recent 10-K, 10-Q and 8-K reports, you will see a discussion of factors that could cause the company's actual results to differ materially from these projections. As required by Regulation G, Procter & Gamble needs to make you aware that, during the discussion, the company will make a number of references to non-GAAP and other financial measures. Procter & Gamble believes these measures provide investors with useful perspective on underlying business trends and has posted on its Investor Relations website, www.pginvestor.com, a full reconciliation of non-GAAP financial measures. Now I will turn the call over to P&G's Chief Financial Officer, Andre Schulten.

Jon Moeller here. I'm going to start the call and then I will hand it over to Andre. Good morning. Obviously, Andre is joining me here, as is John Chevalier, Senior Vice President of Investor Relations. Last evening, we announced that, after 38 years of service, I will transition into the role of Executive Chairman of the Board beginning January 1, 2026, and that the Board of Directors has elected Shailesh Jejurikar as the incoming President and Chief Executive Officer. This move has been thoughtfully planned and provides P&G with highly capable and experienced leadership going forward. Shailesh has a distinguished track record throughout his 36-year P&G career and has been an integral part of P&G's leadership team for the past 12 years. He's delivered substantial contributions across multiple businesses in both Focus and Enterprise Markets, including regional and global leadership of our Fabric & Home Care categories. Most recently, Shailesh served as Chief Operating Officer with P&L ownership for our Enterprise Markets business, along with the management responsibilities for our product supply, market operations, global business services and IT organizations. Over the last 17 years as CFO, COO and CFO -- COO and CEO, I've had the benefit of working closely with Shailesh and our outstanding global leadership team to develop an integrated comprehensive set of strategies to guide our choices and priorities. Those strategies continue to serve us well. Shailesh has been a partner in advocating for a focus on balanced top and bottom line growth and the need for P&G brands to lead the growth of our markets. Growing markets versus simply taking business to build market share. These fundamentals guide our decision- making as we execute our integrated growth strategy and drive value creation for shareowners. For my part, it's been a tremendous honor to serve as P&G's Chairman, President and Chief Executive Officer. As I've walked the halls of P&G buildings around the world for the last 38 years, I'm constantly reminded of the privilege it is to work alongside such committed colleagues and friends. P&G has afforded me the chance to serve consumers and communities around the world. It's been a true joy and a tremendous learning experience. Our strategy is working. Our bench is strong. As we cross the calendar year, it's a good time to transition to the next generation to lead the P&G team through its next chapter of top and bottom line growth, and of course, value creation. With that, I'll now turn the call over to another esteemed colleague, Andre Schulten, to lead us through fiscal year 2025 fourth quarter and the year-end results.

Thank you, Jon, and congratulations to you and to Shailesh. And I'm very happy you will be in the current position for the next 6 months and Executive Chairman thereafter. So with that, I'll start with an overview of results for fiscal '25 and then the fourth quarter. Jon will add perspective on strategic focus areas and capabilities. And we will close with guidance for fiscal '26, and then take your questions. Execution of our integrated strategy enabled the company to grow organic sales and core EPS and to return cash to share owners in line with our target range in a challenging fiscal '25 despite volatile macroeconomic, geopolitical and consumer dynamics resulting in market-level headwinds that were not anticipated at the start of the fiscal year. Organic sales for the year grew 2%. Volume growth contributed 1 point and price/mix added 1 point. Growth continues to be broad- based across categories and regions. Nine of 10 product categories grew organic sales for the year. Family Care and Personal Health Care each grew with singles. Fabric Care, Home Care, Feminine Care, Hair Care, Grooming, Oral Care and Skin and Personal Care were up low single digits. Baby Care was down low singles. Focus Markets grew organic sales 2% for the year with North America up 2% and Europe Focus Markets up 3%. Greater China organic sales were down 5% versus the prior year, but improved sequentially throughout the fiscal year, growing 2% in the most recent quarter. Enterprise Markets were up 2%, led by Latin America with 4% organic sales growth. E-commerce sales increased 12%, now representing 19% of total company. 30 of our top 50 category/country combinations held or grew share for the year. Seven of 10 product categories held or grew share globally. In aggregate, global value and volume share were both in line with prior year. All channel market value in the U.S. categories in which we compete grew around 3.5% in fiscal '25. P&G consumption growth was roughly in line with category value and volume levels for the year. Our earnings per share were $6.83, up 4% for the year. Core gross margin declined 40 basis points and core operating margin increased 50 basis points. Nearly $2.7 billion of productivity improvement across cost of goods sold and SG&A enabled an increase in investment in superior products, packages and brand communication to drive market growth. On a currency-neutral basis, core EPS was up 4% and core operating margin increased 50 basis points. Adjusted free cash flow productivity was 87%. We increased our dividend by 5% and returned $16 billion of value to shareowners, nearly $10 billion in dividends and $6.5 billion in share repurchase, consistent with our guidance at the start of the fiscal year. Moving to fourth quarter results. Organic sales rounded up to 2%. Volume was in line with prior year. Pricing and mix were each up 1%. Growth continues to be broad-based across categories and regions as 9 of 10 product categories held or grew organic sales. Fabric Care, Home Care, Feminine Care, Family Care, Grooming, Oral Care, Personal Health Care and Skin and Personal Care each grew low singles. Hair Care was in line with prior year. And Baby Care was down low singles. Six of 7 regions held or grew organic sales. Focus Markets were up 1%. Organic sales in North America were in line with prior year, while we continued to see solid consumption growth in North America of around 2%. Sell-in trail sell-out due to retailer inventory reductions. European Focus Markets organic sales were up 2%. Greater China organic sales grew 2%, another quarter of sequential improvement and positive momentum heading into fiscal '26. The 618 key consumption period was relatively strong, but we are closely watching economic and consumer confidence impacts resulting from higher U.S. tariffs on Chinese imports. Enterprise Markets grew 3% for the quarter. Latin America organic sales were up 6%, including double-digit growth in Mexico more than offsetting a modest sales decline in Brazil due to trade inventory reductions. Europe Enterprise and Asia Pacific, Middle East, Africa Enterprise regions each grew organic sales low singles. Global aggregate market share was down 20 basis points. 28 of our top 50 category/country combinations held or grew share for the quarter. On the bottom line, core earnings per share were $1.48, up 6% versus prior year. And on a currency-neutral basis, core EPS increased 5%. These results include a $0.03 impact from tariffs. Our gross margin was down 70 basis points and core operating margin increased 150 basis points. Very strong productivity improvement of 560 basis points with healthy reinvestment in innovation and demand creation. Currency-neutral core operating margin increased 170 basis points. Adjusted free cash flow productivity was 110%. And we returned $3.3 billion of cash to shareowners this quarter, $2.6 billion in dividends and $700 million in share repurchase. In summary, another year of sales and earnings growth and strong cash return to shareholders in a challenging economic and geopolitical environment. With that, I'll pass it back to Jon.

