Good morning and welcome, everybody. Thanks for joining us. Today I am thrilled to welcome The Estée Lauder Companies back to the conference, but with new faces. Stéphane de La Faverie, President and Chief Executive Officer, welcome. With us also is Roberto Canevari, Executive Vice President of Global Supply Chain. Thank you both for joining us. Before we engage in some Q&A, Estée Lauder has prepared for us a little video. Let's roll that tape. Great. Thank you. That was uplifting. Energizing. Energizing. Lifting to start the day. Stéphane, let's maybe start with you and your perspective over the last several months since you assumed the CEO position, not quite six months ago. Not even. It's been a busy start to 2025, calendar 2025. I guess, how would you sort of summarize the experience and your key learnings? How has it informed the Beauty Reimagined strategy and your key priorities going forward? I'm sorry to thank you. First of all, Steve, thank you for having me today. And Roberto, we're very excited to be here. Yes, indeed. It's been like a bit more than 100 days, like since January 1st, it's been like not touching ground, flying pretty much everywhere around the world and being with our teams on the ground, our partners, retailers, suppliers, et cetera. I have to say one thing is I'm convinced more than ever, and Roberto will say the same thing, that the fundamentals of the company are strong. We have very strong brands. We have amazing teams around the world. Now, that being said, we need to just move with a lot more agility and speed than we've ever done before. I think this is somehow what has informed the strategy of Beauty Reimagined and what we're going to discuss this morning. I think the fundamental of the company, we are going to turn 80 years old as a company next year. We've been 80 years old strong, and we have to adapt. We have to adapt faster because the consumers, retailers, are moving faster than ever. I think in a way, Beauty Reimagined is here to address some of the challenges that we faced over the last few years. Beauty Reimagined in a way has like five pillars. You saw some of it, a glimpse of it in the videos. Each of them are here to just address the agility, the speed to be able for us to become the best consumer-centric beauty prestige company in the world, but also to make sure that we reignite growth and rebuild solid double-digit operating margin in the next few years. If you allow me a few minutes for the team and for everybody here on the five pillars of Beauty Reimagined, the first one, and certainly one that is going to redefine who we are as a company, is the consumer coverage. Consumers are moving faster than ever. I think in the post-COVID era, we've never seen consumers, regardless if you are in the U.S., if you are in Europe, if you are in the emerging market in China, moving to new channels of distribution. I think we as a team realized that we were not moving fast enough to new channels. We made a conscious decision that wherever a prestige consumer moves, we move. There is no more debate as an organization going forward. It has to be where the prestige consumer is because we remain a prestige beauty company as such. We're moving to channels such as Amazon. In the U.S., you saw the move that we did now about a year ago. Now, as of last week, we have 12 brands on Amazon U.S. That has allowed us to just reignite market share growth for the first time in many, many years in the U.S. I could take more examples shortly in Southeast Asia, TikTok Shop that we've signed a global agreement with globally, which allows us to expand our brands in the U.S., in the U.K., in Europe, in Southeast Asia, you name it. Now we have a global platform that allows us to just deploy our brands at the speed of light in a way that has never been done before. The second pillar is that when you have the right distribution, the risk is a bit of a fragmented distribution around the world when you think about it. You need to tailor your innovation to what distribution is. A much better understanding of what distribution is about is it trial, is it replenishment, or is it experience? That is the way you would define the three types of distribution that are at our tip of our finger. I think as a team, when we looked at Beauty Reimagined, what I know we were very good at is making the product that consumers love about us stronger. You think about the Advanced Night Repair of Estée Lauder, the Crème de la Mer from La Mer, or Moisture Surge from Clinique. We made this product stronger than ever. Steve, you know it, this industry, there's anywhere between 20%-30% of the sales any given year that are coming from innovation. I think we were a little bit on the lower side as a company. One of the things that I'm absolutely committed with the team is to accelerate innovation. We've committed to triple innovation that comes to market in less than 12 months in the market across every single category that is makeup, skincare, hair, or perfume. Once you have the right distribution and you have the right innovation, you need also to make sure it's at the right price point. I'm sure we'll talk about consumer sentiment in this moment in time. Having the right innovation at the right price point in