Good day, everyone, and welcome to The Estée Lauder Companies' fiscal 2024 third quarter conference call. Today's call is being recorded and webcast. If you require operator assistance, please press star and zero. For opening remarks and introductions, I'd like to turn the call over to Senior Vice President of Investor Relations, Ms. Rainey Mancini. Ma'am, you may begin. Hello. On today's call are Fabrizio Freda, President and Chief Executive Officer, and Tracey Travis, Executive Vice President and Chief Financial Officer. Since many of our results today contain forward-looking statements, let me refer you to our press release and our reports filed with the SEC, where you'll find factors that could cause actual results to differ materially from these forward-looking statements. To facilitate the discussion of our underlying business, the commentary on our financial results and expectations is before restructuring and other charges and adjustments disclosed in our press release. Unless otherwise stated, all organic net sales growth also excludes the non-comparable impacts of acquisitions, divestitures, brand closures, and the impact of foreign currency translation. You can find reconciliations between GAAP and non-GAAP measures in our press release and on the investor section of our website. As a reminder, reference to online sales includes sales that we make directly to our consumers through our brand.com sites and through third-party platforms. It also includes estimated sales for our products through our retailers' websites. During the Q&A session, we ask that you please limit yourself to one question, so we can respond to all of you within the time scheduled for this call. Now I'll turn the call over to Fabrizio. Thank you, Rainey, and hello to everyone. We are pleased to be with you today to review our third quarter results and discuss our strategic initiatives. For the third quarter, we delivered organic sales growth of 6% at the high end of our outlook, exceeded expectations for profitability, and continued to significantly improve working capital. We achieved stronger than anticipated performance, beginning with gross margin. Results benefited from a greater than expected mix of skincare. Moreover, we made great strides in reducing the pressure on excess and obsolescence, driven by our now lower inventory levels and in realizing strategic pricing. Further contributing to the outperformance, we manage expenses with discipline across multiple areas of the business and have shifted certain advertising spending to the fourth quarter to support our rich innovation pipeline and expanded consumer reach. Encouragingly, with our third quarter results and fourth quarter outlook, we are confident that the second half of fiscal year 2024 will indeed prove to be an inflection point for the company, representing a renewed sales and profit growth trajectory. First, momentum in organic sales growth is primed to accelerate in the fourth quarter for a strong second half. Second, we continue to expect operating margin in the second half of fiscal year 2024 to be higher than the first half and to expand from the year ago period. Third, with a Profit Recovery Plan designed to deliver $1.1 billion-$1.4 billion of incremental operating profit in fiscal year 2025 and 2026, we are well positioned to rebuild our profitability. With the Profit Recovery Plan also expected to generate savings to reinvest in our brands and consumer-facing initiatives, we are well positioned to accelerate sustainable sales and profit growth as a faster and leaner organization, with stronger leverage from our future growth. During the third quarter, we accomplished much to solidify the inflection point of the second half. Indeed, we made progress in achieving targeted trade inventory levels in Asia Travel Retail. We are encouraged by the evolution of our Asia Travel Retail business this fiscal year, as we execute our priority to reduce trade inventory in alignment with retailers, an effort by various local authorities to contain a structured market activity. Retail sales growth in Asia Travel Retail significantly improved sequentially, returning to growth in the third quarter. This improving retail sales trend in Asia Travel Retail complemented the double-digit retail sales growth we continue to see in EMEA and the Americas travel retail. So far this fiscal year, we also invested in the long-term growth opportunities of traveling consumers, evidenced by our brands having moved within Hainan Sanya International Duty Free Shopping Complex to the galleria's new Global Beauty Plaza. The larger, elegant new stores expands upon the high-touch services and experiences that we offered at the previous locations in the complex, from Estée Lauder Re-Nutriv new Skin Longevity Institute to La Mer Cabin, offering bespoke s pa services and KILIAN PARIS Juice, a cocktail bar featuring fragrance-inspired cocktails. We also made great progress in advancing strategic initiatives and launching exciting innovation to fuel North America, re-accelerate growth in Mainland China, and drive momentum in markets that are strong across developed and emerging markets in Asia Pacific, EMEA, and Latin America. Let me begin with Clinique, where we had a robust quarter of progress as the brand doubles down on its authentic dermatologist brand heritage. Clinique deepened its relationship with the medical community, returning to the American Academy of Dermatology annual meeting with high impact engagements. The brand also established the Clinique Dermatologist Creator Council, a collection of doctors who are amplifying the sharing of science and dermatological insights on their own social channels, as well as informing Clinique narrative on its social platforms. Impressively, Clinique influencer earned media value for skincare in the U.S. soared 80% during the quarter, leaping 33 spots in rank. We believe this is just the beginning of the success Clinique will realize by communicating its dermatological education and clinically proven solution for skincare to make up. Moreover, having started with Clinique in March, we are thrilled to be strategically expanding our consumer reach in the U.S., as a select few brands will open dedicated storefronts in Amazon's fast-growing Premium Beauty Store over the coming months. Clinique's launch capitalized on its renewed dermatologist-guided branding with striking creative asset and elevated storytelling. Impressively, Clinique store has exceeded our retail sales expectations so far, and already contributed in March to the brand's share gains in U.S. prestige skincare, biggest subcategory of moisturizers, among others, as well as in U.S. prestige makeup. We also successfully accelerated our innovation in the quarter. For the Estée Lauder brand, we brought to market breakthrough innovation across franchises. For its luxury Re-Nutriv franchise, the brand was inspired by its over 15 years of skin