Thanks, Andre. I'll start with a few thoughts on results before discussing the strategy. We're pleased with the performance P&G people delivered last fiscal year in the face of a very dynamic, difficult and volatile environment, growing sales and profit and returning high levels of cash to shareowners despite heightened consumer anxiety with tariffs, inflation, interest rates, political and social divisiveness and immigration and employment status uncertainty, all resulting in lower category growth and unpredictable geopolitical environment and against highly capable competitors. While not all results are at the levels we aspired to deliver at the beginning of the year, growth in this environment is worth acknowledging. To be clear, there's more work to do to continue improving the areas in our control, which will be needed to offset the headwinds that are largely not in our control. The restructuring program we announced last month is one important step towards strengthening the execution of our integrated strategy. I'll talk more about this later. At Investor Day last year and at recent investor conferences, we've highlighted the significant growth opportunities we have ahead of us just in the categories where we play today. In North America, up to $5 billion of market potential simply by growing household penetration of our brands among currently unserved or underserved consumers. In Europe, more than $10 billion of opportunity by driving consumption in growing markets to the current best-in-class levels in the region while maintaining the current market share. In Enterprise Markets, $10 billion to $15 billion of sales opportunity by driving per capita consumption to the levels we currently have in Mexico. Positioning ourselves to capture these growth opportunities and manage the increasing near-term challenges is best accomplished with disciplined execution of our integrated growth strategy with a focus on driving category growth and value creation. A focused portfolio of daily use products in categories where performance drives brand choice. The portfolio is performing, delivering broad-based growth across nearly all categories and most geographies. We're active managers of this portfolio. Over the last several years, we've made some targeted additions and subtractions in our brand portfolio. We've adjusted our operating model in several markets. We'll be making additional portfolio moves as part of the new restructuring program. Next, an ongoing commitment to and investment in integrated irresistible superiority through innovation across the 5 vectors of product, package, brand communication, retail execution and value holistically defined. Leveraging that superiority to delight consumers, grow markets and our share in them to jointly create value with retail partners. The innovation plans across the businesses are broad and strong as each category team works to increase their margin of superiority and consumer delight. Superior innovations that are driven by deep consumer insights communicated to consumers with more effective and efficient marketing programs, executed in stores and online in conjunction with retailer strategies to grow categories and our brands and priced to deliver superior value across each price tier where we compete. No one of the 5 superiority vectors can carry the day by itself. It's all 5 working together. A few recent examples. In China, Pampers is driving growth in the premium and super-premium segments of the market by consistently upgrading and clearly communicating its superior offerings to deliver ultimate comfort, protection and luxury softness on skin. In fiscal '25, Pampers grew organic sales nearly 20% in China and increased value share by over 2 points, growing share in both off- line and online channels. Pampers grew its point of market entry share becoming the best diaper for newborns among moms less than 30 years old. SK-II recently launched a supercharged product line called LXP. It contains our highest concentration of PITERA, delivering 8x faster visible results and is positioned in the super-premium segment of the Prestige skin market. This superior product in a beautiful package sold online and in department stores with upgraded counters and beauty counselors is a superior shopping experience and value for the PITERA-loving loyal consumer. The superior LXP messaging has the added benefit of haloing over the total SK-II brand and is building brand equity through consistent recognition from top beauty award groups. During the most recent key consumption event in China, SK-II and Pampers led growth in their respective categories, outperforming the market and gaining share. Another example in Latin America, Pantene's deep conditioning treatment collection is leading category growth, leveraging formulas featuring visibly enticing melting pearls, which deliver superior hair repair, superior advertising with compelling visuals and retail execution with beautiful end-aisle displays communicate the benefit and value for the consumer seeking softer, shinier hair. Mexico Hair Care organic sales were up mid-teens in fiscal 2025 with value share growth over 1.5 points. Swiffer recently introduced the Sweep and Mop Deluxe, the first major upgrade to the original Swiffer sweeper since its launch 25 years ago and following the Swiffer PowerMop launch last year. Sweep and Mop Deluxe features a sturdier stick that collapses in half for easy storage and 2-in-1 dry and wet cleaning capabilities. It's designed for efficient floor cleaning and is great for small spaces. Early launch results indicate 6% new users and 30% incremental sales to the Swiffer Sweeper starter kit business. For the PowerMop launch, the Swiffer team brought several top TikTok creators into their labs to learn about PowerMop from P&G scientists and create engaging communication. From there, the created social media content was tested with P&G's proprietary AI studios. This process ultimately created the superior Mop Smarter campaign across TV, digital and influencer marketing to connect with consumers in fresh ways. Swiffer PowerMop has become the largest product launch in Swiffer's history, contributing to 40% of the growth of Swiffer portfolio and driving 35% of category growth, making it the #1 growth driver in the category. In the U.S. digestive wellness market, Align launched its bloating relief and food digestion version to address the #1 unmet need for nearly half of all consumers, bloating, associated with the inability to digest food. Align delivered meaningful product innovation and communicated the symptom by showing one of the most common and relatable signs of bloating for consumers: not being able to button their pants. This spring, Align launched its first 3-in-1 Biotic, a prebiotic to nourish good bacteria, a probiotic to soothe bloating and a postbiotic to support immune health. This new innovation is off to a strong start, enabling Align to accelerate share growth since launch. Finally, Tide evo, our new laundry detergent developed on our breakthrough functional fibers platform, has started its first stage of national expansion with an online launch of Tide evo Free & Gentle. evo offers superior cleaning performance in a recyclable package with no plastic bottles or water. In test market stores, evo sales have been highly incremental to category growth. And retailer demand has been well above initial expectations. We're in the process of adding manufacturing capacity, and we'll have more to share about this exciting innovation over the coming months. There are many more examples across all categories, more than we have time to discuss in detail this morning. One third-party measure of innovation success is the Circana U.S. New Products Pacesetters report. In 2024, P&G earned 4 of the top 10 spots for the most successful nonfood product launches of the year as measured by retail sales, and 5 of the top 25. This marks the fifth year in a row that we have had at least 3 of the top 10 entries. Our 5 entries in the top 25 list are the most by any individual company for the seventh consecutive year and more than our 7 closest competitors, Unilever, Kenvue, Kimberly-Clark, Colgate, L'Oreal, Clorox, Reckitt Benckiser, combined, for the fifth consecutive year. Looking forward, P&G has 7 entries on the Pacesetters rising stars list for next year, including Downy Comfy cozy fabric enhancer, Febreze premium seasonal collection air care, Gain Mood Collection detergent, Luvs Platinum Protection diapers, Mr. Clean 2x Concentrated Cleaner, Oral-B iO Series 2 power brushes and Secret whole-body deodorant sprays. For perspective, all 3 of our products on the rising stars last year finished in the top 10 for the current year. Third strategy element, productivity improvement in all areas of our operation to fund investments in innovation, brand building and market growth; to mitigate costs and currency challenges; and to expand margins and generate cash. We have an objective for gross savings and cost of goods of up to $1.5 billion before tax, enabled by platform programs with global application across categories with Supply Chain 3.0. We have line of sight to savings from improved marketing productivity, more efficiency and greater effectiveness, avoiding excess frequency and reducing waste while increasing reach. We're taking targeted steps to reduce overhead as we digitize more of our operations. Visibility to more savings opportunity is increasing as the businesses continued to build their 3-year rolling productivity master plans and as we accelerate productivity with our restructuring efforts. Next element of the strategy, constructive disruption of ourselves and our industry, a willingness to change, adapt and create new trends, technologies and capabilities that will shape the future of our industry and extend our competitive advantage. Finally, we've designed and continued to refine an empowered, agile and accountable organization, an inclusive and diverse organization enabling us to better serve an increasingly diverse set of consumers. There are times when continuous improvement of each element of the strategy is enough to deliver the near-term objectives we've set and to prepare us for the next phase of growth and value creation. However, at times, there's a need for a bigger step forward to bolster P&G's growth and value creation. The 2-year restructuring program we announced is aimed at making changes to enable stronger delivery of our integrated growth strategy. This is not a new approach, rather an intentional strengthening of our current strategy to widen our margin advantage in superiority fueled by productivity to win in the increasingly challenging environment in which we compete. The 3 main areas of focus: portfolio, supply chain and organization design. The portfolio choices include exits of some categories, brands and product forms in individual markets. They may also include some brand divestitures. It takes time to plan the execution of these moves and most have not been communicated broadly, so we can't discuss all of the details today. Our priority is communicating first to employees and to retail customers. So here are a few examples of the areas where we will be simplifying the portfolio. We'll be streamlining the Feminine Care pad lineup in several markets in Asia. Similarly, in Oral Care, Fabric Care and Grooming, we'll be continuing small nonstrategic country product form combinations. We'll be discontinuing business operations in Bangladesh. This is not an exhaustive list, but a representation of the ways we're focusing our energy and resources on higher value-creation opportunities. These portfolio moves enable us to make related investments -- interventions in our supply chain, rightsizing and right-locating production to drive efficiencies, faster innovation, cost reduction and even more reliable and resilient supply. Finally, we're making additional changes to ensure an even more agile, empowered and accountable organization design, making roles broader, teams smaller, work more fulfilling and more efficient, leveraging digitization and automation. Smaller teams with greater breadth of skills will work on an integrated end-to-end basis from consumer understanding to design and execution, eliminating the siloed approach to work, creating more integrated ways of working, broadening employee skills to empower decision-making, increasing individual contribution and development and improving the employee value proposition. Across these 3 areas, portfolio, supply chain, organization, we expect to reduce up to 7,000 nonmanufacturing roles or roughly 15% of our current nonmanufacturing workforce over the next 2 years. These steps have been in evaluation by the leadership team for some time. We've been thinking through some of these organization design changes since shortly after our last restructure change 6 years ago. And we've had pilots in Focus on Enterprise Markets in place for well over a year. The portfolio moves have been evaluated over the last year following successful execution with other brands and markets over the past 2 years. I say all of this to ensure our owners that these are well-thought-out plans, not knee-jerk reactions to recent slower markets or higher cost impacts. We remain as confident as ever in our strategy and our ability to drive market growth; to deliver balanced growth and value creation; to delight consumers, customers, employees, society and shareowners. And we're taking steps to drive better execution and more investment in the strategy to grow markets and improve our ability to achieve our growth and value-creation objectives. With that, I'll hand it back to Andre to outline our guidance for the new year.

