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All right, P&G out with its latest results. Company cutting its full-year outlook. Let's get right to P&G chair and CEO Jon Moeller. John, always nice to get some time with you here. Let's start right off the jump here on this guidance. What what made you cut it? And what are you seeing in the business?

Okay, so I'm going to step back a little bit and then bring you forward. Um, consumers are facing around the world, uh, an unprecedented level of uncertainty. Uh, but if we think about, um, the causes of that, you've got immigration status, employment status, tariffs, prices and inflation, interest rates, uh, social and political divisiveness, wars, uh, and significant economic pressure in some large markets which is creating a bit of a crisis and consumer confidence which you see reflected in the consumer confidence polls and indices. Against that backdrop in the quarter we just completed, we grew. Uh, we grew the top-line modestly. Um, seven out of 10 categories grew. Importantly, the 38th consecutive quarter of top-line organic sales growth, also grew the bottom line. Core earnings per share, um, looks like this will be the ninth consecutive year of core earnings per share growth. So very dependable growth on both the top and bottom line. From a dividend standpoint, we just increased our dividend by 5% a couple of weeks ago. Uh, that makes it the 135th consecutive year this company's paid a dividend. The 69th consecutive year we've increased the dividend. As we go forward, we expect that uncertainty that I referred to and the volatility that accompanies it to continue. And against that backdrop, uh, we've chosen not to blink, not to flinch, but instead, uh, commit ourselves to investment continued investment in innovation and demand creation for our brands. We believe that's the best short-term and long-term approach to maintain the health of those brands and the growth of the business. We modestly reduced guidance to 2% on the fiscal year for the top line. Our fiscal year ends in a couple of months. And 2 to 4% on the bottom line to reflect that approach and that choice as well as to reflect this fiscal year's impact of tariffs.

John, how much how much of a tariff impact is in the in this new guidance? Can you quantify it for us?

Well, again, it's just for this fiscal year. Uh, we have two months left. And we're forecasting a range. Of course, it changes every day, but a range of about 100 to 160 million BT. Uh, that's before any, you know, actions that that's a gross impact before any actions are taken to offset that impact.

Where are the tariffs impacting your business?

Our business model and the economics of our industry incent production proximate to consumption, uh, which we largely do. So it's not so much a finished product import issue into the US. We do source ingredients though from different parts of the world, ingredients and materials. Uh, so there's a there's a tariff impact on that importation. Some of those, you know, we don't have an alternate source for. If you take something like Metamucil for example, its main active ingredient is psyllium husk, which is grown in a smaller region in India exclusively at the yield levels that that we need to make to have it make sense. And so we'll be paying likely a tariff on the importation of that material to produce the global supply of Metamucil, which is manufactured in a plant in Arizona. Uh, also, there are retaliatory tariffs. So most of our Canadian business, for example, is sourced from the US. And because of the back and forth on the tariff discussions and negotiations, we're now going to be paying a tariff on the importation or the export of those goods from the US to Canada.

John, now you P&G manufactures in the US, 24 manufacturing sites in 18 states. Now, can you take that husk from Metamucil that's being made in India and bring it back to the US to grow a farm next to a plant so you can make the products here in the country? And then, if not, how do you how do you reformulate products?

Uh, in that case, we're going to have to find another way to deal with it. There isn't the climate opportunity in the in the United States to support again the yield levels that would be necessary on that on that kind of crop. Um, so so you know, um, localizing that isn't isn't an option. We need to find other solutions. Um, and those would include obviously unrelated cost reductions. They would include potential pricing. Um, so we're looking through all of those options as the tariff landscape hopefully develops some certainty and and clarity.

Does this moment in time make you, I guess, take a step back, John, and and say, hey, you know what? Maybe I should open up five more plants in the United States.