longevity research with its new Ultimate Diamond Transformative Brilliance Soft Creme. The impact of these launches is powerful. Beyond contributing to the brand growth, they firmly established Re-Nutriv as a leader in the science of skin longevity, a visible age reversal. For Estée Lauder Supreme franchise, the brand leveraged its decades of night repair expertise in collagen research with a new Revitalizing Supreme Night Bounce Creme, first launched to rave reviews in Asia Pacific and expanding globally in the coming months. We believe this launch holds great promise, serving to strengthen the brand leadership in nighttime science and skincare across subcategories. La Mer extended its winning streak of innovation with a moisturizing fresh cream, which along with its icon hero products, drove the brand to be the strongest contribution to the company growth for the quarter. Beyond these strategic innovations and go-to-market activations across Active Derma, longevity, night skincare, MAC introduced newness in makeup to jumpstart our rich innovation pipeline in the category for the second half. MAC launched M·A·Cximal Silky Matte Lipstick to great acclaim, successfully modernizing its icon matte lipstick with nourishing ingredients and bolder packaging. From Seoul to Berlin to New York City, M·A·Cximal pop-up events drove strong engagement and earned media value. MAC remastered Studio Fix Fluid Foundation came to market in April, delivering a new soft matte finish, enhanced with new skincare ingredients and even more shades. This high sought innovation and its icon prove the enduring love of MAC with consumers and makeup artists alike, as the brand celebrates its 40 years in 2024. Looking at fragrances, over the last couple of months, we have expanded our consumer reach in the high potential Asia Pacific region, opening spectacular flagship stores for Jo Malone London and Le Labo, each unique with locally relevant features. We are incredibly excited for the evolution in luxury and artisanal fragrances as together with Balmain, we introduce Balmain Beauty this September. Across our brands and around the world, we are focused on leveraging technology, including AI, in support of our enduring strengths and high touch experiences and high quality products. We continue to partner with leading technology companies from Microsoft, with whom we are collaborating to embed AI to drive faster speed to market and local relevance, to Google Cloud, as we strive to enhance customized targeting of media at scale. Turning to the regions, we have spoken about our focus on driving the momentum in markets which are strong. To that end, we have delivered terrific results across many markets, reflecting the desirability of our brands, the compelling innovation which I described, and strong go-to-market execution. We see this across our developed and emerging markets around the world. Beginning in Asia Pacific, Hong Kong SAR, Japan, have prospered, up double-digit organically in the quarter and year to date, and we are excited about what's to come, including the launch of The Ordinary in Japan during the fourth quarter. Moving to EMEA, Germany and Italy have consistently contributed to growth in the markets of the region each quarter. Mexico, Brazil, and India's strong double-digit growth in the third quarter has fueled excellent performance in our emerging markets year to date. For North America, we delivered sequentially improved organic sales trends in the third quarter, driven by the multifaceted strategic plan we first discussed with you in August. We are pleased with the results we are seeing in our areas of strategic focus. Skincare grew organically in North America for the third consecutive quarter, driven by Estée Lauder and The Ordinary as hero products, innovation, and go-to-market activation excelled. Our luxury and prestige fragrances rose double digits organically once more, fueled by Jo Malone London, Kilian Paris, and Tom Ford. Across our brand portfolio in North America, we are realizing success as we focus on deepening consumer engagement on social platforms, where so much discovery in beauty takes place. The Ordinary has long been a pioneer, with an outstanding social engine, and more of our brands have enhanced their engagement with consumers this year. We are also successfully expanding our consumer reach to better serve new consumers, from Clinique's new storefront in the U.S. Amazon Premium Beauty Store, to expansions early this fiscal year as the Estée Lauder brand entered into more Ulta Beauty stores, and Kilian Paris entered into additional Sephora stores. For Clinique, as the number one dermatologist beauty brand in the U.S. prestige, we are optimistic for the positive impact its launch on the U.S. Amazon Premium Beauty Store will have for the fourth quarter, given initial performance in March. For Mainland China, we returned to organic sales growth, albeit at a slower pace than expected amid an overall soft prestige beauty industry. Retail sales for prestige beauty were strong in January, but moderated in February and March, due in part to the Chinese New Year coinciding with Valentine's Day this year, which limited gifting. This certainly impacted the industry, but also many of our brands, which had a strong presence in gifting. Our focus remains bringing irresistible newness to consumers to best create growth opportunities. Here, our innovation in Estée Lauder Re-Nutriv and Supreme franchise, as well as La Mer and MAC, were well-received across the third quarter, and we have more compelling launches in the fourth quarter. One, in particular, from Estée Lauder Perfectionist Pro franchise, is especially exciting, as it is among the first product created in our China innovation labs, and addresses local demand for SPF 50+ UV protection that is suitable for sensitive and post-derm procedures skin. With the fourth quarter innovation pipeline expanding upon the innovation launch throughout the third quarter, and the key shopping moments of 6.18 are coming, we are increasing our investment in advertising and go-to-market activation to sustain retail. Since we spoke with you in February, we also made important progress in all work streams across the pillar of the Profit Recovery Plan, of which I'm pleased to share a few examples with you today. For one, our Integrated Business Planning process, which has now rolled out globally, is contributing to operational inventory improvements. Our enterprise-wide integrated business planning will serve as the foundation to drive better demand planning and reduce excess and global obsolescence. It is complemented by advanced planning technologies, including AI, to statistically elevate forecast accuracy and dynamically position and deploy inventories. We have refined and optimized our innovation pipeline for fiscal years 2025 and 2026 to best focus on accretive innovation, bringing to market products that both create and drive