Thanks, Jon. As we enter fiscal '26, we continue to expect the environment around us to remain volatile and challenging from cost to currencies, to consumer, competitor, retailer and geopolitical dynamics. We believe our going-in guidance for fiscal '26 prudently reflects these market realities. On the top line, we currently expect the markets in which we compete to deliver local currency value growth in the range of flat to 3% for the year with the current run rate roughly in the middle of this range. Our objective is to grow organic sales modestly ahead of the underlying growth of these markets. However, our guidance includes a 30 to 50 basis point headwind from brand and product form discontinuations as part of our 2-year restructuring program. Taken together, our guidance range for organic sales growth is in line to up 4% versus prior year. The low end of this range protects for additional softness in underlying market growth rates. The high end would require acceleration in underlying market growth and market shares. On the bottom line, we are guiding for core EPS growth in line to plus 4% versus fiscal year '25, core EPS of $6.83. This guidance equates to a range of $6.83 to $7.09 per share, $6.96 or up 2% at the center of the range. This outlook includes a commodity cost headwind of approximately $200 million after tax and a foreign exchange tailwind of approximately $300 million after tax. In addition, our outlook includes $1 billion before tax in higher costs from tariffs in fiscal '26. This is based on tariff rates announced since July 9 and assumes USMCA exceptions -- exemptions still apply for imports from Canada and Mexico. You can think about the tariff impact in 3 buckets: about $200 million from materials and products imported from China to the U.S., another $200 million from Canada's tariffs on goods shipped from the U.S. and the remaining $600 million from tariffs on goods coming to the U.S. from the rest of the world. At these rates, tariffs alone are a 5-point headwind to core EPS growth in fiscal '26. We will look for every opportunity to mitigate these impacts, including sourcing flexibility, productivity improvements and pricing with innovation in affected categories and markets. Below the operating line, we expect modestly higher interest expense versus last fiscal year and a core effective tax rate in the range of 20% to 21% for fiscal '26. Combined, roughly a $250 million after-tax headwind to earnings growth. We are forecasting adjusted free cash flow productivity in the range of 85% to 90% for the year. This includes an increase in capital spending as we add capacity in several categories and as we incur the cash costs from the restructuring work. We expect to pay around $10 billion in dividends and to repurchase approximately $5 billion in common stock. Combined, a plan to return roughly $15 billion of cash to shareowners in fiscal '26. These guidance ranges reflect current market realities for consumption and costs, including tariffs. They also reflect our desire to maintain strong investment in the business to enable delivery of our growth algorithm over 2- and 3-year rolling periods as we work through market and cost volatility. This outlook is based on current market growth rate estimates, commodity prices and foreign exchange rates. Significant additional currency weakness, commodity cost increases, geopolitical disruption, major supply chain disruptions or store closures are not anticipated within these guidance ranges. With that, I'll hand it back to Jon for closing thoughts.

We're very pleased with the results P&G people have delivered in a very challenging and volatile environment, growing sales, growing earnings and returning strong levels of cash to shareowners. We continue to believe the best path to sustainable balanced growth is to double down on the strategy. Excellent execution of an integrated set of market constructive strategies delivered with a focus on balanced top and bottom line growth and value creation, starting with a commitment to deliver irresistibly superior propositions to consumers and retail partners. We're taking proactive steps to improve the execution of strategy and our ability to deliver our growth and value-creation objectives. I'm looking forward to being with you through the calendar year as CEO and then as Executive Chair. I'm excited by the additional contributions that Shailesh and our team will make to delight consumers, customers, employees, society, and through this, our shareowners. With that, we'll be happy to take any questions.

[Operator Instructions] Your first question will come from the line of Steve Powers with Deutsche Bank.

Picking up on last night's announcement, I guess I'd like to begin by extending my congratulations to Shailesh, assuming he's listening somewhere. And also say congratulations to you and the entire team, Jon, in what appears a well-thought-out transition. Two questions stemming from that, if I could. First, I know we'll hear a lot more from Shailesh starting in about 6 months, but maybe you could offer a bit more perspective, Jon, on what you see as Shailesh's unique attributes and why you feel he's the right person to succeed you while also elaborating on your goals as you think about the pivot to Executive Chairman. And then secondly, shifting back to the business, Shailesh spoke in early June about the importance of P&G working, as he put it, to create its own tailwinds as we enter fiscal '26 in order to reaccelerate category growth and P&G's own top line. You spoke to the innovation slate this year and overall priorities. But could you elaborate further on those tailwind creation efforts and when within the fiscal year you might expect them to accumulate into more tangible overall results?

Thanks, Steve. As relates to Shailesh's strong suitability to lead the next phase of growth and value creation for the company, he has successfully led our largest businesses, specifically the Fabric & Home Care sector most recently. He's led businesses in both Enterprise Markets and Focus Markets. Most recently, as COO, he had responsibility for -- P&L responsibility for each of the Enterprise Markets. As COO, he gained even deeper knowledge of some of our functional skill sets and capabilities. So he'll bring all of that to bear combined with 36 years of experience. I've worked closely with Shailesh, most closely in the last number of years as he was COO and I was CEO, but we've worked in other capacities together over the years. So he's going to be a great -- a very strong candidate to lead again the next phase of growth and value creation, and I feel very, very good about that. It gives me a fair amount of peace and comfort as I move into my next chapter. In terms of creating our own headwinds -- or sorry, tailwinds, the last thing we need to do is create any more headwinds. The restructuring program that both Andre and I referenced in our remarks is a very good example of that, building financial headroom to invest in innovation, invest in commercialization. And that's the reason we're doing that is to continue to create our own tailwinds to accelerate growth in what is otherwise a very, very difficult environment. Focusing those efforts on the categories and brands and markets that matter is another example of creating our own tailwinds. And we continue to create tremendous advantage with all the work that we're doing in supply, both to improve service to consumers and customers, reduce costs, creating more financial headroom. And then obviously, the appropriate levels of investment and expertise focused on the next round of innovation, the next round of commercialization and I took you through some of the on-market examples in my prepared remarks. And there are many exciting things coming, not just in the categories we currently compete in, but also, selectively, a few additional categories. So again, I move to my next assignment with a sense of excitement and anticipation for what the team will accomplish. And that's one thing I think is important to emphasize when we have these kinds of leadership rotation. Big multinational business is not a me sport. It is a we sport. And I'm most comforted by the breadth and quality of the leadership team, the breadth and quality of the organization that's been executing against the strategies that have generated some of the results that we've been talking about. I'll leave it there.

The next question will come from Lauren Lieberman of Barclays.