the right channel is more critical than ever. We have developed a lot of capabilities and insights and data that allows us to meet the consumers where they are. The third thing, when you have the right distribution and the right innovation, you need to make sure you boost your investment. In a subdued consumer economy these days, again, I'm sure we'll talk about it, the cost of acquisition is going up. A lot of the work that we are doing is how every dollar we spend is becoming much more efficient. We need to just make sure we're not focused only on the top of the marketing funnel about the retention of the consumer, which obviously we need to make sure that we become the best company at retaining consumers because this is what gives the future profitability. At the same time, you need to make sure that we bring a wide range of consumers from every age, every ethnicity around the world. Now, you would say, how do you do that at a moment where you need to rebuild margin for The Estée Lauder Companies? That is the fourth pillar of Beauty Reimagined, which is how we create bold efficiency in the organization. We announced in November 2023 the PRGP, the Profit Recovery and Growth Plan. At the beginning, the G was not there. We added the G, if you remember, about really focusing on growth. It is, in a way, for everybody to understand, a simple way is how we're flipping the P&L on its head to have way less fixed costs and more variable costs. More viable costs to be able to invest in the business, but also more viable costs to go through volatility that seems to be the norm these days in the world. We will talk about it because the first year of the PRGP, which we are in today, it is a two-year program, our fiscal 2025 and fiscal 2026, the first year was really about rebuilding our gross margin and making sure that we are starting to just delay the organization. From a gross margin, we have made massive progress. Every quarter for the last three quarters, we have improved by 300 basis points our gross margin. We have committed to at least 73.5% gross margin and on our way to continuous improvement, but also delaying the organization for more agility and more speed. We have reduced the middle management by 20% already since the beginning of the fiscal year. Even my Executive Team, which is now 73% new in their position, has been reduced by 30%. Much more agile. We are seeing, obviously, the benefit of that faster decision, much more agility, and speed of decision. The last part, certainly, that I am somehow excited about every pillar of Beauty Reimagined, but the last one is how do we reinvent the ways of working for us internally? I have heard it from many of you that I have met over the last, even before I was officially in the position in the months of October, November, December, I spent a lot of time with everybody saying we need to clarify who does what within the Estée Lauder organization. I think today we are very clear between the brand, the region/the affiliate, and the function, who does what. Let me make it very simple and very blunt. The brands are focusing on the long-range vision, creating the best innovation. Once this is done, the regions are taking over and really executing and scaling with the affiliate and executing with excellence. The functions are here to really enable the vision. That is why at the last earnings calls at the beginning of April, I announced that we were moving officially the responsibility of the P&L into the region. There was like no misunderstanding of who takes decision. That was one of the reasons. There is also the second reason. If you want to move with speed, you need to be close to the consumer. The P&L needs to be much closer to the consumer. Somehow that is what the last 100+ days has informed. We are moving really fast. If you remember the Beauty Reimagined, we announced it with like maybe I was 35 days in the job officially working with the team and spent countless hours cascading that through the organization. I am very confident that we're starting to see the beginning of some green shoot with market share gain in the U.S., in China, in Japan, and some emerging markets. Our way to recovery and to growth is not a linear one because of the environment that we are in. I am really confident today with the team that we are going to rebuild growth and profitability. Great. One quick follow-up on the affiliate versus the brand. How much leeway do the individual affiliates or individual geographies have in sculpting the brand message for the locality versus the global brand kind of framework? Where does that decision, how does that make? That's a very good question, Steve. I think there's a lot more leeway these days because I think AI allows you also to be and to tailor the communication. One thing as a company that I believe we are very strong is our ability to have a local relevant message, depending if you are in India, if you are in China, if you are in France, you are in the U.S. I think the global brands define what you would call the top of the funnel. What is the desirability? What is the global message? Regardless of what capital of the world or city you sit in, there's a consistent message. The way you would talk about skincare, take an example