trends locally and globally across categories. Innovation in fiscal year 2025 is still expected to be even bigger and stronger than in fiscal year 2024, with more breakthrough innovation and expansion into wide space opportunities. We also announced plans to streamline manufacturing and distribution on a campus through realigning shift schedules, consolidating operation into fewer buildings, and shifting powder manufacturing to a trusted third-party partner. This strategic initiative accomplished multiple objectives, as in addition to consolidating capacity and optimizing cost, we also expect greater speed to market by leveraging more external innovation with a global leader in powder. Before I close, I want to speak to the exciting milestones in our brand portfolio during the fourth quarter. First, a few days ago marked the one-year anniversary of our Tom Ford acquisition. This transformational deal, where we evolved from licensees of Tom Ford Beauty to the owner and licensor of Tom Ford, solidified a coveted brand in the company luxury portfolio for the long- term and created a new royalty revenue stream. Moreover, it afforded us strategic synergies, which we are now unlocking, demonstrated by the recent launch of brand.com in the U.S. and U.K. as just one example. With the Ermenegildo Zegna Group and Marcolin, we are capitalizing on the power of the brand modern luxury glamour across fashion, eyewear, and beauty, connecting these three verticals in compelling new ways to drive growth. Indeed, in February, for Fashion Weeks from Milan to London, Paris, and New York, we orchestrated the first-ever 360-degree cross-category campaign and featured a blockbuster fragrance launch. Later this month, we are thrilled to be further solidifying our brand portfolio in yet another way, as we acquire the remaining interest in DECIEM, completing the deal we made three years ago when we became majority owner. During these three years, DECIEM and its beloved brand, The Ordinary, have soared to new heights, ranking top five in prestige skincare in many markets, including top two in its home markets of Canada and the U.S. Together, we have successfully invested to scale innovation for The Ordinary and have increased The Ordinary innovation as a percentage of sales from 5% to over 25%, expected this fiscal year, expanded the brand globally from India to the Middle East to South Africa, and improved its profitability by driving operational efficiencies in the supply chain. With that said, we believe The Ordinary and DECIEM still have bigger opportunities in front of them, and we are excited for what the future holds. Finally, we are pleased to see our initiatives and progress in sustainability recognized, and since we spoke with you in February, we were included in the CDP's Climate A List for 2023. Overall, we received our best ever collective scores in 2023 from CDP, as well as these excellent climate results, we scored A- in each of the water security, forest timbers, and forest palm oil. In closing, we are at an inflection point in our company performance, primed for a strong second half of organic sales growth and improved profitability. And with our Profit Recovery Plan, we are well positioned to meaningfully rebuild our profitability in fiscal years 2025 and 2026, while also generating savings to reinvest in our brands and consumer-facing initiatives. We are confident in our strategy to realize the promising growth opportunities of global prestige beauty, leveraging the strengths of our diversified brand portfolio, rich innovation pipeline, and the superior quality of our products. I extend my gratitude to our employees for the significant contribution you have made in bringing us to this inflection point of a renewed sales and profit growth trajectory. I will now turn the call over to Tracey. Thank you, Fabrizio, and hello, everyone. Our third quarter organic net sales increased 6% at the higher end of our expectations. As Fabrizio mentioned, we are pleased with the progress we've made thus far in Asia Travel Retail, with reducing retailer inventory and the corresponding return to net sales growth. These achievements in the quarter were a bit earlier than expected and led to a partial shift in the expected timing of the resumption of replenishment orders from the fourth quarter to the third. Partially offsetting this growth was lower than expected net sales in Mainland China, reflecting the impact of ongoing softness in overall Prestige Beauty, in part due to subdued consumer confidence and softness during holiday and key shopping moments. Our earnings per share of $0.97 exceeded our outlook for the quarter due to the acceleration of skincare, the return to net sales growth in our Asia Travel Retail business, tighter expense management, and a lower tax rate. The reduction in our tax rate was largely driven by the shift in our geographical mix of business. Regarding our regions, organic net sales in our Europe, the Middle East, and Africa region increased 12%, driven largely by the growth in our travel retail business. Our travel retail net sales increased strong double digits, returning to growth after 7 consecutive quarters of decline, given the sequential acceleration of retail sales and shipments, as well as the anniversary of lower shipments last year, which were pressured by transitory headwinds in Hainan and Korea, as well as limited international flights, visas, and group tours from China to other markets last year. Elsewhere in EMEA, organic net sales in our priority emerging markets increased strong double digits, where we drove growth from most brands and in most channels of distribution, given our strategic initiative to expand consumer reach, in particular for our fragrance and skincare brands. Our results in mature markets were mixed, resulting in overall flat growth. Organic net sales in our Asia Pacific region increased 3%, led by Hong Kong, SAR, Mainland China, and Japan, reflecting mid-single digit net sales growth in skincare and high single-digit growth in fragrance. Organic net sales in the Americas increased 1%, largely due to Latin America, where continued growth in Mexico and Brazil, led by makeup, drove double-digit increases in department stores and freestanding stores. Organic net sales in North America were flat in the quarter, as growth in fragrance and skincare was offset by declines in makeup and hair care. The double-digit growth in specialty multi, driven by Estée Lauder and MAC, was offset by softer performance in department stores and direct-to-consumer channels. From a category standpoint, organic net sales in skincare rose 9%, largely driven by our Asia Travel Retail business, as well as from Hong Kong, SAR, and Mainland China. Organic net sales from La Mer and Estée Lauder propelled the category's growth, led by strong campaigns behind our hero product franchises, with new product innovation and increased in-store activations. Organic