Gross margin contracted 100 basis points to 48.9% of net sales
in 2014. The decrease in gross margin was primarily driven
by a 150 basis point impact from unfavorable geographic and
product mix, a 50 basis point impact from higher commodity
costs, and a 90 basis point impact from unfavorable foreign
exchange, partially offset by manufacturing cost savings of 190
basis points and a 40 basis point benefit from higher pricing.
The unfavorable geographic and product mix was caused by
disproportionate growth in developing regions, and the Fabric
Care and Home Care and Baby, Feminine and Family Care
segments, which have lower gross margins than the Company
average.