with a Chinese consumer and an American consumer or an Indian consumer is very different. The ability through insights and data, the consumer can and our affiliate can do it. Just to give you an example, a few weeks ago, we have announced a partnership with Microsoft. We have created two proprietary tools. One that is called Consumer IQ, and the other one is called Trend Studio. Trend Studio, in a way, allows us to sense any type of trends and conversation in real time happening around the world. That is a proprietary tool that we have developed. Now, once you have the sensing, you would say, okay, many people can do that. The beauty of it is you marry it with a consumer tool, which is Consumer Q, which is mining all the data of The Estée Lauder Companies of the last 79 years. Mining the trend with our internal information allows us in real time to deploy new messages. AI is going to be here to allow, frankly, the tailoring of messages, communication on the ground in a much faster fashion going forward. Great. We have to supply the product to manufacture. You have to supply the product. Yes, please. That's the beauty of AI. Now we're working very closely on all those things. What Stéphane is saying, we're working on an AI application, which is an automatic deployment of stocks. What happens is, when we have those trends, the AI version that we're working on is looking at what is happening around the world and where is better, depending on where we anticipate the trend, to position the inventory to follow the trend real time, constantly, and actually learning from itself. The more we do it, the more it will become accurate. It's all basically the demand side and the supply side, and those actions are very, very connected. All ours. If you wanted to add. All our factories are digital twins now. We are able to just modelize in real time, depending on this trend, how we need to service inventory around the world. Once we agree on what it is, it can be just deployed in real time for production and deployment. Okay. I want to geek out in the supply chain a bit. Before I do, building these five pillars and unlocking the value of them, I think would be in some ways easier if there was robust demand kind of at your back, which I do not think is the case right now. It is very dynamic and choppy. I guess, what is your sense of the current environment? What are the key dynamics you are monitoring as you wrap up fiscal 2025 and plan fiscal 2026? Then stepping back, as you think longer term, how are you positioning the company? What are the key drivers of demand as you think longer term? How do you balance those two requirements? I think it's on everybody's mind. Where is the market east today and where is the market going? I have to say I've been blessed to be 25 years in the beauty industry. I've never seen so much volatility, but I sometimes saw much opportunity. I think you need to differentiate the cyclical and the structural trend that are happening in the market. Obviously, the cyclical one in the short term are affecting consumer confidence. I think it is, everybody knows it, like consumer confidence in China has been subdued now for more than two years because of the real estate situation and everything that has happened post-COVID. The U.S. has been the surprise low consumer confidence because we all went into the calendar year thinking the U.S. was going to be the driver of the economy in so many consumer goods products, including beauty. Europe has been also a little bit subdued for some time. I think that is linked clearly to some macroeconomic and political instability or volatility that happen. It can be still fairly high interest rates, inflation that has been ramping up for many years. I think that on the short term, I think shows that clearly the market is in the low single digit growth around the world. I think it is rebalanced by the fact that China has universalized the worst. I think China now is back into low positive territory, but still it helps mathematically to just maintain the world to this low single digit growth. Now, when you look at the more mid to long term, I think the structural changes that are happening are really positive for the industry. I think we are going to see industry resume with what is more mid to high single digit growth in the mid to long term. I just want to make sure that I'm not defining what mid to long term is because of the amount of volatility. 2026 is going to be a very defining year for many reasons because you have political changes. You have midterm in the U.S. You have the next 15-year plan of China that will be announced in March 2026. There are a lot of defining moments that could accelerate consumer confidence or just anchor it into a little bit longer what it is. On the structural changes, I see a few things that are happening in positive. The first one is the emergence of emerging middle class around the world. I think we call it well over 500 million consumers that will enter the middle class between now and 2030. When you think about beauty, prestige beauty, we're still fairly accessible luxury. Middle class consumers is definitely the pool of consumers that we're going to. Well over 500 million new consumers, of which some are coming well over 