net sales in makeup increased 4%, largely driven by our Asia Travel Retail business and by Latin America. Net sales from Estée Lauder and Clinique led the category's growth, fueled by ongoing activations behind our hero product franchises. This was partially offset by a prior year benefit from changes made to MAC's take back loyalty program. Excluding the impact from the prior year benefit, MAC's net sales increased mid-single digits, with growth across all regions, mainly driven by new product innovation. Organic net sales in fragrance increased 1% and in hair care, declined 4%. In fragrance, net sales growth was driven by our luxury and artisanal brands, led by Jo Malone London and Le Labo. Jo Malone London grew double digits in travel retail and specialty multi. Le Labo saw double-digit growth in our direct-to-consumer channels, particularly in freestanding stores, driven by both same-door growth and targeted expanded consumer reach. Partially offsetting these increases was a decline from Estée Lauder due to retail softness during holiday and key shopping moments. Our gross margin increased 280 basis points compared to last year. This reflects positive impacts from changes in category mix, driven by the acceleration of skincare, lower obsolescence charges, given the reduction in excess inventory compared to last year, and stronger strategic price realization through lower levels of promotion. These improvements were partially offset, as expected, by the impact of the previous pull-down of production that triggered a requirement to recognize the related manufacturing costs in the current period instead of when products are sold. This resulted in a 215 basis point headwind to gross margin. Foreign currency also pressured gross margin in the quarter. Operating expenses decreased 290 basis points as a percent of sales during the quarter, driven by the sales growth leverage and expense management, including advertising and promotional expense, which decreased approximately 240 basis points compared to last year. This reduction reflects the anticipated shift in certain spending from the third quarter to the fourth to support innovation launches and key holiday moments in the fourth quarter. Operating income increased 75% to $554 million, and our operating margin expanded 570 basis points to 14.1%, compared to 8.4% last year. Our effective tax rate for the quarter was 30.5%, compared to the elevated rate of 43.1% last year. The decrease in the effective tax rate was primarily driven by a lower effective tax rate on our foreign operations due to the difference in timing of the estimated change in our full-year geographical mix of earnings in the current and prior year periods. This was partially offset by the unfavorable impact associated with previously issued stock-based compensation. Diluted EPS was $0.97, compared to $0.47 last year, largely due to the increase in sales, improvement in gross profit margin, and a lower tax rate. The impact from the business disruptions in Israel and other parts of the Middle East was $0.01 dilutive to EPS in the quarter. The acquisition of the Tom Ford brand was neutral to EPS, as interest expense related to our debt financing was offset by the combined benefits derived as the licensor of the brand from royalty revenue this year and savings from no longer having to pay royalties on the beauty business. For the nine months, we generated $1.5 billion in net cash flows from operating activities, compared to $1 billion last year. The increase from last year reflects lower working capital, which was largely due to the actions we have taken to reduce in-house inventory levels, primarily finished goods and semi-finished goods, that resulted in a significant improvement in our days to sell. We invested $702 million in capital expenditures, and we returned $710 million in cash to stockholders through dividends. As Fabrizio mentioned, our plans under the Profit Recovery Plan are progressing and are on track. This quarter, we began taking charges under the restructuring program and expect approval to accelerate in the fourth quarter of this year and throughout fiscal 2025, with meaningful benefits beginning to flow into our fiscal year 2025 results. Turning now to our outlook for the remainder of fiscal 2024. We are pleased with our progress thus far in reducing inventory levels, resuming replenishment shipments in Asia Travel Retail, accelerating innovation, and selectively expanding our consumer reach. These efforts have led to sequential improvements in both net sales and operating margin from the first half of the year, culminating in our return to profitable net sales growth this quarter. With these results in our outlook for the fourth quarter, we continue to expect a stronger second half compared to last year, underscoring that we believe we are at a sales and profitability inflection point. While we delivered on the high end of our third quarter expectations, we are lowering our fiscal 2024 organic net sales outlook range to reflect continued risks from evolving macroeconomic volatility, including continued softness in Mainland China and geopolitical tensions in certain areas around the world. In Asia Travel Retail, we are also mindful of potential short-term volatility in retail sales related to actions certain retailers are taking to increase their profitability. With the recalibration between our third and fourth quarters we discussed earlier, we are maintaining our full-year operating margin expectations and are increasing our EPS outlook slightly to reflect disciplined expense management year to date, somewhat offset by our plans to strategically invest in key areas of our business in the fourth quarter to continue to drive profitable growth and reflecting incremental headwinds from foreign currency translation. The combination of our third quarter performance and outlook for the fourth quarter results in a strong second half compared to the first half, with improvements in net sales and operating margin. Excluding the end-period charge we recognized in the third quarter, gross margin is also expected to improve in the second half. We believe our assumptions for the second half mark a meaningful turning point for the company, demonstrating the signs of our recovery and better position us, along with our Profit Recovery Plan initiatives, to drive sales growth and profitability further in fiscal 2025 and beyond. Using March 29th spot rates of 1.079 for the euro, 1.262 for the pound, 7.227 for the Chinese yuan, and 13.50 for the Korean won, currency translation is anticipated to negatively impact reported sales and diluted EPS for both the fourth quarter and the full year. We now expect organic net sales for our fourth quarter to increase 6%-10%, with increased consumer-facing investments, including shifts from the third quarter, and aligned to support innovation and key shopping moments in the fourth quarter. This growth also