Good morning, welcome everyone. My name is Chelsea. I'll be your conference operator today. At this time, I would like to welcome everyone to Coty's third quarter fiscal 2023 question and answer conference call. As a reminder, this conference call is being recorded today, May 9, 2023. Please note that earlier this morning, Coty issued a press release and prepared remarks webcast, which can be found on its investor relations website. On today's call are Sue Nabi, Chief Executive Officer, and Laurent Mercier, Chief Financial Officer. I would like to remind you that many of the comments today may contain forward-looking statements. Please refer to Coty's earnings release and the reports filed with the SEC, where the company lists factors that could cause actual results to differ materially from those forward-looking statements. In addition, except where noted, the discussion of Coty's financial results and Coty's expectations reflect certain adjustments as specified in the non-GAAP financial measures section of the company's release. With that, we will now open the floor for questions. If you would like to ask a question, please press star one on your telephone keypad. If you find that your question has already been addressed, you may remove yourself from the queue by pressing star two. Once again, that is star one to ask a question. We'll pause for a moment to allow questions to queue. Our first question will come from Steve Powers with Deutsche Bank. Your line is open. Thank you. Good morning, everybody. I guess my first question, just to clarification on the commentary on first quarter 2024 pricing. Both the press release and the prepared remarks, if I heard correctly, sort of, you know, coupled those pricing comments with your efforts to transition the portfolio to cleaner, more sustainable products. I guess I was looking for a little bit more detail. Is that to cover the cost of that transition or are there other factors at play as you consider that round of pricing early next year? Yeah. Hi. Hello, Steve. Thanks for your question. First of all, I mean, just to remind that indeed we implemented price increase, I mean, over the last quarter. The last one being end of Q3, which indeed is absolutely needed to mitigate, I mean, cost inflation. As you've seen in Q3, which is above 2% and we expect in Q4 to be 2% to 2.5%. Now indeed, yeah, we are evaluating a new price increase in Q1 2024. As we explained several times, I mean, we always make sure that we do it in a granular manner. Definitely we are making sure that it's always synchronized, you know, with value creation. Sustainability is definitely, you know, one of the biggest, you know, element that we are putting in place, you know, to create value. Concretely is what we are currently implementing is to bring, you know, a majority of our portfolio to a carbon neutral ethanol for end of calendar 2023. It's really focused on this value creation that we share between Coty, retailers, and consumers. This is one stream, of course there are a lot of other elements on value creation, which are about innovation and high quality products we are bringing to the consumers. To be very specific, give you also concrete example on consumer beauty also, where we are now developing, you know, clean formulations, which are, you know, now as we speak, COVERGIRL is a concrete example. As you know, this is the DNA of the brand, and there will be more and more initiatives with clean formulation in the coming quarters. Okay. Very good. Actually, Laurent, while I have you talking too, I'm sure you'll get questions from others. Laurent, on cash flow, you know, as you mentioned, Q3 usually seasonally, you know, weaker or negative because of seasonal elements. Q4 is also not typically a super strong cash quarter for Coty. I think, you know, given where you are in the year and given your guidance, you know, it implies, you know, maybe a little bit more robust cash flow generation in the fourth quarter than at least we were expecting initially. Can you talk us through the moving parts and and your confidence in Q4 cash generation to get you to the full year guide. Thank you very much. Absolutely. I mean, I confirm, you know, with full confidence that we deliver the year, you know, with cash flow above $400 million. That's absolutely sure. Just to explain a little more on Q3. You're right that Q3 is always, you know, seasonally weaker. The basic reason is that indeed the investment that we are doing in Q2, which is a big season, we are cashing out in Q3. That's always the cash cycle that we're having. Another element that I really want to bring to your attention is that also we are rebuilding inventory end of Q3. This is really a conscious choice, conscious decision that we are making and is again in control, you know, with delivering the $400 million, so that we are really in a good position to secure Q1 and Q2 season. Okay? This is really what we are monitoring and you saw it's really, you know, synchronized with