Great. And I'll just echo everything that Steve so eloquently said both to you, Jon, and to Shailesh. It was great to get the context of your expectations for market growth and also kind of the current rate. But one thing that's become true over the last couple of quarters is the outperformance of P&G versus its categories. That gap has narrowed and narrowed and narrowed. And that's with what I think has still been a very steady fleet of innovation, of consistent reinvestment. So notwithstanding all the words you just shared around consistency of strategy and confidence in the strategy, what do you think maybe needs to change, and maybe we can focus just on North America, to widen that gap back out where your innovation, your strategies are, in fact, growing the categories, and by virtue of that, growing your share? Because that math doesn't seem to be working more recently. So whether it's competitive environment, particular cohorts in the consumer landscape that have been more challenged, what your perspective would be on how that gap kind of widens back out to support P&G outperformance?

I'll provide some perspective on your accurate observations and our response to them. And then I'll ask Andre to do the same from his vantage point. In North America specifically, we have kind of 3 things that are happening. One is the reduction in category growth rates. The second is -- so if you're operating within a category that's growing at a lower rate, by definition, your margin of growth advantage narrows. Second is, as Andre mentioned in his remarks, the relationship between sell-in and sell-out where we've seen inventory reductions in the part of our retail partners, that is exaggerated by the shift of shopping across the retail channels. And the channels that are growing the quickest right now typically carry lower levels of on-hand inventory, whether that's Walmart, whether that's Amazon, whether that's club stores. The third, and probably most important, is that we do have categories where we've lost superiority. And we simply must regain that level of superiority that allows us to outgrow the market. That's why we're going through the restructuring program that we are. There are specific plans. As you can imagine, they're competitively sensitive and I'm not going to go into step-by-step elements. But you should assume that we clearly understand that we have work to do there. And hopefully, the restructuring program gives you some confidence that we're committed to do exactly that. And obviously, as these things come to market, we'll be talking more about them as early as the back-to-school conference in September. Andre, any other thoughts?

No, I echo what you said, Jon. I think maybe to be specific and give you some confidence here, as Jon said, I think in some categories we have not been able to maintain the level of superiority that we know we need in order to grow the category and grow within the category. But we also know that when we do that, the business quickly reaccelerates and picks up. So if you take Baby Care, for example, while the premium end of the lineup has been growing consistently because we've innovated consistently on Swaddlers and Cruisers 360, et cetera, the lower end, the value tier had not delivered. When we put innovation on Luvs with Platinum Protection, the category part we accelerated, our share reaccelerated and our organic sales reaccelerated. We have the same opportunity on Olay on the core jars business. So we know we're not superior, we know we need to adjust, and we're on it. But where we have superiority in the Olay lineup like Super Serum, we bring in 65% of business via new users. So we grow the category, we grow share within the category. And then we just have a few S-curves that will just fundamentally change the category operates, which is evo, which will launch in the back half of the year. We've got it in the online business right now, but we firmly plan to expand that further. So there's plenty of proof. We know what to do. We need to execute brilliantly. And we create the fuel to do that with the restructuring and the productivity efforts that you see. The second part I'll leave you with is the new business opportunity of $5 billion that we quote is real. These are underserved and unserved consumers that we can access. But they are -- this is only a number on a piece of paper until we allocate resources to it, which is exactly what we're doing and doubling down to ensure that regions, segments, consumer groups that we have not as actively pursued in the U.S. we are going after with full intention and all the resources we have.

And I think, Lauren, as you just -- again, to the heart of your question on reaccelerating the gap in performance or the advantage in performance between P&G and the competitive set, I mean, one thing you need to look at is who is positioning themselves for the level of investment that we're describing here. And I won't speak to others, but we are intent on ensuring that we're well positioned to do exactly what we described.

The next question today will come from Dara Mohsenian of Morgan Stanley.

So Jon, congrats on a remarkable run at driving shareholder value and Shailesh on his greater responsibilities. Jon, can you discuss how the restructuring you recently announced will enable greater organizational capabilities looking forward, particularly just given the external technology advancements that we've seen and how those 2 points interplay with each other? And on the other piece of big news, with the CEO change, all the background on Shailesh's capabilities is very helpful. Just any insight or perspective on the timing of the CEO change, why is now or technically January the right time to move to new leadership?

Great. I'm going to start with the last part of your question, Dara. And usually when I do that, you'll have to repeat the first part. But in terms of why now and you said technically January 1. It's not technically January 1. It's actually January 1. And the only reason I emphasize that is because the next observation I'm going to make, as of January 1, I will have served this company for 38 years. My wife worked for this company in a senior executive capacity until she retired when I became CEO. Between the 2 of us, we'll have served this company for 7 decades, almost 3/4 of a century. The results that you referred to and that have been delivered give me comfort in the strength of the strategy, the sustainability of the strategy. If you go back to when we completed the articulation of the strategy and began executing against it, which was 7 years ago, in 2018, this team has built -- has created $17.5 billion in incremental sales, which puts us at the 84th percentile of the S&P 500. At the same time, they generated $6 billion in incremental profit, which puts us at the 92nd percentile of the S&P 500, creating, as you referenced, significant market cap growth of $180 billion, more value creation than all but 1 of our competitors have created over their entire 1- and 2-century histories as a company. So 7 years vis-a-vis 1 or 2 centuries. And in the process, the team has built the 18th most valuable publicly -- U.S. publicly traded company, the 21st most valuable in the world. So we embark on our next chapter from a position of strength, both from a strategic standpoint and from an executional standpoint. We've recently, and Andre mentioned, we've described this first at the Deutsche Bank conference in Paris in June, strengthened the execution of that strategy, which gives me further comfort that we'll be able to execute against that. And as I mentioned, we have a very strong team inclusive of Shailesh. And so I just look at all of this and say, this is the right time to make a transition as we lap the fiscal year. I'm very confident we'll be able to do that in a very constructive way. In terms of the timing or the cadence that you asked about in terms of when these tailwinds that we're creating for ourselves bear fruit, as you would expect, there's an executional period that has -- there's a planning period that has to occur. There's an executional phase. And then we get to impact. So that will build as we go through the fiscal year and into next. Oh, sorry. You always ask very complex questions, Dara. So my team here has reminded me that I, as is typical, overlooked one of your key questions and it's a very important one, which is how are we thinking about the organization design and why do we -- why does that give us confidence, and what tailwinds does that create? Many of you have probably heard me talk about this before, it's one of my pet topics to talk about because I think there's so much there, there. Industry broadly defined has operated over the last 100 years in a very siloed, heavily functional organization model. But the world has changed. And the world isn't thinking about things that way. And so I think there is immense opportunity to tear down some of those silos, and in the process, build better and quicker decision-making, more efficient work processes and a much higher employee value proposition. Each one of those things by themselves would make a significant difference in terms of the creation of tailwinds that we've been talking about. Together, I think they're extraordinarily powerful. And that expands across the activity system of the enterprise. So the potential there is significant. So I'm highly -- well, one last thing because you also referred to this. That would have been a very, very difficult task or reality to get your arms wrapped around without the advent of some of the technology that we have available to us now. So now is the time to utilize those tools and empower the organization to move forward. Each one of those functional silos that I referred to, largely, historically and even currently, has their own data repository. And there are people within each of those functions, and I mean each and every whose job is to create, maintain, extract, translate all of that data. And our objective is to make that seamlessly available to everybody on an end-to-end basis, not siloed just like the organizations are siloed. Not hard to access, and obviously utilizing the analytical and even predictive tools that are increasingly available. Sorry for the long answer, but when you ask a long question, you get a long answer.

Our next question today will come from Bonnie Herzog of Goldman Sachs.

All right. And congratulations from me, too, to both Shailesh and Jon. And Jon, we're really all going to miss seeing you, especially at CAGNY, but of course, you're always welcome. But I just had a few questions on your FY '26 guidance, if I may. First, your ranges are quite a bit wider than they've been historically. Now I certainly recognize there's a fair amount of volatility and uncertainty. But is there any other reason maybe why you have less visibility on your business right now? And then also, your guidance does imply deleverage at the midpoint. So maybe help us understand the puts and takes of this. And then finally, how are you thinking about phasing in the year? Should we assume EPS growth will be back half weighted?