reflects the anniversary of some business disruptions we experienced last year, primarily in Hainan. In Mainland China, we expect the ongoing softness of overall prestige beauty to continue to pressure net sales. Currency translation is expected to be dilutive to reported net sales by 1%. We expect fourth quarter Adjusted EPS of $0.18-$0.28, an increase of over 100%. Currency translation is expected to dilute EPS by $0.01, and potential risks of business disruptions in the Middle East are expected to be dilutive by $0.03. Adjusted EPS and constant currency is expected to range between $0.19-$0.29. For the full year, we expect organic net sales to range between a 1%-2% decline. Currency translation is expected to be dilutive to reported net sales by 1 point. Our full-year operating margin outlook remains unchanged and is expected to be between 9%-9.5%, a contraction from 11.4% last year. We continue to expect our full-year effective tax rate to be approximately 35%, compared to 26.5% last year. Diluted EPS is expected to range between $2.14 and $2.24 before restructuring and other charges. Currency translation and potential risks of business disruptions in Israel and other parts of the Middle East are expected to dilute earnings per share by $0.09 and $0.06, respectively. In constant currency, we expect EPS to decrease between 33%-36%. Our fiscal 2024 outlook also assumes the purchase of the remaining outstanding equity interest in DECIEM, anticipated to be completed in May 2024. In closing, our expected second half results, starting with our strong third quarter performance, demonstrate our progressive return to sales growth and profitability. We have navigated through numerous challenges over this past year with resilience and determination to take meaningful actions to begin to improve the trajectory of our business. Our results show we have made great strides, and we have immense gratitude for the resolve and hard work of our teams globally. While we are pleased with our progress and results this quarter, we remain keenly aware of the additional work that lies ahead to continue down the path of restoring stronger profit margins. We are intensely focused on doing the necessary work to return to long-term sustainable growth and profitability, supported by the Profit Recovery Plan initiatives and executed by our dedicated employees. That concludes our prepared remarks. We'll be happy to take your questions at this time. The floor is now open for questions. If you have a question, you may simply press the star key followed by the digit one on your touchtone telephones. To ensure that everyone can ask their questions, we will limit each person to one question. Time permitting, we will return to you for additional questions. Just queue up again by pressing star and one. Our first question today comes from Bryan Spillane from Bank of America. Please go ahead with your question. Hey, thanks, operator. Good morning, everyone. So Tracey, I just wanted to ask, I guess, a question about, about, the 4 Q, the 4 Q guide and what's implied. So I guess the implied margin in 4 Q steps down from 3Q, yet the revenue will be roughly the same. Just implies maybe there's, there's not as much leverage. But so if you can just give us some perspective on, on the margin step down, you know, quarter to quarter. And then as we think about the run rate into 2025, is there anything that we should read into the fourth quarter guide that would sort of inform exit rate for 2024 into 2025, both in terms of organic sales and margins? Thank you. Thanks, Bryan. You know, when you think about the fourth quarter and what I said in my prepared remarks, I talked about some shifts that you know that are occurring in the fourth quarter. So we did shift some advertising expense out of the third quarter and into the fourth quarter, and that was to support some of the timing of the activity that we had in the fourth quarter, both innovation as well as some of the holidays in the fourth quarter. I also talked about the fact that you know travel retail, Asia Travel Retail, we resumed shipments earlier than what we had expected in the third quarter. So there are. It's hard to look at Q3, Q4, you really need to look at the second half together, because of some of those shifts. You know, what's impacting our fourth quarter performance is, you know, and the change in our guidance is softer growth of, you know, Prestige Beauty in Mainland China. You know, the continued macro uncertainty, you know, that retailers, you know, are cautious in many markets, you know, have. We also have higher currency than what we had expected, so that is pressuring our EPS a bit as well. But when you look at the second half compared to prior guidance, what you will see is some of the expense savings that we realized, and that I again talked about in my prepared remarks, we are actually flowing through. We are offsetting some of the currency downside that we had, and we're also offsetting some of the sales softness that is embedded in our updated guidance range. Our next question comes from Olivia Tong from Raymond James. Please go ahead with your question. Great, thank you. You mentioned several times that you've seen improvement towards targeted retail inventory levels in travel retail, but not quite there yet. So can you talk about exit rate on the quarter, more recent performance in Asia Travel Retail, particularly in Hainan and Korea, and then also China, both on and offline? And you know, just what consumption looks like more recently, your views on the 6.18 festival upcoming. Sounds like you're going to spend a bit more money on that than you had previously anticipated, and just your outlook there. Thank you. Global travel retail return to growth, also driven by, frankly, growth and retail growth across all the regions. The first important point is retail sales growth, and this was very, very strong in EMEA, Americas, in many parts of APAC, and was a single digit in the China TR part. But this is a very important progress versus the past, and is, for Estée Lauder Companies' brands, great news also for the future. The second thing that we are seeing is a very robust traffic recovery across the travel retail channel, which is driving the sales to travelers. There is work to be done still on conversion, which is the areas of improvement that we are still working on, but we had a lot of work and progress in this via activations and retail activation, particularly in Hainan, with a lot of activity. And these activation are working, and so we see progress also in this area. And then as it was part of your question, because of all these elements, strong improvement in the inventories in our retailers, and so reaching the targets in several retailers and in several SKUs ahead of our original communicated target. So at the end, this created a very good growth, which is based on retail growth and selling to replenishment because of