the improvement of service levels that you are currently seeing. Q4 will be positive, and we will end fiscal year 2023 with a cash flow above $400 million. Year to date, as you noticed, is $365 million. Okay? We keep really the cash generation well in control. Thank you. Our next question will come from Anna Lizzul with Bank of America. Your line is open. Hi, good morning, and thank you so much for the question. I was wondering if you can comment on the launch of Lancaster in China and how this compares to your expectations on skincare. China has seen a nice acceleration in fine fragrance penetration. How are you engaging there with consumers in this category versus on skincare? Thanks. Yes, good morning, Anna. This is Sue speaking. Thank you for the question. Indeed, China has been very active for Coty during this quarter, specifically at the end of the quarter and of course, during Q4. We started our skincare, you know, strategic bet in China a few weeks ago, and I can tell you that we are very happy about the very early results we are seeing behind Lancaster. You know, skincare is about R&D formulations, efficacy, how consumers see your formulations. I can tell you that the ratings are outstanding, you know, 4.9 out of 5. This is really unseen on this very competitive, where consumers are very demanding. For a brand that was not doing skincare in China just a few months ago, these ratings are, I would say, of great confidence for us. We read fantastic things about how consumers in China are seeing already results for those who shop the line in France there, you know, just a few weeks ago. This is number one. The number two is that of course, we are creating the awareness of the line in China. As you've seen it probably during the presentation, we were number one in terms of social buzz in China, which is again, I would say an exploit, as you say in French, and this is in the middle of a very, very noisy environment. Everyone is trying to get through the noise of the Chinese market in terms of beauty brands. We were number one during the launch period, and we continue to see very qualitative comments on the line. You've heard that some consumers call the cream the Kelly cream, which is a reference, of course, to Grace Kelly, which is great for us because that's a great summary of the high quality, the exclusivity, and of course, the European, you know, origin of the brand. Last but not least, when you look at what's happening at the counters, we've seen, you've seen the first Hangzhou counter that opened, and we were there, you know, a few weeks ago in China. You see that the conversion is as high, if not above, some of the leading brands, which gives us a great, great confidence. Now the job is to increase the traffic. You know, at the end of the day, when you have the formulations, when you have the right word of mouth, when you have a very high conversion, what takes is that now you need to create this traffic, you know, across our counters on Tmall, et cetera, to increase the size of the brand. It's really starting exactly where we were dreaming it to start and the way we were dreaming it to start. When it comes to the fragrances, you know, the fragrance index is also at play in China. You know, I took advantage of my visit to China to visit some consumers at home, you know, fragrance buyers, be it entry prestige or entry premium fragrances. I can tell you that I was incredibly surprised to see the level of expertise of consumers. In a way, they were telling us that this category today is more or less seen as almost the skincare category. It's a high value category. It's a category that's becoming performance driven. Everyone is obsessed with what they call lingering scents, which means long-lasting scents. People are more and more moving from heritage and traditional brands towards niche, very conceptual brands that tell them a very unique story, something that they can speak about on social media to valorize who they are. In a way, for a company like Coty, between fragrances, where we are starting from a low base and we have a huge upside in front of us, remember, the penetration is 3% to be compared to 50% in Europe. There is a huge potential in the country. Plus the fact that we have the right brands to operate there. Next to this, we have our skincare, you know, adventure that's starting right now. I think the upside can be very, very strong for Coty. Thank you. Our next question comes from Robert Ottenstein with Evercore. Your line is open. Great. Thank you very much. 2 questions. One, I wanna follow up on fragrances. You know, it looks like you're getting an acceleration in the quarter in the fragrance category. Is this driven by any specific brands or is it more broad-based? The second question is on the consumer beauty side, which continues to be very strong. You know, what is fueling that continued momentum? Thank you. Thank you, Rob, and good morning. Yes, indeed, we are seeing clearly an acceleration. You know, this