I'll take a run at this, and Jon, please jump in here. On the top line, I think the reality that we're seeing is simply a lack of clarity on where the category growth is going to go. Our midpoint assumes that growth rates in the U.S. and in Europe stay about where we see them today, which is around 2%, maybe a little bit lower, in the most recent weekly data. China continuing on its path to growth. Not quite there. And Latin America and Enterprise Markets in general remaining at around 5%, 6% of category growth. So if that holds true, we think we can be at the midpoint or slightly higher. There is a scenario where the categories reaccelerate to historical growth rates. Europe and the U.S. return to 3% to 4%, China accelerates. Latin America reaccelerates beyond 6%. And that's the upper end of the range. The lower end of the range is the opposite. We see the deceleration that we saw over the last few months continue in Europe and in the U.S. China not really gaining positive trajectory. And Enterprise Markets remain muted, specifically in the Asia, Middle East, Africa region. So that's just the reality we're looking at. And it's very hard to say where in that range we're going to be. So we find it prudent to give you transparency on where the range is on the top line. Then you move to the EPS line and it's, first of all, an outcome of where we think we're going to be on the top line. But then you have incremental volatility coming from tariff negotiations that are ongoing. And again, you saw from Deutsche Bank today we saw a $400 million increase in tariff exposure. With the EU trade deal over the weekend, we saw $100 million decrease. So there's a lot of swing here from a tariff standpoint. You then have to assume what can you pass on in terms of pricing after we maximize productivity and how much of that pricing is going to be sticking in the market. And you have foreign exchange and commodity volatility that you always have. So you layer all of that on top, and you can see easily between the top line and those effects how the range is wider than we typically have. In any case, be assured, our objective is to firmly be at the upper end of the range and we work and do everything we can to be in the middle of upper range. But again, there's many factors on the macro side which we don't control, which we have to take into account.

Quarterly timing.

Jon reminds me on the quarterly timing. It is going to be an upward trajectory on EPS, as you can appreciate. Some of the pricing recovery of the tariffs will come later in the year. The category acceleration is expected to happen later in the year, so it will be an upward trajectory from quarter 1 upwards. Right. And the savings as well are coming. Obviously, the restructuring savings are coming in the second half of the year.

Our next question will come from Peter Grom of UBS.

Jon, Shailesh, congratulations from my end as well. Jon, we're definitely going to miss you. So I kind of wanted to pick up on that last point, Andre. I wanted to get some perspective from -- actually from both of you just in terms of category growth and kind of this trend line that we've seen over the last few months and how that compares to what you were expecting. And I know the team's long expressed confidence in the category growth returning to historical averages, but the timing has been a bit of a wildcard. But I guess just going back to the last call, category growth is running at 2.5%. Andre, I think you mentioned it's now running closer to 1.5%. Can you maybe just unpack what's really happening, the drivers of the slowdown? And I guess, is it evolving as you would have expected? And then I guess, just related, when you think about the guidance of flat to 3% growth, your commentary to Bonnie's question was really helpful, but how realistic is it to expect category growth to decelerate further? Is that simply you're embedding some cushion here? Or do you think that's a realistic outcome?

Look, the reason why we have a wide guidance range on the top line is exactly because it's very hard to predict where the category growth line is going to go. What we are observing is that the consumer, on both ends of the spectrum, the lower-income consumer and the higher-income consumer, they are reacting to the current volatility they are seeing and they are observing. And we see consumption trends consistently decelerating, not significantly, but we see a deceleration in the U.S. We see a deceleration in Europe. And those are the biggest regions that have an immediate impact on the global category growth numbers. The volatility the consumer is seeing, I think, is maybe not necessarily grounded in their current reality, but more on what to expect for the future. So consumers are a bit more careful in terms of consumption. They are using up pantry inventory and they are looking for value, either in smaller packs and promotions or in larger pack sizes in the club channel and online. That's the behavior we've been outlined before, but it's not stopped. It continued. So the trajectory here could be that we've reached the low point and the consumer gains confidence, the labor market is stable, inflation doesn't pick up, and therefore, we see category growth returning to 3% to 4%, or not. And that's exactly the reason why we have a guidance range that is relatively wide. Our job in all of that, and that's why I come back to where Jon started, our job is to create our own tailwinds. Our job is to create category growth, create an incentive for the consumer to return to the category and find value in our propositions every day. And these categories, even though the consumer slows down for a period of time, they don't stop doing their laundry. They don't stop washing their hair. They don't stop using diapers. That's why we're exactly in these categories. So overall, I feel good about the portfolio. I feel very good about the innovation. But there is a level of baseline uncertainty that we reflect in the guidance range.

And just to build on that a little bit, and we've talked about this before, but to the extent that people are frustrated, and I would say understandably frustrated with the lack of certainty and the breadth of the range, trust me, because there's no one more frustrated with that than I. But as you look at the predictability and you think about things like what's the impact of immigration status and immigration policy on consumption over time? What's the impact of tariffs and related both pricing and potential supply chain shifts and portfolio shifts over time? If you look at a place, what's the impact of inflation? What's the impact of interest rates? We talked about the acceleration of growth in China, but that comes largely driven by the month of June, which is a heavy promotion period in China. I don't know how much of that went into inventory and how much was actually consumed. So there's just all those uncertainties that are out there, and as Andre rightfully said, we're just trying to give you the benefit of that aggregated perspective in terms of what outcomes might be. And our job is to wake up each morning, put both feet on the floor and power ahead to do the best that we can in creating the tailwinds that we've described and seeing that impact in the market, and that's what we're committed to do.

And just one last point, I just want to reassure you, the strategy has not changed. We will push as hard as we can to generate category growth because we believe that's the only way to sustainably create value and regain share momentum. The easy answer would be to react to strong promotions we're seeing in the market with equal promotion response. That would protect share in the short term, but it would protect share of a contracting category. So you will not see us go there. You will see us continue to innovate, drive market growth. And you kind of heard the story in the beginning of the call. So that ties right into why we are where we are, independent of where we see the category going.

And to that end, every time that I interact with our organization, I remind that our job in the face of uncertainty is to step forward, not backward. And we will do that. I think the restructuring is a reflection of our commitment to do that.

Our next question today will come from Peter Galbo of Bank of America.

Congrats to Jon and to Shailesh as well. Andre, I wanted to ask maybe one clarification and then one follow-up. I believe in response to Bonnie's question, you mentioned that maybe the $1 billion tariff headwind had moved down by about $100 million after this past weekend with Europe. So I just wanted to clarify that as a first piece. And then secondly, on the $600 million within the tariff bucket that you kind of said rest of the world. Just a bit broader, but as we continue to get kind of more trade announcements, just can you help us identify how much flexibility there maybe is in that? I don't know if Brazil isn't really at a 50% rate. Is there flex for that to move? Just other kind of countries around the world that could impact that?

Thanks for the question, Peter. Yes, so the tariff announcements over the weekend indeed have reduced at face value, the $1 billion to $900 million BT. But we don't fully understand what's in that agreement yet. So I would take that with a grain of salt until we really see the details. And yes, I think there are -- it's very hard for us to judge what is real and what is not real. So we're reflecting spots like we do in commodities, like we do on FX. So we're just taking every announcement at face value and pricing it out from a tariff standpoint. I would caution us to be too optimistic that future trade agreements will be a significant tailwind. The other question here is how much of the pricing that we're taking will actually remain in market if that turns into a tailwind from a tariff perspective. So I would see the two as equalizing. So I would not view, and that's what we're telling our organization, don't assume you're getting tailwind from decreased tariffs because if the tariffs come down, most likely the pricing will not sustain in the market. So I would see those 2 as moving in parallel.

