Good afternoon, everyone. I'm Dara Mohsenian, Morgan Stanley's Household Products and Beverage Analyst. I'm very pleased to welcome Estée Lauder to Morgan Stanley's Luxury Conference. Just before we get started, I do have to note a quick disclosure. Please see the Morgan Stanley Research website at www.morganstanley.com for important research disclosures and reach out to your Morgan Stanley representative with any questions. Joining us today from Estée Lauder are CEO Stéphane de La Faverie and Nadine Graf, who's President of EMEA, U.K., and Ireland, and Emerging Markets. Thanks so much for being here, guys. We appreciate it. Our pleasure. Thank you for having us. Stéphane, I thought we could start out, it's been a 1.5 years, almost under your leadership- Yeah. ... and Beauty Reimagined. A lot of work has been put in place and internal improvement. Can you give us an update on what you think is working well so far in the five pillars that you've laid out? As being key to your strategy, where you've made the most strides, and maybe also some of the areas where you're looking for more traction- Yeah ... or drive even more progress? No, it makes sense. No. Thank you. Thank you, first of all, for having us. Glad to be here. Like, you know, today, first time I do this conference. When you think about it, like, almost like a 1.5 years, like you said, but who's counting the days. You know, every month feels like a year- Right. ... on what we've done in 1.5 years. Beauty Reimagined, as you know, when in February of 2025, when we launched it, was anchored on five pillars. The first one being, you know, the consumer coverage because the realization is when I took this position with the leadership team, is that we needed to put our brands in the channel of growth. We may not always had the right position, meaning in the U.S., in Europe, or in Asia, in channels, and we've expanded. Like, you know, today I'm very proud to say, like even on Amazon today we have like, you know, 12 brands in 10 different countries. We've expanded also on TikTok Shop. We've done in Asia, Shopee. We've also revisited our freestanding store network by accelerating the deployment of freestanding stores in the fragrance area, but, you know, optimizing also on the makeup and hair where we may not have had the best productivity. I think, you know, we've made some great progress here, and I think we will continue to do so. I think one of the thing that I'm the most proud of is the work that we've done with Nadine and her colleagues in North America, expanding our brands in Amazon, but also recently on Sephora, where we've launched M·A·C in Sephora in the U.S. and in the Middle East. In both cases, we have had some really good success that allows us to put this brand in the hand of like, you know, the younger consumer that we were targeting. The second areas of Beauty Reimagined has been innovation. I'm sure we can talk about it more in detail, but innovation's been really good for us because in the post-COVID world, we're seeing a need for more innovation. I made some really bold statement when we launched Beauty Reimagined, where we would increase the penetration of the business generated by innovation around 25%, but also triple the number of innovation coming to market in less than a year, in a year. Today we are already in the mid-high teens in that. We're making a lot of good progress on innovation. Then the third one, which obviously when you have the right distribution and the right innovation, is also about how much can you invest behind it, and we've increased our consumer-facing investment. Even the last quarter we were up 5% ex-FX, which really allows us to reignite the wheel of recruitment and retention behind our brands in various markets around the world. Then finally, this is just from a consumer-facing. Finally, the last two pillars, which is one, the PRGP, how do we create bold efficiency? You saw that this year with what we've guided for the year, we are going to make an improvement of like, you know, close at the higher end of the, of the range, like 300 basis points, you know, improvement. If you take what we've guided for now next year, we will be about 500 basis point of improvement. So enormous amount of transformation, which is linked finally to the final pillar, which is how to work together to create more agility. We brought a lot of new partners like, you know, Accenture, WPP, Shopify, that allows us to revisit our operating model to be a much more agile organization. We are the beginning of the journey. I think there's still a lot of work to do for us. But the confidence and the momentum that we are seeing with now three quarters in a row of positive growth, and we've guided to the top of the range in term of growth this year, is giving us confidence that at least the strategy is working and that we can continue to accelerate. As we're finishing the deployment of the PRGP, we can really focus on growth going forward. Great. Nadine, maybe on the same front, you can talk about the progress in the strategic pillars in your areas of responsibility, and also just perspective on, you know, culturally, how deep-rooted these changes have been in your regions or any perspective on the broader companies? Yeah. No, absolutely. With pleasure. I think one thing I can say is that Beauty Reimagined has fundamentally changed the way we are operating already across each and every market. This is not a theory of a transformation. This is really very, very operational. I think the way to look at it, as Stéphane explained, is the first three pillars are consumer-facing. This is where we have doubled down the most with regards to accelerating consumer capture, being where the consumer is, but really expanding the universe of the prestige consumer. It's not about the channel, it's about the positioning. Also on how we go to market, I think in terms of agility, in terms of speed, in terms of consumer centricity, proximity that we have never had before. Also the agility on how we're doing investments, and that has changed fundamentally in the way we have how we go to market. You've alluded to it, we have made some very pivotal shifts, I would say, in terms of where we play across our brands. We have launched eight brands on Amazon in the U.K. and in the European market just over the last eight months, believe it or not. The decision has been taken less than a year from now, and it's already out there executing, and it's growing fastly from an online perspective, so we can already see that in the number. It's 10 x faster than what actually it is on brick and mortar, literally, across the region. You also have got, on how we invest the agility, on how we're able to shift from a P&L responsibility standpoint across the different geographies. It's very important, especially with the volatility