famous fragrance index that I have been referring to since a few quarters now is not only, you know, continuing, but it's accelerating. You know, fragrances, you know, in the speed division, the growth of the division was 16%. Fragrances are around 20%. It's a very, very strong growth that we are seeing behind this category while still continuing to recover on the service level. Clearly it has to do with one hand with service level improvement, but also and moreover, I would say consumer demand has accelerated. Indeed, this growth is very broad-based between the different brands. You know, all the brands are doing their job, and they are all fantastically, you know, posting a strong double-digit growth, be it Burberry, Hugo Boss, Chloé Atelier des Fleurs, that's becoming, you know, a bestseller line in Asia, of course, Gucci fragrances. This is clearly something that gives us a strong confidence that we have, you know, the right portfolio to answer the different consumer psychographics, either in terms of pricing, but also in terms of what they are willing to buy in terms of brand universe and equity. On consumer beauty, it's clearly also a division where we are continuing to see a very strong momentum. Our cosmetic brands are all growing double digits, really, you know, be it COVERGIRL, Max Factor, Rimmel, to name the biggest brands. This clearly is a great demonstration of the work we've been doing. Remember, I always said that we were fixing with what we had in hand since two years now, two years and a half, and now we are starting to show to everyone what is the ability of this company to create really breakthrough innovation. Yummy Gloss from COVERGIRL is one of them. You know, it's number 1 lip color launch in the U.S., number 5 cosmetic launch in the U.S. this spring. Clean Tosya by COVERGIRL that we just announced a few days ago, I think this is going to be a massive success in this very strong, you know, area where COVERGIRL is strong, which is mascaras. We are seeing more or less the same thing behind Rimmel in U.K. with Thrill Seeker and Max Factor that's having a 30% Q3 growth excluding Russia, which is really unprecedented for this brand. I can tell you that cosmetics are doing fantastically well, but also our fragrances. I don't know if you're aware of this, but a brand like bruno banani on our prestige division in DACH, you know, is as big as Hugo Boss. It's a really, really big property, and this one is also growing double digits. The fragrance index is also at play in our consumer beauty business. To confirm what you, in a way, what was embedded in our question, growth coming from both divisions, from all the brands in both divisions, and the fragrance index is only accelerating. Thank you. Our next question comes from Filippo Falorni with Citi. Your line is open. Hey, good morning, everyone. A follow-up on China. You mentioned in the prepared remarks that April sales, including Hainan, increased year-over-year and also on a two-year basis. Does that mean that your inventory levels are now in a normal position and that you're growing in line with consumption? Do you assume some carryover impact from normalizing inventory in fiscal Q4? Longer term, just any kind of target you can give us in terms of the Lancaster launch, where do you think the brand can get to within the China skincare category? Thank you. Yeah. Good morning, Filippo. Indeed, you are absolutely right. April is we are seeing some acceleration in April, so higher versus last year and higher versus 2 years ago. To be very clear, this is really a pure organic performance, okay? This is a level of inventory with our retailer is very healthy. Definitely the growth is driven by all initiatives that Sue has just mentioned. Definitely, skincare, Ligne Princière, Lancaster, all the plans we are putting in place. It's second, premiumization, you know, high-end fragrance, acceleration. Chloé Atelier des Fleurs is a clear example. We have also great initiatives on cosmetic, on prestige cosmetic with the two launches we made on Burberry Foundation and the Gucci Foundation, which are a very, very good start. This is, you are seeing that we are building the foundations of the new model in China. The strength for Coty, as you know, that we are starting from a low base. Again, there is no, you know, retailer inventory and so on, you know, going against. This is really pure incremental. This is also the case on consumer beauty, where we have also fantastic and great initiatives on adidas, which are really starting now and accelerating. This is again, keep the word of, you know, building the foundation and sequential acceleration for China. Filippo, good morning. This is Sue speaking. On Lancaster, it's very clearly targeted. In fact, you know, this is a business where you need to create where you are present, meaning in the brick-and-mortar stores and of course, on the online store, the recipe for success. Again, the recipe for success is about consumer ratings, social buzz, and