Just to give you even additional perspective on the difficulty here and to encourage you not to spend a ton of time on it, I'll just give you 2 examples -- 3 examples of the uncertainty that exists currently. And this isn't a judgment or a criticism, it's just a reflection of reality. We don't, as Andre said, really have details for these agreements. So it's hard to analyze exactly how they would impact our business. The second, there's a whole round of work that's going on under the heading of what's referred to as 232 Investigations, which are headed by the Commerce Department. And that work hasn't been completed. It's designed to assess the strategic risk that's imposed by overdependence on imports of certain goods and products. So for example, metals, but also inclusive of pulp. Within that -- wood pulp. Within that, there's the whole question of exemption from tariffs for USMCA-compliant materials. We don't know if those -- if that's going to hold under the new policies. The last piece I would mention is also very, very difficult to get your arms around, which is the potential for retaliatory tariffs, what -- these will be tariffs imposed by other countries on the U.S. That's the situation we have right now with Canada who's imposed a 25% tariffs on imports of products from the U.S. into Canada. And in our case, that ends up being a big impact, which Andre referenced in his remarks because most of our Canadian business is sourced from the U.S. So that just gives you again a little bit of a picture of the degree of uncertainty that's in there. There's upside potential within that, though I think Andre's caution is rightly presented. And there's just a range of outcomes that we're all going to have to get comfortable managing with. And the best thing I know to do in that situation, again, is step forward on those things we can control, which is exactly what we're doing with restructuring. It's exactly what we're doing with spending portfolios. It's exactly what we're doing with innovation. I'm not out there asking our innovation teams to slow anything down. Quite the contrary.

Our next question today will come from Filippo Falorni of Citi.

I also wanted to extend my congratulations to Shailesh and Jon on your new roles. So for my question, I wanted to zoom in on the U.S. market, your largest market, Clearly, we've talked about some of the consumption slowdown. But from a reported standpoint, we've also seen the impact of the inventory destocking that you talked about. I'm just curious, why do you think we've seen this more pronounced deceleration over the last 2 quarters? Because some of the comments you made about the channels that are growing faster, having lower inventory, those have been going on for a while. But really, over the last 2 quarters, we've seen a much bigger negative impact from destocking. So maybe can you give us a sense of what is happening at the retailer level? Are there certain categories that are getting impacted? And do you think that negative impact in the U.S. will continue in the first half of 26% until you cycle some of this impact in Q3 of next year?

You're right, I think the channel shifting has been an effect that we've observed for a number of months. But it also is an effect that isn't stopping. So we continue to see strength in the online channel. We continue to see strength in Walmart and Costco, in club in general, in Amazon. And obviously, as that trend continues, those retailers are more inventory-efficient so that will continue to be a headwind until that trend changes. When and if that changes is a question I can't answer. The other point, I think, that is clear, retailers have to deal with tariff impacts as well as they allocate cash and inventory. And as tariff impacts become real and hit their cash availability, they have to make choices. We are fast-turning categories. The easiest way to make a choice and reallocate cash is in our categories. So if you need to free up cash for other general merchandise, you go to CPG because we have the fastest turn, so you free up the fastest amount of cash, which is the second driver. I think the third driver is if consumption slows, a retailer would react with reducing the inventory because you don't quite need as many turns as you would in a fast-growing consumer environment. So all of those effects coming together. None of them give us certainty on to what degree this inventory contraction will continue or if inventory actually would come back over the next few quarters. I can tell you what our assumption is. Our assumption is relatively stable inventory levels going forward. But we've not made any assumption on returning inventory levels. And it's not just the U.S. and Brazil, for example, we saw a 10-point inventory effect between consumption and organic sales growth. So these effects are visible not only in the U.S. but also in other parts of the world. And again, introduce a level of variability, which is reflected in our guidance range.

And just to be clear, I'm not suggesting that you were suggesting otherwise, but in general, lower inventory throughout the system is a good thing. That leads to more efficient operations of the entire supply chain from our suppliers through to our inventory, through to retail inventory, all of which has a cost associated with it. So this is -- there's a silver lining in this as well.

Our next question will come from Chris Carey of Wells Fargo Securities.

I wanted to ask about China specifically. Andre, I think you characterized it as another quarter of sequential improvement with 618 being relatively strong. Can you talk about just the durability of the trends that you're seeing? 618 is obviously more of an annual seasonal event. But really sort of underlying durability that you may or may not be seeing in the market. And I think there is this dynamic where P&G and your peers are still waiting to assess the impact of tariffs on the economy and what it means for the Chinese consumer in the months ahead. And as such, you're perhaps a bit more measured on carrying through this improvement that you've seen in the market into out quarters. And so can you just contextualize, again, the durability versus the onetime nature that we may have seen in the quarter. And just how we would see the medium term in the context of what will be an evolving consumer landscape in China.

Everything you said is accurate, but there are some things that are encouraging. I'll give you 2 of those. One is the trend continues to be more positive. That doesn't offer any definitive perspective on what the future is going to hold. But it's not like this thing is bouncing all around. It's generally improving. Second, the Chinese consumer continues to be very responsive to innovation. I gave you 2 examples in our prepared remarks where Pampers is growing at 20%; where SK-II is growing very, very strong double digits. So it comes back to our activity system and what we do to ensure that the best propositions are available at the best value to Chinese consumers as the most important and certain way to control our destiny, which we're very focused on. But I don't see anything personally that causes me concern of another shock in the system, so to speak, but I haven't foreseen those in the past. Andre, any perspective from your...

No, I think you're right. I think the -- so a few -- I feel very encouraged about the picture in China right now. The market, as Jon says, hasn't returned to growth, but its trajectory is positive. It's more balanced across channels than we've seen in the past. It's less pronounced on key consumption periods, more in line with consumption patterns. All of those are good things. It doesn't look great in aggregate yet, but it's getting better. But the most encouraging thing I'll tell you is the progress our team is making on the ground. They have literally, Jasmine and her team, have changed every element of the business model to adopt to a different reality. They have changed the go-to-market model, including the entire distributor lineup to ensure that our propositions show up in stores better, more consistently than they ever have in the past. That is showing progress. We have adapted our media model. We've adapted our innovation model. We've adapted our customer value-creation model. All those things start to show progress, which I think I like to believe is part of the 2% growth we were able to generate. And in pockets, like Jon said, SK-II up 23%, now admittedly on a lower base, but also Baby Care consistently growing. We see pockets of real strength in China emerging. So that in aggregate makes me feel better than I felt about China in a long time.

And this is kind of neither here or there, but I lived and worked in China for a while, admittedly a long time ago, in the late '90s, but have stayed very close to that market and that organization partially as a result of that. And you can -- to Andre's point, you can -- I can tell within 5 minutes walking into one of our facilities how things are going both immediately and more broadly. And I just talked to Shailesh earlier this week, who returned from China last week, and the indications from an organization standpoint and their confidence has significantly and sequentially improved. So that's very encouraging.

Our next question today will come from Kevin Grundy of BNP Paribas.

Jon, Shailesh, I actually want to extend my congratulations to both of you as well. Jon, much to be proud of given your remarkable career. I wanted to pick up on elements of Lauren's and Peter's question specifically on consumer trade-down risk given what remains a more premium price portfolio at Procter. So the context, of course, the company has made significant progress extending pricing ladders going back to the Global Financial Crisis, Tide Simply in Fabric Care would be just one example of that. And while private label share is not accelerating, we are seeing some level of trade down. But U.S. Fabric Care would be another example of that where your key competitor leads with a value- priced offering and we're seeing share pick up there. So it doesn't seem like it may be a brand superiority issue in all cases, rather more sort of commoditization, if you will, of -- that we're seeing across staples, right, where consumers are making decisions and increasingly this is kind of weighing on category growth, in certain cases, for Procter weighing on market share performance. So can you comment on that assessment, whether you think that's accurate or not? And then just broadly on implications as you address trade-down risk in your categories? I'd appreciate your thoughts there.