Well, as I mentioned, we're producing very close to consumption currently. So 90% of our finished product sales in the US are produced in the US. So for us, it isn't so much a matter of moving factories. We've invested, if you go back to 2017, I cite that year because that's the year of the major tax reform act which lowered rates significantly and increased the attractiveness of investment in the US. We've spent $10 billion on capital, manufacturing capital. We've added 6,000 people. Um, and we've increased the starting wage by 30%. Importantly, this is very important, we're paying more tax today than we were yesterday as a result of the growth that's ensued from those investments, $2.2 billion to the US last year compares to about $1.6 billion prior to the act. And that that, um you know, policy environment, which makes American companies competitive in cents production and importantly the creation of IP here in the US has been a has been a wonderful thing. Uh, if you just look at that same period of time on a global basis, this company has grown the team is grown sales by $17 billion, 85th percentile in the S&P 500. We've grown profit by $5 billion, 93rd percentile in the S&P 500. Not bad for an old economy soap company. Uh, we've created $200 billion in market cap, which is more value creation in a 6-year period than any of our competitors have delivered. Most of them are foreign domiciled, have delivered over the last century or two, their entire histories as a company. So when we get the policy environment right and we marshal the assets that we have um, and and the operating environment that we generally have in the United States, really good things can happen. And we're assuming, you know, that the last 38 quarters of consecutive top-line growth continue as we go forward. We're assuming that the last 9 years of core earnings per share growth continue as we go forward. And, um I have high degree of confidence in our people, in our innovation program, which we're maintaining investment in, in our demand creation program, which we're maintaining investment in to continue the growth in value creation, albeit in a in a different, potentially more complicated environment.

Now John, the leaders of some major retailers that you sell products to, Target and Walmart, met with the Trump administration earlier in the week. And some reports out of that suggests we might be headed to a situation within weeks of potentially empty shelves at major retailers. Level set for us here. Are there certain products that P&G won't make anymore because of the tariff situation? And we might see empty shelves?

You're going to see our products on shelf. Um, but again, our our supply chain situation is different. It's largely localized than than some other categories. Um, so whether will be choices that are made in terms of which products, the small number of products that are shipped into the US, will we continue to ship those in or not? And that will just depend, you know, we'll know more, I guess by July 8th, I think is the end of the 90-day window, and we'll be able to assess that better. But I expect P&G products to be available every day on shelf for consumers in whichever channel they choose to shop.

Starling stat John just hit about a week ago that consumer confidence, the second lowest level since 1952. I mean, I wasn't even a thought, John. Like, I was I was out there. Maybe my parents were out there in the ether sphere or something. I mean, in this in this backdrop, are you seeing consumers trade down? And then I look at the results in the fabric care business and they were they were flat. Not only are they trading down, but also adding a little extra water to their Tide to make it to the end of the week.

So we're not It's encouraging thing. We're not seeing trade down. Um, if we look at private label shares as a proxy for trade down, they're down in North America, they're down in Europe. If we look at shopping within our own brand portfolios, we don't see a lot of trade down. In fact, the fastest growing portion of our portfolio is typically the premium end where performance is best. And we operate in categories where performance drives brand choice so that that makes sense. What we are seeing, uh, to the second part of your question, is a reduction in consumption. Um, and we have, um these wired homes with the permission of consumers, where we can track exactly what's happening in the laundry room, for example. How many loads are done per week? Uh, what temperature are those loads done at? Et cetera. And what you see is a is a reduction in the number of loads that are done per week currently, going from about If you go all the way back pre-COVID to about five loads per week to now about three and a half. Uh, so that's what's driving the the the the the slower market growth, still growing, but at a slower rate. But there are many opportunities within that for us to thrive, ensuring that when loads are done, they use the full complement of products, which maximize the delight and the result from that job. Ensuring that dosing is adequate to deliver the result that the consumer is looking for, et cetera. Uh, so as I mentioned, you know, we're going to continue to to innovate to ensure that we have products that are not only fit for use, but create delight in use in the in the current stressful environment.

Well, for what it's worth, John, um, if my home was wired, it would show that I'm still using the same amount of Tide to clean my underwear and socks. I mean, I'm just skewing the data here, John. I'm skewing it for you. Good to get some time with you. I appreciate these truthful answers to these questions. I know challenging times for a lot of CEOs and a lot of big companies and consumers. P&G chair and CEO Jon Moeller, we'll talk to you soon.

Thanks.