the decreased inventory levels versus the past. This combination is very solid, and we expect this to continue and to progress in line with our goals. Our next question comes from Lauren Lieberman, from Barclays. Please go ahead with your question. Great, thanks. I just had a question about spending levels. It was great, Tracey, thanks for being so specific on, on the advertising and the reinvestment this quarter and the shift into 4Q. But if I remember, in 3Q, there was also some timing shift on spend. So I wanted to talk a little bit about maybe the decision tree of, like, when to, when to put that spending in. You know, is it... Because if it's shifting, is it about pace of getting innovation ready and launched? Is it about the consumer environment? Maybe avoid putting money in play that would be like pushing on a string if the consumer isn't there. But it does feel like some of those spending plans are, are shifting gently quarter to quarter. And so I was curious if you could just comment on that. Thanks. Yeah, well, you outlined a few of the reasons that we would make a decision to shift some of the spending. So, you know, one of the things that we saw early in the quarter, towards the middle of the quarter, is that some of the holidays, particularly in China, were not performing as we had anticipated. I think we mentioned in our prepared remarks, you know, two holidays that are important for us, Chinese New Year and Valentine's Day, were closer this year, actually overlapped a bit than in prior years. Valentine's Day is actually a pretty strong gifting moment for us in China. Our team does a fantastic job of supporting Valentine's Day. Both Chinese New Year and Valentine's Day are less promotional holidays than some of the other holidays. But we didn't see the lift that we would normally see out of those holidays. And trending into other holidays in the quarter, we made the decision, or the China team made the decision that, it was best to shift some of that advertising to the fourth quarter and support some of the holidays that are upcoming in May, and then obviously, the big 6.18 holiday in June. So one of the things that we've talked about for a long time is the agility that we have created, particularly in our advertising spend, that allows us to take some of those decisions so that we can better match our advertising spend to when we think consumers will be reacting and responding, whether it's to, you know, our gifting programs or our innovation programs. So that, that is, you know, what you saw in Lauren, in the Q3, Q4 shift. Our next question comes from Dara Mohsenian from Morgan Stanley. Please go ahead with your question. Hi, Tracey, I wanted to stick with that question, but perhaps look out more longer- term. Obviously, you mentioned higher investment in fiscal Q4 and the shift from Q3, and also you had better than expected expense management in Q3. So can you just take a step back and discuss the pace of reinvestment you expect behind the business over the next few years? How much of that is captured in the difference in gross and net savings in the profit recovery program, and then how the pace of that reinvestment fits with the savings from the profit recovery program, and how you think about the, the savings? So really, the cadence annually looking at reinvestment versus savings as you look out over the next few years and how they interrelate with each other. Right. No, thank you for the question. So yeah, let me take the opportunity to talk, as you asked, about the Profit Recovery Plan. You know, we're always focused on profitable growth. Let me start there. The actions that we're taking, both within the Profit Recovery Plan as well as outside of the Profit Recovery Plan, are focused on profitable growth. The Profit Recovery Plan is an accelerator of our growth, and in particular, an accelerator of our margin. And, you know, let me just, you know, try to simplify it a bit. I know we've said that we will share, which we will, more with you in August once our plans are complete and we provide guidance for the next year. But the Profit Recovery Plan is first and foremost focused on restoration of our gross margin. Now, we're mindful of shifts in category mix and channel mix relative to history. Obviously, we had growth in fragrance in our artisanal and luxury fragrance portfolio, and that's very, you know, very important. We're also focused on restoration of our makeup growth. But certainly, as you saw in this past quarter, you know, we're also experiencing the acceleration of our very important skincare category, and we expect that that will continue. The biggest drain on our margin has been our gross margin, you know, and it's in the aftermath of the pandemic. It's, you know, has been the biggest focus of our recovery, and we are focused on price realization. Part of that will be driven by the actions that we are taking in terms of inventory management to control discounts and excess and obsolescence. You saw a bit of the results of that in Q3, and you will see certainly more of that in fiscal 2025. So that is a very big focus of our Profit Recovery Plan, the focus on restoration of our gross margins. We're also focused on supply chain efficiencies that will help our gross margins, and accretive innovation, and we talked about some of the processes in Fabrizio's prepared remarks that we are deploying and strengthening in order to be able to do that. The second area of focus is greater leverage of our expense base. You know, we have efforts in indirect procurement, in terms of accelerating some of the savings there. And we have, you know, are taking some difficult decisions as it relates to right-sizing and streamlining parts of our organization, and that's the restructuring program that we spoke to you about, before. You know, that is really the combination of that should drive the $1.1 billion-$1.4 billion of incremental operating profit over two years. And again, we said that slightly more of that will happen in fiscal 2025 than in 2026. And again, in terms of the mix of where that recovery is expected, more in gross profit margin, but also in our operating expenses. But I wanna take the opportunity to talk about a couple of other benefits as it relates to the Profit Recovery Plan. So in addition to the margin recovery, the program is expected to fund additional investment, to your point, for growth, namely, in consumer activation, more consumer activation for our brands. So the expectation is we are going to save more than the $1.1 billion-$1.4 billion that we are committing to in terms of operating profit improvement, in order to also increase some of our advertising spend very targeted and selectively, against the momentum that we see in our business. And last but not least, we expect to streamline and reduce some of the complexity in the organization that has built up over time in our processes. That's expected to increase our