100 million from China. Then you have India. You have a lot also of emerging consumers in the U.S. and in continental Europe that we are tapping into, I think gives a lot of great new opportunity. Obviously, we need to adapt to these consumers. The second thing is, and surprisingly, the maturing of China makes China more predictable in the future. I think we went through, obviously, a downtrend post-COVID, but the maturing of China now, part of the maturing of China is also the rise of the local brands. There is still a balance between local and international that stays true. We've seen that in Japan. We've seen that in Korea. We've seen it in many markets. We're seeing it in India now. We are adapting as a company to also being able to just win in this market. We have a new innovation center that we inaugurated at the beginning of 2023 that is ramping up fast now with new innovation. We launched an innovation on Clinique Clinique CX that is on the post-procedure that was 100% developed, but we have many others. We also launched in February our 17th brand in China, The Ordinary, that is perfectly positioned from a price point to really compete with the local brands. I think the maturing of the market and the more predictability of the market and the 17 brands that we have in the portfolio give us that we have a lot more to tap into. After this, also many trends from the consumers that are very interesting that are going to develop new opportunity. Think about the wellness. In the post-COVID world, a lot of people are looking at wellness. We are all going to live younger longer. That is what we aim to. There is this amazing stat that I was looking at the other day that 50% of the kids below five years old in the U.S. will live over 100 years old. That's actually true in Europe and in many other markets. How obviously beauty plays a role in wellness, in longevity, et cetera. The male consumer also now, because of the rise of social media and platforms like Amazon, makes the accessibility of beauty much greater than it has been before. For the last 25 years, I've been hearing every year, oh, it's the year of men. It's not been until, obviously, platforms like Amazon, TikTok Shop makes it more easy for this consumer to access beauty. We're seeing already a fast acceleration with Jo Malone, for instance, we've launched Cypress & Grapevine with the actor Tom Hardy, the British brand and the actor. We've seen tremendous growth in triple digit in some of the markets, being able to capture a new consumer to the brand. I would say from a consumer standpoint, from a channel standpoint, there's a big evolution. Channels, as I said, that was the first pillar of Beauty Reimagined, allows us to just communicate with the consumers in a greater way than ever before. From a communication standpoint, also more platform. There's more retailer networks that you can tap into, which makes with AI, every dollar you spend much more efficient and much more tailored to every single person that is in this room and around the world. The ability to connect with a consumer in a deeper way now, it's much greater than what it was and will only get better in the years to come. I think when you look at all of that, I think in the midterm, it is true that the industry is under a lot of pressure because of the consumer confidence. I'm really confident because of the structural change that we are seeing and monitoring. We are adapting every single one of our brands and our ways of working to this new structural change to be able to just capture our fair share of the future growth. Great. Okay, great. Roberto, I'm very glad you're here because I think the supply chain at Estée Lauder has not got enough attention over the course of time. I think it's very important to the future execution of everything that Stéphane just articulated. Maybe you can just ground us a bit on where the supply chain has come from and where it is today and how you see it fit for need given the Beauty Reimagined strategy going forward. Yeah. First of all, thanks a lot for having us on stage. I'm very happy to be here and talk about supply chain. A few things. Where we come from first, you're saying. We come from a place of growth where actually the company was in building, investing in building capabilities and capacity ahead of anticipated growth. That's where we were. Now we are really focusing on leveraging what we have and optimizing, strongly optimizing those capabilities. That's where we are today. That's what we have done. That's where we are today. Three or four things that I can mention on what we have, the step change achievement we have done so far. I cannot start talking supply chain without mentioning, I think, what is the foundation of every supply chain program, which is the IBP, the Integrated Business Planning. Why that? Essentially, we work on understanding the demand. We demand plan. With the IBP, which is People, Process, Technology, basically what we are trying to do, understanding the demand is synchronizing all the supply chain, all the ecosystem with our sites, our suppliers, all the ecosystem of our supply chain to better fulfill this demand. That has been a significant focus in these few years because without this, it's very difficult