conversion. When we will feel that we have the right level of consumer base, the right level of conversion and the best in class ratings, this is when we will decide to expand the distribution, you know? At the end of the day, the strategy is still the same. We have three brands, Lancaster in China, or these that are going to be also starting in China, in the U.S., and in travel retail. Philosophy, which is the biggest skincare brand we have today at Coty, that started its reinvention a month ago here again. You've seen the fantastic advertising behind the latest serum, Bird of Wisdom. These three brands will allow us to go to the $500 million in the coming years in terms of target for our skincare business. Thank you. Our next question will come from Korinne Wolfmeyer with Piper Sandler. Your line is open. Hey, good morning, all. Thanks for taking the questions and congrats on the quarter. I'd like just to kind of touch on the margin guidance for the year and some of the puts and takes behind that. First you talked about, you know, slight growth margin expansion, but also you didn't really raise the EBITDA guidance for the year. Can you just talk about where maybe some of that pressure is coming through? I know you mentioned FX and maybe some higher A&CP. CP spend, can you just talk about, you know, what we should expect for Q4 there? Then as we head into fiscal 2024, how are you kind of thinking about the puts and takes of the margin structure there? Thank you. Yeah, absolutely. Indeed, we are confirming our full year guidance on the EBITDA, so $955-$965. To answer your point, I mean, this is despite about $50 million FX headwind. This is, again, guidance that we gave beginning of the year. Despite this headwind, we are really in a position to confirm. At the same time, which is absolutely key, is also to reinvest in our strategic initiatives, and we mentioned a few, especially in China. Definitely our equation is fully in control. Concretely, it means that our EBITDA margin will grow 50 basis points at the end of the year, and even our EBIT margin will grow 150 basis points. You really understand that we are monitoring our equation in an accretive manner. This is definitely the way we allocate the resources, fueling the growth but also delivering, of course, a profit objective. I will add one important element to this, is that as you saw we are increasing our EPS guidance by $0.03. With the swap, the guidance is now to end the year at $0.52-$0.53, which is, you know, close to 80% EPS increase versus last year. If we exclude the swap, the guidance is $0.48-$0.39, which is about, you know, more than 30% EPS increase versus last year. Definitely you see, I mean, a significant improvement in our EPS guidance. Now definitely looking forward for fiscal 2024 and we will give you more detail in next earnings call. I mean, we confirm, you know, the midterm algorithm that we shared a few months ago and that we reconfirm during CAGNY, is really to have net revenue growth, you know, at the upper end of the 6%-8%. EBITDA growth in the range of the 9%-11%. EPS growth, you know, 23%-26% in the mid-20s. Thank you. Our next question comes from Ashley Helgans with Jefferies. Your line is open. Hi, this is Sydney on for Ashley. First question was just any by category trends you can kind of call out in China and travel retail. Just with the strength in the mass category, you know, any potential signs of trade down that you're seeing at all? Thank you. Again, thank you for your question. Any sign of trade down, the answer is no, clearly no. We are not seeing any sign of trade down nowhere. We are in fact seeing even the opposite, the continuous premiumization be it in consumer beauty with what we call cool beauty, which is this beauty that is at a premium that's very cool and that's very trendy on social media and where COVERGIRL is starting to participate finally, which is really, you know, the phase two of the reinvention of this brand. By the way, the reinvention of all our consumer beauty color cosmetic brands. When it comes to prestige categories, we are continuing to see, you know, the fragrance index at play. There is a globalization of the fragrance index. You know, it started in the US, and then now it's in Europe and in China, which really is the best, I would say, news for us and for the industry, as you can imagine. This category is premiumizing and becoming the darling category of many consumers around the world. Skincare continues to be the queen category, you know, growing, you know, at a kind of good growth, not crazy, not low, good growth, which has always been the case with skincare since I'm doing beauty, which is almost 30 years now. This category you know it's the biggest category worldwide, and this is where we want to play now. Last but not least, we see color cosmetics back in consumer beauty quite strongly, specifically in the U.S., but also around the world, with different subcategories growing, be it lipstick, where Gen Zs are