Let me start with a few numbers and then I'll go into the more strategic part of that question. I think we see, I think, some level of pressure to drive trade down because of price promotional behavior. So private label, for example, volume share flat but value share down, both in Europe and in the U.S. That indicates more aggressive pricing from a retailer standpoint on retailer brands. That doesn't result in share growth, but it's certainly an attempt to drive volume and traffic into a lower-priced part of the portfolio. We also see significant promo levels in mid-tier laundry, which is driving some of the trade down. As I've indicated before, we don't think that's a winning strategy. It doesn't generally return value share growth. It might return volume share growth in the short term, but it certainly compresses the category. We also see some trade down in our portfolio. Jon mentioned this earlier from Tide into maybe a Tide Simply or a Gain. But that is part of our strategy, as you said, to serve the consumer across the price ladder and across the value tier that we choose to play in, and we need to innovate across all of those value tiers, be it Luvs in Baby Care or be it Gain and Tide Simply in laundry. I think the most important point to your question, are we concerned about commoditization, I don't think so. If you look at our categories, the consumer satisfaction in our categories is still remarkably low. Only 25% of consumers believe that they are -- or are happy with their laundry detergent performance in the wash. It doesn't come out clean enough, it doesn't come out smelling nice enough. 50% of diapers still fail and leak. Only 30% of women are happy with their protection during their period. So there's dissatisfaction and I firmly believe, and I think we all do, that the path of better innovation, better performance at adequate value is an enormous opportunity to not only grow the category, but grow our share within the category.

I think a great example of that is the test market results we've talked about on Tide evo in Colorado, where the market is growing ahead of the balance of geography, where our share within that is growing. So there's true incrementality to the proposition at a 50% premium to the average cost per laundry load. So it's just another indication of the ability of delight from a product usage standpoint and performance against specific jobs to be done that drives the category. And in terms of competitors investing and those kinds of things, innovation, communication of the benefits of that, innovation and the value of that innovation. I would much rather spend $1 on those things every day than $1 of promotion. There's nothing proprietary in promotion. So there's no long-term advantage that's conveyed. That's different than innovation-driven growth.

And just to double down on and coming full circle, we always prepare a list of our upcoming innovation just to get ourselves confident as we go into these calls. And I am very confident that we have both the technology, the commercialization ideas, the innovation that allows us to capture that dissatisfaction that consumers still have in our categories and make incremental progress that allows us to regain both momentum on category growth, but also share.

Our next question today will come from Nik Modi of RBC Capital Markets.

Jon and Shailesh, congratulations from me as well. Just one clarification and one question. On the clarification, any perspective on which categories we're experiencing the destocking during the quarter? If you could just help give us some frame there. And then the question is just kind of piggybacking on Dara's question, if you can give us some kind of specific outcomes that you saw in the test markets that you have kind of deployed this new organizational design. Anything specific that you can provide us just so we can kind of understand what the broader implications could be for the entire company?

I'll start with your destocking question. It's broad based. There's no specific category. And I think the only insight I'll give you, the faster the turn in the category, the faster the impact. But it's broad based, so no differentiation across categories I would call out.

And each of the businesses is different across categories and across markets. So I hesitate to deploy a learning from a test market. But there is some commonality in what we've learned. One is that we can operate at significantly lower cost. Each of the pilots have identified the opportunity to do that. And we've yet to supply them with the IT tools that I talked about, which will drive that even further. There hasn't been an experience that we've had in a market or a category where this hasn't been true and isn't felt with conviction, which is why the leadership team, as we went through this during primarily the month of May, was confident signing up for the restructuring opportunity that we all felt that we have as a result of this. There's another commonality, which is that -- and this was always one of the primary drivers for me, is that people are thrilled with the opportunity to have a wider impact, to have a wider scope, to be more end-to-end decision makers then components of a COGS in a factory that are trying to reach a decision in a very expensive and costly way. There are -- of course, there's a degree of concern within the organization, which is understandable in terms of just simply because we're looking to change things, and change causes a degree of uncertainty. But if you just look at those 2 things alone, if you knew that you could operate at a significantly lower cost -- and by the way, the business results in these tests have been strong. So there's little risk in that regard. If you could operate at lower cost, if you could make decisions better and faster and if people place more value in the relationship they have with the company, those are strong motivations to push forward, which is exactly what we're doing. The specific implementation of role by role, serial number by serial number will be driven by the individual leaders of those businesses. We will share with them the learnings. We have shared with them the learnings that we've gained from the pilots. We have a year-end, what we call our year-end meetings. It's an annual meeting of our leadership team here in Cincinnati in the early part of September. And one of the things we'll be featuring in that leadership meeting is presentations from each of the pilot leaders to the balance of the 250 people that lead this company on what they think is possible.

Our next question today will come from Kaumil Gajrawala of Jefferies.

Congratulations, and thank you for all your help over the decades, Jon. And congratulations to Shailesh. A question on that, maybe a little bit following up on some earlier questions was often the timing of a change like this is just related to maybe a small or maybe a large pivot in what the world is going to look like over the coming 3 to 5 years. So curious whether it's data that you had mentioned, whether it's M&A, is there a bit of a philosophical pivot or shift in any way that would be related to the timing of this? And then the second question more related to sort of the business right now is the commentary on losing or not having the superiority position that you want in some categories. To what degree is that, in many ways, just related to the last 5 years have been complicated for a whole host of things? And did that maybe limit the ability to execute this playbook which has been in place for quite some time? Or is there something else that maybe led to the lagging within those categories for where you want to be?

One example of what's occurred that hopefully provides some specificity, China built a market supply system that anticipated a lot of growth within that market. The reverse has happened. That supply is not going to go unutilized. So we see it showing up in various markets around the world, including the U.S. And to their credit, product quality is very high. So it's produced at a lower cost, at very high quality. And all of a sudden, overnight, we have a superiority gap that we need to close. So we're actively monitoring those situations. We're actively -- we have strong innovation plans designed to restore superiority across all price tiers. But that's an example much more so than an internal dynamic of too much difficulty and complexity. I don't see that being the primary driver here. And the reality is, and it's a good thing, we operate in a very competitive industry. We have strong competitors who are good at what they do. And again, that's a market constructive dynamic, which I welcome, and it pushes us to be better every day, which is a good thing. But I don't think there's anything limiting us from an internal standpoint or even from an external complexity standpoint in terms of continuing to execute this model that you rightly refer to. It's part of who we are. It's part of what we do and has become much more so over the last number of years. I forget the first part of the question.

Any pivot in direction that drove the CEO change or any pivot you expect coming out of a CEO change?

Not my knowledge.

Our next question today will come from Olivia Tong with Raymond James.

Great. Congrats to Shailesh and Jon. Jon, thank you, and you'll be missed. We've talked a bunch about the challenged state of the consumer and yet you're still seeing positive price, positive mix this quarter, this year. So 3 questions there. First, are you surprised that consumers are still mixing up and willing to accept price despite their current challenged state? Can you characterize your confidence and ability to price next year? Some color on where you see the most need because of the tariffs or increasing costs. And then just on the fiscal '26 outlook, your view on contribution from Focus versus Enterprise Markets.

Maybe I'll start with this and Andre can jump in. I'm not surprised by the consumer dynamics that you described. It was inherently part of the decision we made when we concentrated our portfolio into daily use categories where performance drives brand choice, performance being a significant contributor to value. Value, holistically defined, is much more than price. And I expected that as we made these moves and this shift, that we'd be even -- and continue to innovate, that we'd be even more resilient, which largely has occurred. The second is if you just look at price as a component of our top line growth, over long periods of time we've been -- price has been a positive contributor to that top line growth. I think it's close to 20 -- 19 out of 20 of the last years the combination of price and mix has been a positive contributor. The same occurs at the quarterly level. So this is part of the model of an innovation machine that operates in categories where performance drives value. In terms of future pricing, given that past history, given our commitment to innovation, given what Andre described in the innovation pipeline, I don't see any reason why historical patterns don't play themselves forward. And if you think about something like Tide evo, there are many other examples. If you just look at the growth of both ends of the Oral-B business, the high-end iO 10 and the entry price point on iO 2, which is a significant step-up in terms of price versus a manual brush, and then to iO 10 is an even more significant price to participate in that product segment. They're growing extraordinarily well. So I don't ever like to overly simplify things, but I really, really, really believe that superiority in terms of product, package, communication, go-to-market, value holistically defined is primary. And as long as we do that well and better than others, we're going to be in great shape and we'll be serving consumers at a very high level. If we fail to do that, then all bets are off, which is why you see us being very proactive on creating the financial flexibility to continue to do exactly that. So that's how I look at this dynamic. I think we're better positioned than almost any other company. I don't really think about it that way on a daily basis. I think about are we better positioned today than we were yesterday and will be better positioned tomorrow? I feel good about all of that. That doesn't mean there won't be challenges. You've seen challenges. It doesn't mean that competitors won't outcompete us in certain categories, in certain markets, in certain days and months and quarters. But it's pretty strong reassurance that our commitment to that approach should be pretty strong reassurance that this should be manageable.