to optimize all the other capabilities in a supply chain. We have done this, again, People, Process, Technology, but we have also built capabilities using this on scenario planning. As Stéphane was saying, the volatility is such that we can do a lot of effort to try to understand better the demand and then how do we synchronize. We need scenarios because it's such a volatility that it's very difficult to anticipate everything. We have prepared a lot of scenarios so that we can pivot quickly from one to the other when it's the case. That's the IBP. What have we really achieved with this? We've improved quite a lot, almost 10 points, actually 10 points, our forecast accuracy, which has led to keeping the service or actually improving our service to our customers to the consistently mid-90s, which is a solid performance. We have done that while we have strongly impacted our inventory level. Actually, when we started, we were well above the 200 days of COVID, significantly above the 200 days of COVID. We have taken out in excess of 80 days. It has been a massive, of course, improvement in that cash opportunity. That's something that we have done. As a base, this has also resulted in an opportunity to drive the gross margin journey that you have seen. That is, as Stéphane was mentioning, because with that, we have actually been able to bring the gross margin where it is today. We can see the journey of continuous improvement. A few other things in the gross margin that we have been working on in leveraging the capabilities. One starts with a zero waste mindset. We had waste and excess and obsoletes in our business. When we are closing the year, cutting by half the amount of excess and obsolete. In the last 12 months, we actually reduced by 50% that part, which is, of course, a big contribution to the gross margin. The second big contribution has been our procurement activities while buying ingredients and materials and components for our products. It's not only a procurement strategy, which we've been working quite a lot with, with spend area management, all the technicalities that you have in procurement, that is all done. It's a lot also from a value chain standpoint, creating platform to ensure that we have multiple components for same brands. Whatever is not consumer-facing can be leveraged, can be standardized so that we can scale up and, of course, leverage the volume in a different place. This has allowed us to move from a low single-digit saving year on year on our procurement activities to more than 5%. We're targeting a high single-digit saving. It's really, I mean, of course, a significant impact. That's the second part of the gross margin. The third part, which personally I'm very proud of, is we've been working on a couple of programs in our manufacturing performance that have manufacturing activities that have dramatically, I think, improved our manufacturing efficiencies. Actually, a large part of the majority of the PRGP that we are delivering so far comes from the gross margin, so it comes from those contributions. If I can, looking at the time, summarize what we've done, it is essentially two major programs in manufacturing. One really targeted at accelerating the performance improvement. It is really a significant push on performance. The other one in manufacturing, you need to make things sustainable. Otherwise, there is a risk that with the distributed network that we have, you accelerate, you improve, but six months after, if you're not sustaining it, it goes away. We have another program that is actually sustaining the performance that we achieve and strongly working on continuous improvement. The journey is there to continuous improvement. That is what we have done. Last that I like a lot to mention, even though quality has always been a significant attribute of the company, we have been focusing in leveraging capabilities there as well. We actually improved 80% in market quality issue. Our consumer complaints are reducing 20% year on year. Last year was 25%. A significant contribution, even in an era where the company has always been very strong. Lastly, how are we prepared, as you are saying, to cope with the current business need? I mean, we will never stop the continuous improvement. There is a lot ahead of us. AI is bringing a lot of opportunities. I personally feel we are in a very solid place. Actually, everything that I just said, we have achieved in a volume deleveraged environment. We have increased the gross margin to the level that Stéphane was mentioning in a volume deleveraged environment. We are very ready for volume leverage. By the way, we will not need any CapEx, any investment. Stéphane is insisting on we need to do consumer-facing. We need to free up. We will, we are freeing up. We are now freeing up CapEx because we do not need investment for capacity and capabilities. We have them. We can actually focus on making sure that we do consumer-facing investment and the volume leverage opportunity ahead of us. I think it will. That's a very important point that what Roberto is saying is like we are shifting from a company where we build, we used a lot of CapEx in terms of building capabilities to really now shifting CapEx into consumer-facing, which is going