back to lipstick. This is also something that's new, but also the classical foundation and mascara category. No signs of trade down. All the categories are growing. Premiumization and fragrance index is accelerating. That's, I would say, the summary in terms of what we are seeing globally in terms of categories penetration. Thank you. Our next question comes from Chris Carey with Wells Fargo Securities. Your line is open. Hi. Good morning. Just two quick questions, please. Just number one, can you just talk about, you know, the consumer beauty profitability and, you know, how you see that trending going forward and just how fiscal Q3 or, came in relative to your expectations? The second question is, I think there's been, you know, a couple questions kind of around this topic, you know, there was a comment in the press release around, you know, more investment, you know, into your skincare and that the revenue benefits from that investment would take some time to play out. Is that in line with your prior expectations or is the skincare opportunity just taking a bit longer to develop? Sounds like you still have the same goals over time, but perhaps the phasing is changing. Just any clarity there. Thanks for those on, you know, consumer beauty margins and, you know, the pace of skincare investment versus revenue over time. Thank you. Sure. Thank you. Thank you, Chris, for the question. Coty profitability, I mean, consumer beauty, I mean, is a very profitable business, maybe your question is more about Q3. Q3 is always, you know, the quarter where we have significant investment for consumer beauty. This is really the quarter where we have big launches, so we are investing. And, again, it's fully included, you know, in our equation and in our quarterly equation. Bear in mind that definitely all the initiatives that we are putting in place on consumer beauty are, you know, very accretive, gross margin accretive. Sue, you know, shared a few initiatives completely that, you know, initiatives we are making, we are launching currently on COVERGIRL. I mean, these are very profitable initiatives. Definitely the flywheel in consumer beauty is absolutely in motion. Sue explained that it means, you know, the first two, three years we had to do the work, you know, with what was in play. Now definitely there is some strong acceleration in top line, but also in profitability. There is very strong ROI from all the initiatives that we are putting in place. Profit and margin will expand, should expand in fiscal 23 and beyond exactly based on what I shared with you. Last element, which sounds a little more technical, is also that in Q3 we had to face some one time Forex impact mostly from LATAM, which was, I mean, mostly on consumer beauty. Again, going forward, I mean, the flywheel and the model consumer beauty is very profitable. On your question, I can start and Sue can build up on this. We made very clear that indeed, in our balanced portfolio, skincare is really a strategic imperative. We are investing, and this is indeed fully included in our model and in our flywheel. What we just kicked off with Lancaster and Clinique, what we are doing currently also in U.S. with Philosophy. I can tell you from a really finance and marketing and commercial teams, we have very precise KPIs that we are tracking so that we are really in a position to measure ROI, also to put corrective measures if needed. Definitely, I mean, ROI is there, and definitely step by step, we are building a profitable business. Keep in mind that gross margin on skincare is also very accretive. If indeed I can complement what you said, Laurent, the reality is that it's too early to tell you if, you know, we are doing faster or less fast than what we had in our minds. We just started a month and a half ago, and the KPIs I've been sharing with you are excellent. This is really the basis. You know, you can do whatever you want. If you don't have the right formulations, if consumers do not find your brand interesting, and if the conversion at counter is not good, there you have issues. It's not absolutely the case. Remember, we've been very clear from the beginning that the strategic emphasis is on driving a balanced growth agenda accretive in our portfolio, which includes the imperative to develop our skincare business in the coming years. Again, we continue to be very confident in this strategy because we have the technical, technological know-how, because we have the patents, and because we are putting in place, continuing to put in place the organizational capabilities. Of course, this requires upfront investment, you know, and that's clearly the name of the game which we are making now. The great news is that we're lucky to be in a position where the rest of the portfolio is growing very strongly, which allow us both to deliver on our profit commitment and at the same time, it's to the end, it's not either, build our skincare portfolio with all the activities I have been sharing with you until