speed, agility, and effectiveness in our markets. I know our organization, in particular, very much looks forward to this benefit. It's a powerful program. I'm glad you asked about it. When we deliver on all elements of it, and we will share more, in terms of helping with the modeling of it, in August. Our next question comes from Filippo Falorni from Citi. Please go ahead with your question. Hey, good morning, everyone. I had a question on the Mainland China business. You clearly mentioned strong start in January, but then a deceleration, you mentioned that the exit rate has been soft in the country. So maybe you can comment particularly, like, what you've seen more recently from a category growth standpoint, promotional activity levels and maybe market share. And then maybe longer- term, as you take a step back, based on your analysis on the market, what do you think has been the main driver of the weakness? Is it mainly macro-related? Is it more trade down in the category, local competitors doing better? Any sense of what the drivers of this slowdown are will be helpful. Thank you. Yeah, sure. On the, in this moment, the slowdown, the softness is the overall prestige market, and that's what is softer than what we originally expected, and that's what is stuck in Mainland China. What I want to clarify is that we do look at the Chinese consumers in total, and not only at the segmentation the market does. So there is a Mainland China's consumers, there is Hong Kong, SAR, there is the TR China, which includes Hainan, for example, and other parts, and there are the international traveling consumers, the people which, for tourism or business, travel from China to Tokyo, Paris, et cetera. So we see actually progress in the total Chinese consumer consumption on our brands, and they are very solid. When you took mainland, plus the progress in Hong Kong, SAR, plus the TR China retail progress that I was speaking about in the previous question, plus the success we see of our brands internationally, where the Chinese travelers now are going more, for example, in Japan, for example, in Paris. So when you put all these numbers, and frankly, they are all solid numbers except the international travelers in other cities, which is an estimate in our model. But we see clear progress, and there is progress between quarter two and quarter three, despite the softness in mainland, and there is actually, they are turning positive, very interestingly positive in quarter four, estimates for the future. So the trends are also depend by channel, and the drivers, first of all, are different consumers. The consumers that travel both for vacation and internationally tend to be the high end. In this moment, the softness is more in the middle, in the consumer sentiment or the middle class; we tend to be shopping more in mainland. These channels follow different trends and different depending on the moment and depending on the situation. But the equities of the brands are strong, as seen by the overall progress, particularly certain brands, which are growing in the total already as we speak and continue to accelerate in our portfolio. The future of this is positive. There is a sense of recovery in the overall consumption, although via channel, there are different percentages, different evolution, and this can be different also by quarter, by semester, depending on the various trends that happen. So, we look internally to the Chinese consumer as a whole, and not only to the various parts. Then your questions was, what had been the key drivers behind this? Now, one of the key drivers, obviously, is the skincare trend, and the fact that in the post-COVID, the consumers have been having, are having a period where they're focusing more on experiences, on overall experiences, consumption, spending in their portfolio on overall experiences like travel and like other categories, or like restaurants or like things like that. So this will evolve. It's evolving in every single market after COVID and become more balanced over time. That's our experience, and that's visible already. So, that's one of the drivers, is the consumer priority by category and experiences versus goods. The second thing is, we are accelerating innovation in a big way. We have invested in a R&D center in China. We see the results of this innovation. By the way, the first innovation coming from the R&D center will be in quarter four, and we will see the impact of it, which is very dedicated to specific Chinese consumers. So part of the drivers is being the amount of innovation and the quality of innovation that can be deployed. For quality, I mean, also local relevancy of the innovation. And this is an improving trend. It is a reinforcement trend, which gives very, very solid indications for the future. So, the other driver has been promotionality. The market has been, during COVID, more promotional. But in this moment, all the activities that the governments have decided to do on the unstructured market is reducing the level of unstructured market. Also, the price increases that many of the retailers are taking, also in Travel Retail, are in the short- term impacting the consumption, particularly at the middle class level in mainland, but on the contrary, in the long- term, will further balance the proportion between a unstructured market, which is obviously in line with our goals and is the objective. So it's a positive long-term trend, which is happening. So, but the market will remain promotional, and so that's why we have the activation of promotionality, particularly in the area of sampling, gifting to the points that Tracey was making before is on an increase, and the level of discounts is on a decrease trend, and that's the change in the proportionality model. But all in all, I just want to ensure that we understand that despite the short-term softness of the market in Mainland China, the overall trend of Chinese consumers is positive, and this trend is expected to accelerate in the future. Our next question comes from Steve Powers from Deutsche. Please go ahead with your question. Yes, hey, good morning, Fabrizio and Tracey. Thanks for the question. I wanted to clarify, I think Olivia had asked about it, but, you know, on the trade inventory in China, it sounds like on certain SKUs, certain parts of the portfolio, you're ahead of schedule in clearing that inventory backlog, but the total portfolio seems like it didn't quite hit that April first target you had. So is that the right read? And just, you know, your confidence in being able to ship to consumption across the total portfolio in the fourth quarter, does that—is that intact, or is that part of the lower sort of organic outlook for the fourth quarter versus what was implied back in December? The second question- Yeah, no. Sorry. Go ahead, Tracey, and I can follow up if that's okay. No, no, go ahead with your second question, Steve. Okay. Even though you only have one, but