to be one of the areas which will allow us to grow. Also, one of the benefits of all of it, and it's well known in the prestige industry because in different areas of beauty, people are used to having different manufacturing networks around the world. In prestige, usually it's very concentrated in one location. This other company has nine sites around the world, five in North America, three in Europe, and one in Japan. That allows us, with now all what Roberto said in terms of agility, to move production in different places around the world. We have been able to mitigate a lot of the tariff impact on finished goods. Today, you look at Europe, where we are today, 75% of what we sell on a given day in Europe will come from Europe or outside of the U.S. 75% + of what we sell in the U.S. comes from the U.S. or Canada protected under the USMCA agreement. We have a line of sight that less than 10% of what we will sell in China will come from the U.S. That has basically been made possible because of this very agile and diverse manufacturing network that we have around the world. Yes. And just one question, because it was an issue during COVID, was the lack of robustness in terms of distribution centers. Is that remedied? It's totally different. We have actually one of the investments in the past the company has done is also in the distribution center. Galgenen was one of the main investments in a distribution center for travel retail. We've been doing this, but we've also been working on, aligned with what Stéphane was saying, on variable costs. We have opened, actually replaced most of the places where we were having our distribution center, especially in Asia-Pacific, with third-party distribution centers. We are completely covered. We have been investing in China. China was having only one distribution center. That was one of the challenges in terms of resilience that we had when the Shanghai lockdown started. We were only in Shanghai. Now we are actually multiplying multiple distribution centers in China as well. It's already now, already today, alive with the second one and the third one. We are in a very different place. I personally believe the fulfillment, the multi-channel fulfillment capability is absolutely there, 100% globally. It feeds both agility and business continuity. Absolutely. That is what you need today in today's environment because you need to just be agile to just move between one geography to the other. I mentioned multi-channel because as Stéphane was saying, as a beauty imagine, we're going where the customer, where the consumer is, and we can shift to different channels. We are actually having multi-channel fulfillment capabilities for that one. Wherever we go, I think the capability is there to fulfill. Not really. I know one thing investors then ask about, okay, the strategy is great. We believe in the execution. Here we go. Is the brand portfolio fit for purpose today? So what's your assessment, Stéphane, of the current brands you have, the ability to meet current needs, future needs? And how do you think about portfolio evolution, brand incubation, brand acquisition, even brand investment? No, I think it's obviously the question is on everybody's mind. One of the things we do, and I've said it publicly, every brand goes through a very thorough strategy review every year. This year, we've done it a little bit more in depth than usual, obviously being new in the position with a new executive team. There's something because of Beauty Reimagined, there's a possibility for us to just be able to reposition some of our brands where we have areas of improvement into new channels. Like I said at the beginning, I really believe that the portfolio of brands that we have allows us from all the way to La Mer, Le Labo, like in terms of luxury, all the way down to Clinique and The Ordinary to be able to tap into a very wide range of consumers. One of the things that I've said to the brand and asked the brand is really to just make sure that they have the right innovation for the right channel, the right consumer. Let me just very simply, because you think about from the Estée Lauder brand all the way to smaller brand. The Estée Lauder brand this year with a very fast turnaround has been able to just launch a new concealer under the very famous Double Wear franchise, which is number one foundation in the world. It's now been the number one makeup launch in the U.S. in 2025. You take Clinique has launched the Glow Moisture Surge at $45 or $39 a year in Europe. It's been the number one launch in serums around the world. You take Too Faced, one of our makeup brands, have launched what we call the Ribbon Lash Mascara that has been, the entire company has been developed in less than six weeks through AI and has allowed us to tap into new consumers. And Bumble and bumble has been our most well-over planned brand on Amazon. Now, if you know, like on Amazon, hair is one of the largest categories. So now all of a sudden, you can look at this brand and say, how am I going to position them in the new channels and making sure that they have the right innovation at the right price point, launch at the right speed. We are always looking and reevaluating our brands. I think today the focus is about