Second part of your question, Olivia, Enterprise Markets versus Focus Markets, at aggregate level, I expect both to perform similarly in terms of top line growth and bottom line growth in the year. Obviously, within the Enterprise Market bucket, there's a lot of variability between markets. Turkey has returned to 17% organic sales growth. India is still growing at 5%. Still significant challenges in the Middle East. But you allowed me to do it at aggregate level, at an aggregate level, we should be fairly consistent between the 2 segments, Focus Markets and Enterprise Markets.

Our next question today will come from Robert Ottenstein of Evercore ISI.

Congratulations all around from myself and Javier Escalante. Most of my questions have been answered, but one thing I would like to drill down into a little bit is kind of the difference between value and affordability. Obviously, the superiority emphasis makes all the sense in the world. You want to give consumers more value, and that has worked. You've touched on affordability. But I guess the question is, number one, is this a consumer that really wants and needs more affordability, and there were some comments around that and some, I guess, behavior suggesting that. And then the -- I guess the most important question is do you believe that as an organization and how you look at the markets, look at the consumer, look at your innovation that perhaps you need to or it would make sense to focus a little bit more on providing superiority that is more affordable for consumers?

Make a couple of comments there, Robert. Thank you for the question, I think it's an important one. Affordability is a relevant concern. We get at that in a couple of ways. One is making sure that we have a pack size that meets dollar outlay capacity at the consumer level. And that becomes even more important in the environment that we're in. So in that context, an overdependence on large sizes, large pack sizes can be a problem and work against you from an affordability standpoint. So we're very attentive to that. The second is once you get beyond dollar outlay and the capacity to outlay that dollar, it really does come down to an understanding of the benefit that I receive to understand whether something is "affordable" or not. And it's all a relative comparison across categories, across brands. So ensuring that we have clarity, when we talk about advertising, for example, and by advertising, I mean that in a broadly defined way, in other words, advertising; package; shelf; communication, in-store or online communication. We're trying to emphasize 2 things: performance and value. And I'm not really interested in the current environment given that the accurate situation you described of entertainment and a lot of other things. We want our ads to be as entertaining as they can be, but not to the extent that they compromise right to the heart of the matter performance and value message. The third thing is, yes, you're right. We should be, and are, aggressively looking at ways to create more affordability through the innovation lines. And that's true on package. Can we identify formulas that are more efficient from a cost standpoint but still deliver ideally and deliver higher levels of performance? Can we -- are there opportunities from a packaging standpoint that allow us to reduce cost? Are there opportunities from a manufacturing standpoint that allow us to reduce cost? All of those things we're very, very actively focused on and we'll continue to be. I think there's a misperception that occurs sometimes, which is our fault, that when we talk about superiority, we're talking about premium. That's not how we think about it. We think about it as having the best offer in the price tiers in which we choose to compete. And someone earlier mentioned pricing ladders, we're very intentional in trying to fill out those ladders so that there is an affordable proposition for different groups of consumers. So thanks again for asking that question. It's a very important one.

Our next question will come from Andrea Teixeira with JPMorgan.

Jon, you will be missed. And congratulations to you and Shailesh and the respective families. As you correctly pointed out, this is a family company, 2 families. Impressive results all over these years. I have a question and 2 specific clarifications on fiscal '26 guide for both of you. I guess, Jon, starting over the years, my question is like more stepping back from a strategic standpoint. You mentioned that consumer health is an area that you felt P&G was punching below its weight. Did that change? And if not, would that -- would be the growth be organically mostly or M&A based? And then second on the clarification side, within your fiscal '26 EPS guide, are you adding back any tariff mitigation efforts to the $800 million headwind after taxes? And would that mitigation become the upside for the midpoint if that's not included? And related to that, the 2-year restructuring savings was -- were it added to the fiscal '26 or will be mostly felt on a net effect on the fiscal '27?

So I'll let Andre handle those last 2 questions, Andrea, and then I'll come back to your question about Personal Health Care.

So Andrea, I think the short answer is the midpoint of headwinds and mitigation is included in the midpoint of the guidance range. And on the productivity savings, they will materialize beginning second half of fiscal year. But we're working through the program details, and as you can appreciate, execution will have to be diligently planned. So as we gain more visibility to the CPS by market, by legal entity, by project, we will give you more visibility to the timing of those savings. Rough cut, would say, building up towards the second half of the year.

And on your question on Personal Health Care, that continues to be a strong focus area for us. It's been a business that's performed extraordinarily well even in the context of a light cough/cold season in the most recent year. We have been clear that there is significant opportunity for organic growth within that portfolio. And the last several years, double- digit growth has been driven by organic innovation and geographic expansion. So that will continue. We also have been clear that there are a couple of categories that we currently compete in where we might be interested in acquisitions if they offer an opportunity to significantly improve the growth rate and margin structure through both revenue and cost synergies. That's what we did when we purchased the German Merck portfolio of OTC products. We're very happy with that acquisition. It's paid out extremely well. It's built capability, both from a supply standpoint and a commercial standpoint. So we'll continue analyzing opportunities that are presented to us. I expect that the future of Personal Health Care will be bright and it will be driven both organically and opportunistically through some level of acquisition.

And your final question today will come from the line of Robert Moskow with TD Cowen.

Okay. We're going to finish strong here. Congrats, Jon. But I'm hoping to ask the same question everyone is asking a little more directly about the U.S. Are you going to be raising prices more this year in the U.S. than you did in fiscal '25? I would think it would be a necessity given the tariffs. And then secondly, there's a very wide range in your guidance for top line. Is there also a wide range of scenarios on the pricing embedded in that? I would think that would be where there would be a high degree of uncertainty given the moving target on tariffs.

So the pricing on those SKUs that are impacted by tariffs, largely in combination with innovation, is mid-single digits in the U.S. and that's about 25% of our SKUs that are impacted. That is not vastly different from what we typically take with innovation, a couple of points higher to account for the tariff impact that we can't offset with productivity. If you average out the pricing across the entire portfolio, we're looking at about 2.5%, broadly in line with where inflation is trending, so also not too disruptive. And as I mentioned before, the variability on the pricing is part of the range on the top line. If the pricing is holding, if the pricing is supported by the tariffs actually being implemented, then that supports the upper end of the guidance range. If the pricing needs to be rescinded or spent back because the tariffs are coming in differently or for other reasons, that would lead to the lower end of the guidance range. So it's built in. I don't think it's the biggest variability in the top line. I think it's one factor. I think the underlying consumer strength is still the biggest unknown that we're dealing with here.

All right. I think that brings us to a close here. I want to just make a couple of comments reflecting on the conversations that we've just had. First, as Andre already said, but I just want to make sure it's registered, our ambition is to deliver at the midpoint to the high point of these guidance ranges. I believe, though I've always been guilty of this, that there are more opportunities than there are challenges. And that's both in the near term, but certainly in the long term. I tell our Board of Directors all the time, this company has never faced more challenges than it currently does. That's the bad news. The good news is we've never had more opportunities than we currently do. Getting ahead of ourselves in that regard in month 1 of 12, particularly given how things developed through last fiscal year, is probably not a prudent approach and probably doesn't serve you well. So that's kind of the summation of this overall discussion. We'll stay close and make sure that you're learning as we're learning, and we have many opportunities to do that as the year progresses. I have tremendously enjoyed, in most instances, my interactions with each of you and your constituents. You play a very important role in helping people make very important decisions in their lives. And you're a steward, in many cases, for the resources that they utilize to support their families. So I thank you. There's been a lot of thanks and congratulations extended my way, but I offer the same in return. And we all look forward to interacting with you, hopefully narrowing these ranges as we learn more and having a very good year in the process. Thanks a lot.