now. Thank you. Our next question will come from Lauren Lieberman with Barclays. Your line is open. Great. Thanks. Good morning. I just thought I'd kind of flip this around and, you know, you've so many things are going well. I thought maybe it'd be interesting to hear what are the things, Sue and Laurent, that you're worried about as you look ahead. You know, it seems like everything's on the right track. Lots of positive updates today. What are the things that are kind of top on your list as worry or watch points? Thanks. Yeah. Good morning, Lauren. I can tell you know, this question is really, you know, since, you know, the last three years, this is the ongoing question. This is all the decisions, you know, the strategy we built are really exactly to, you know, to grow the company and to protect the company. The name of the game is balanced portfolio. This is really what makes the difference and now what we are seeing in motion. It's balanced in terms of categories. What you are seeing, fragrance is doing great. Color cosmetic is doing great. Fragrance is also in prestige but in consumer beauty. Now indeed we are doing skincare and we have also a prestige cosmetic. Definitely, you know, building this balanced portfolio makes a difference. It's also the case in terms of geographies, very, you know, balanced portfolio across across the world with as you saw, America doing very strong. It's a case of North America but also South America. Here also you see really the balance, the growth of our equation. Europe is very strong, we are seeing currently also good momentum in Europe. I mean, the fragrance index that Sue was referring to is now in motion in Europe. Travel retail grew more than 30%. Last but not least, as we discussed extensively before, is China for us is only an opportunity. This is definitely the work that with the leadership team that we are doing constantly. Last element to answer your point is also in terms of price partition. We are covering from really affordable products, so which, you know, can match the need of, you know, part of the consumer. Then we are going up and up, and we are also reaching, you know, very high-end consumers. All these elements definitely giving... are giving us, not only the protection but also the drivers of profitable growth. This is definitely what we are looking at and adapting constantly. Thank you. Our next question comes from Olivia Tong with Raymond James. Your line is open. Great. Thanks. Good morning. My first question is around the price increases that you're contemplating, next quarter or in two quarters. Just if you could give us more color in terms of, you know, categories, geographies that you're contemplating. Is it areas you had already planned and it's just taking a little bit longer or areas that are new? Then, on the fragrance service levels, getting back to the high 80s, can you talk about where it was heading into COVID and, at this rate of improvement, how long you think it will take you to get back to where you were before? Should we think of this shortage as impacting all the fragrance brands more or less equally on a percentage of sales or, you know, that could have potentially been left on the table? Are there any innovation changes you had to make as a result of the shortage? Just trying to think about the recovery as fragrance service levels get back to a more normalized pace. Thanks so much. Good morning, Olivia. I mean, price increase, as we shared, I mean, we are contemplating the new price increase in Q1 2024. I mean, the methodology remains the same, and we explained several times. We have a dedicating pricing office which was put in place more than two years ago. The work we do is always very granular. We do it indeed per channel, per product, per category, per market. We need to of course combine with the data that we get, you know, from CMI so that we are making sure that what is done is really matching and you know exactly what the consumer needs. As I shared before, is also we combine this with value creation. Sustainability is definitely a big angle on value creation. This is a case indeed on prestige, but also on consumer beauty. Keep this in mind that it's very granular work, and every time we are making sure that in terms of a portfolio price increase that we are doing, you know, are very consistent and we are not, you know, creating some gaps between our products across the group. This is very something... and I have to tell you now we have very good expertise, and the last price increase went very smoothly, and again, very good collaboration with the retailers. On service level, definitely we are seeing some very good improvement. Indeed now, I mean, we are landing Q3 in the high 80. What's very important, in, indeed that there is still some tension and this is the case for the whole industry. That's why we remain very focused. That's why also I share that we also are building inventory end of Q3. The key reason of the challenge on service level in