go ahead with your second. Well, that was a clarification. So, I wanted to pivot actually to Clinique on Amazon. You know, historically, you'd cited for a long time hurdles launching on that platform that were, at least to me, a combination of, you know, questions around achievable unit economics on that platform, the brand experience for consumers and being able to curate that effectively, and then just your own sort of visibility into the required consumer insights. So just, you know, to the extent that that's correct, you know, how did you overcome those hurdles and get to the point where Clinique on Amazon, in your mind, is the right time for that? Thank you. Okay, Steve. So I'll take the first part of that question on, on the inventory in, in Asia Travel Retail, and Fabrizio will take the Amazon, Clinique follow-up question. You know, regarding our, the inventory and trade in Asia Travel Retail, we did reach the objectives that we had in, in the third quarter, actually before April. And so the reason that we ended up, shifting a bit more from a rep- or doing a bit more from a replenishment standpoint in the third quarter, is because we actually reached those levels a bit earlier than what we had anticipated. We anticipated reaching them by April, which is the beginning of the fourth quarter, obviously, and we reached them within the third quarter. So that is the reason why some of the shipments were a bit higher in the third quarter, and we will expect the retail sell-through in the fourth quarter. And so, as Fabrizio mentioned, we are expecting as well an acceleration of retail in the fourth quarter. Just remember for, you know, the cadence of what we're anniversarying, you know, we actually had some disruption even in the fourth quarter as it related to Hainan last year. So we are going to see a bit of a disconnect between retail and net for a couple of quarters, because of the significance of the interruptions that we had, both at the beginning of the third quarter last year, and the end of the fourth quarter last year as well. So we would expect that net, you know, will as we replenish relative to the comparison year-over-year to last year, the net would be ahead of retail. But we will be maintaining the inventory levels in the range that, you know, that we and our retailers have agreed to. Yeah, and on, on Clinique, on Amazon, I want to say one of the important progress we're making on Clinique is the initiative of building on Clinique heritage in Active Derma, and relaunch the brands in North America and U.K. in this moment and globally soon on this overall platform. The Amazon introduction in the U.S. is also right for Clinique in the context of this big relaunch, because a lot of new consumers that are very high consumers of Active Derma are also in this channel. Amazon provides expanded consumer reach, a lot of new consumers. We expect to recruit, to engage and to educate new consumer about this new channel. Amazon, in this moment, is a fast-growing online platform in the U.S., and their premium beauty store has been clearly contributor to the overall market growth, and particularly, has been an important brand discovery for some consumers and also consumers to become new consumers to Clinique. And so the early results are very promising, and the first period has been extraordinarily positive, frankly. And we have expectation that this will continue and will accelerate over time. So you, part of your question, why was the right moment now? I think because now the model of Amazon has evolved in a situation where there is a better fit between the Clinique brands and the Amazon model. And the opportunity to communicate the heritage, the equity, the education, and the various ideas behind the science of Active Derma, of Clinique, is now there. And so we believe the brand can express its fundamentals correctly on the platform. And the work that the Clinique team has done in providing amazing asset quality of execution to achieve a very good quality expression of the brand on the platform also reassured us that it is the right moment and is a very good fit. And as I said, initial results are confirming that. Our next question comes from Andrea Teixeira from JPMorgan. Please go ahead with your question. Thank you. Good morning. I have a question for Fabrizio, and then one clarification for Tracey. Fabrizio, I have a question on the U.S. sales. If you are seeing any acceleration in shipments as you exit the quarter, it seems that the third quarter was still negative, excluding the strength in Brazil and Mexico. So I wonder if you can comment on how this innovation that you're putting in more money behind MAC and Clinique has been panning out as you exit the quarter? And also clarification for Tracey. I appreciate all the details of the profit recovery in fiscal 2025. By my math, roughly the $700 million operating profit benefit at the midpoint, should we be thinking of this benefit be mostly spread with seasonality and excluding the shorter quarters, or mostly back half weighted as you do this plan? Thank you. So I'll take the, your last part of the question first. We'll give more guidance on the calendarization of the Profit Recovery Plan in August. You know, we're still... we're well into you know, the finalization of some of those plans and making taking some decisions within the next couple of months, so we'll be able to provide you with much better guidance on calendarization in you know, in the August timeframe. Yeah, on the U.S., actually, U.S. in quarter three has been growing low single digit. Sorry, North America in quarter three is growing a low single digit. And if you exclude the MAC loyalty program, actually it's getting closer to mid-single digits. So there is growth in North America in quarter three. That said, there is softness in consumer sentiment in this moment, also in North America, and the market growth is moderating in North America. So obviously, there is pressure in many, but particularly in certain channels, there is pressure. But quarter three was in the right direction and was in line with our goals. For us, the positive is that we had a, for example, a positive impact on Clinique on the part of March, and in this part of March, already we saw the impact of that, a positive impact of that. If we, you can assume that we will have in the full quarter for the impact of Clinique on Amazon, this, for example, would be a, a positive element. In, in the mix, we are sure of that. Ladies and gentlemen, this will conclude today's question and answer session. If you were unable to join for the entire call, a playback will be available at 1:00 P.M. Eastern time today through May fifteenth. To hear a recording of the call, please dial 877-344-7529, using passcode 5758677. That concludes today's Estée Lauder conference call. I'd like to thank you all for your participation and wish you all a good day. You may now disconnect your lines.