reevaluating our brand to just make sure that they have the right innovation, right price point, right channel, right communication, because it's also one thing in the third pillar of Beauty Reimagined where we're inventing our ways of communicating, make sure that we are flipping also the funnel of communication on its head and just getting more efficiency behind each of our brands. The last thing I would say, we have internally an incubator. When we purchased DECIEM, of which The Ordinary was part in 2023, where we became finally the full owner of DECIEM. DECIEM was created as an incubator. That was the original idea. Today, beside The Ordinary, we have three other brands. We have NIOD, we have Avestan, and we just launched a new brand in bath and body, Loofah, that we've launched on TikTok and some other brands and our brand.com, which allows us to test in rapid fashion brands that we can develop in less than a year. There is going to be more to come. There is the organic, but there is also the inorganic growth that we can create from internally. Great. I think when investors look back, especially at the last five, six, seven years, China was so central to Estée Lauder's growth for that period of time. I think as we listen to you today, as we turn the page, look forward, the future is much more balanced. How do you think about the balance of growth and making sure that you are not just in the right channel, but the right geography and you have both from a brand and product, but also a supply perspective? Yeah. I think the best way to put it is I think about the world as the world, not as one geography, one consumer. I think the company has built tremendous strengths with the Chinese consumer. I want to be very clear, the future of China is still very strong because of the emerging middle class that will continue to come. I think we have positioned our strengths in this market. We have two of the top three brands in the market, and we intend to just build on 30 + years of investment in China. The very strong thing for us is the rebalancing of the growth. I would say the first thing is North America. We are very excited in the last quarter to announce that after many, many years, we were returning in growth. We have 10 brands that have maintained or grown market share in the last quarter, which was very strong. We had growth in three of the four categories, mainly skincare, makeup, and hair, where we had some growth. A big focus on investment and obviously Amazon, TikTok Shop, but also our historical partners in specialty multi like Ulta Beauty, Sephora, and the department stores. Obviously, what is on everybody's mind is reducing dramatically in terms of penetration to the total. There is a natural attrition because of numbers of stores and more investment in the top department stores where there is a lot of traffic. The second area is emerging markets. As part of my new organization, I have announced the creation of the emerging market regions. We did not have one. It was separated within different geography. Now the responsibility of Nadine Graf, who is now the Head of EUKEM. EUKEM is Europe, U.K., and all emerging markets that span from Turkey to India to Southeast Asia, Middle East, and so on. We have a real clear focus of acceleration. I'm not happy yet on the result that we're having on emerging market. We believe that there's a much stronger potential. Often brands like M.A.C or The Ordinary are perfectly positioned in terms of price point to be able to win in this market. I don't want to forget markets like the U.K. and Korea. Korea, we're the leader in this market. We've had some a little bit market share gain over the past few years, but we're not there yet. We have new leadership in both of these markets, in the U.K. and in Korea. We are really deploying Beauty Reimagined to just make sure that once we can consolidate our leadership position and start regaining market share. You saw in the result, we have the U.S., we have China, we have Japan. We still have a lot of work to do in other markets, but I think it's just a matter of deploying Beauty Reimagined and again, putting the right leaders in the right places. What is on everybody's mind is also travel retail. Travel retail has been a big source of growth for The Estée Lauder Companies for many years. We have reduced significantly the dependency on travel retail and I have announced it at the last call where we went from the mid-20s to mid-teens now in terms of penetration to the total business, which reduced the volatility to the channel. Now, travel retail has still a very strategic role to play. Many of you are traveling through the world. Airports are more beautiful places where you can express your brand in a way that is quite unique. Consumers are often buying for the first time product in travel retail. The volatility linked to the channel is here to stay, frankly, but also for us just to bring it back to a level that is more reasonable and having a much balanced growth around the world. We do not depend on one geography or one consumer the way that we've had it in the past. Great. We are out of time. So I will respect the conference and not add another question. Thank you very much. Thank you so much, Steve. I appreciate it.