fact is because the demand will remain very high. Okay. It means that supply chain keeps adapting, and there was, you know, already very strong effort on adaptation made, but definitely we stay very focused. This is a case on glass bottle, indeed, but also caps and pumps. Overall, very good improvement. We are now, you know, very good, in a very good position, but of course still some challenge that we are managing very, very carefully. Thank you. Our last question comes from Andrea Teixeira with J.P. Morgan. Your line is open. Thank you. Good morning. My question, if you can comment on the prestige side of the business coming stronger than expected. Of course you did mention a couple of things during your prepared remarks and your answers, but we've seen that strong demand in fragrance continues for about three years now, and your implied fourth quarter, albeit is still very strong, is about 11% for the total company. I was wondering if you were just embedding some conservatism or is there anything in the third quarter that came in, I understand it came in also above your expectations, if there is any setup that you had for Lancôme there that obviously may accelerate and the reopening in China? Anything you can contribute to say perhaps, you know, there's some pull forward there, that you're embedding some deceleration? Just a clarification, a couple of questions regarding margins. As you think about the pricing that you're coming in for the first quarter and what you set yourself to in terms of the growth, you know, back in your Investor Day, where you highlighted 9%-11% EBITDA growth. Is that something you're saying basically we need to invest, growth is coming in better than anticipated. We are not gonna chase margins at this point. Obviously, you still had some improvement underlying, but it's probably at this point below what could be if you were not reinvesting. Is that the way we're thinking? In terms of priorities, your priority, of course, the priority will be dollar top line and dollar margins as opposed to percentage margins. Is that fair? Yeah. Good morning, Pamela, this is Sue. I'm going to take the first part of the question maybe around the other performance of prestige, and how we see this in Q4. Indeed, Q3 benefited both from restocking and of course from the three things. Restocking, our over performance with our innovations. You think about a brand like Burberry, between Burberry Her and Burberry Hero fragrances. We've jumped from the 30 position to a top 10 position, something like this in the US market. You can see that we are over-performing the market thanks to our innovation. Restocking helps and by nature also the growth of the market is lifting, you know, all of us at the same time. This growth is huge, 60% in the US, 40% globally. It's just the beginning, I believe, of this fragrancing that is at play globally. On Q4, we believe that there will not be any more effect from restocking. This was really a one-time benefit in Q3. Now when it comes to the EBITDA growth, maybe Laurent can take this one when it comes to. Yeah. reinvesting, prioritization of top line over margin expansion. Absolutely. I will keep it short. I mean, Sue said it just before. I mean, definitely what is important is really the end. What we are doing is definitely to invest in the strategic initiatives. The big one indeed we refer to is skincare, but there are also a lot of other initiatives. We are investing in the strategic initiatives and delivering the profit, EBIT, EBITDA, and EPS. This is really the way and this is we are monitoring our equation on a day-to-day. Thank you. This concludes the question and answer portion of today's call. I would like to turn the call back over to Sue for any additional or closing remarks. Thank you very much. Thank you everyone for your questions. We are very proud, as you can imagine, of this 11th quarter of results that are in line or ahead of expectations. We see this sale growth accelerating both divisions, which is really, as you can imagine, a very strong source of pride for us. Both divisions are double-digit growth, and this is fantastic because we have two legs and we need the two legs to compete in the very competitive world of today. You clearly understood that we are reinvesting behind our skincare pillar. Our obsession, Laurent has been saying this several times during the call today, is about creating several growth engines, two divisions, several brands, several categories in several regions. This is clearly starting to show results. Last but not least, while we are reinvesting, we are continuing to confirm our profit, you know, forecast and profit guidance. Last but not least, happy to say that the leveraging of the company is fully on track, targeting 3 times at the end of calendar 23 and 2 times at the end of calendar 25. Thank you very much. Thank you, ladies and gentlemen. This concludes today's question and answer call. We appreciate your participation. You may disconnect at any time.