that we have. Because where there is demand, you need to double down. Where there is, some challenges, you will want to put it out. When we look also on the geographic clusters, you said it earlier, but we came with EUKEM as a new region where U.K. and Europe are under one roof just from a heritage and scale standpoint, where we've got a lot of similarities on the challenges that we need to address, versus bringing all the emerging markets across the globe together. Very powerful, not looking at one individually, but all together as a powerful future growth driver. The proof is in the pudding. It's already there. In Q3, you saw that we're growing double-digit already and really leveraging the full portfolio on how we're going to market. This is very encouraging and also something that we will see in the future as part of our growth strategy. Great. That's helpful. Stéphane, you touched on innovation contribution and the ramp-up you're seeing there. Obviously, that's a key linchpin of the Beauty Reimagined strategy. Can you just discuss how your innovation process has changed internally, so how you're generating this greater output? As we think about that output over the next couple of years, you mentioned the progress you made already. What are you expecting as you look out to fiscal 2027 and beyond in terms of a ramp-up in innovation contribution to sales? You know, I think it's a good question, and it's fundamental. I think I'm very proud of many of the innovation that we've launched to market, from La Mer The Rejuvenating Night Cream and the eye product or the new lipstick that we've launched on M·A·C, alongside all the different perfume that we've launched across our brand. I think fundamental what has changed is that we look at innovation in three different buckets. There's trend innovation, there's breakthrough innovation, and commercial innovation. The trend innovation, we've said we want to just bring product faster to market. We've reengineered our process. Sometime powered by AI, sometime by simplifying the way we're working. I've been very vocal on rebalancing internal and external innovation. We've been able to tap into innovation externally also, both in makeup and in skincare. Externally, we've worked with the likes of Intercos and Cosmax and others like in the past, but we've doubled down the work, you know, with them. It allows us to just bring product faster to market, simplifying the way that we operate with them. Also because of the way that we are delayering and simplifying our processes internally. Like I said earlier, we're very proud that we've been able to bring a lot of makeup product to market in six months or less. You know, this is makeup has always been, for us, the category that we knew on trend was needed to just go faster, where the consumer wants to see the new lip gloss. One other thing that I said when we launched Beauty Reimagined is to reignite demand behind our makeup brand, we needed to go after lip. What I'm very proud of in the U.S., in the last quarter, is we grew market share both in volume and in value with M·A·C and Clinique and Lauder, depending on the subcategories. That, for me, was an indication that we are reactivating the wheel of recruitment, because lipstick is often the category that you enter in for recruitment. You have breakthrough. Breakthrough takes a little bit more time. Think about skincare. Skincare, sometime it can take two to three years to development. We are now bringing product to market in 18 months. For instance, we have a new oil serum under the Estée Lauder brand that we've launched with the R&D center in China. We've been able to just do in 14, 15 months. That was never conceivable in the past, and we've because of reviewing completely our process. The last thing, that innovation is not only about new product. It's also how do you make sure that you put in the hand of the consumer the product they love, but you always find new ways to talk about it. You know, Double Wear, for instance, which is the number one foundation in the world with Estée Lauder. We've relaunched it. Obviously, but at the same time, we found new ways to talk about it. We've talked about, like, you know, the added benefit to the formula, which is not only a complexion and full coverage, but there's also, like, more breathable and so on and so forth. I think it has been revamping the processes, a lso bringing new talent in the organization. Our new Head of R&D, René Lammers, that comes from PepsiCo and Unilever, you know, in the past has allowed us to just also simplify our processes, rebalance internal and external. The last thing I would say from an innovation that has been very clear is what are the right prices? You know, at the moment where there's so much tension in consumer confidence around the world, we've been able to just reengineer our innovation also to be at the right prices. In lip, the success that we are seeing in the U.S. or we're seeing in Europe and in many markets, like even TOM FORD in Asia, is because we've been able to put the product at the right price point. I've been very clear with my team that every innovation we launch has to be accretive to gross margin going forward or the category we launch it. It's not that we are lowering or optimizing the price at the wrong cost of good, w e are doing it by optimizing gross margin and putting the right price. That's really allowing us to just reignite the wheel of recruitment. Okay. As you think about the multi-year innovation pipeline from here, should we see continued progress? Is it sort of linear progress as we look out over the next couple years? Give us a little bit of detail on the multi-year innovation. No, no, we will. Now, I think when you look at it, when we say about 25% of our innovation, of our business comes from innovation, it's about the right number. Now, it's about not necessarily more innovation. It's bigger, bolder, more breakthrough innovation. You're going to see a lot more in the areas of longevity, for instance, which is like, you know, a big trend that everybody's talking about. We have a lot of research on that front, multi-year research. Many of these products are coming under the Estée Lauder brand, you know, and, and even La Mer. On The Ordinary, you see constantly, like, you know, new ingredients. We have, like, you know, new [PD-IPDRN] product, which is also on the longevity at the price point of $10 that is coming to market. You're going to continue to see us doing breakthrough on ingredients, on technology across the four categories. Even on fragrances. You saw the last quarter. We published, like, you know, double-digit growth on fragrances. Because what our perfume, each on, like, TOM FORD, Jo Malone, Le Labo, KILIAN are all doing extremely well. We also have, like, you know, thriving new innovation. On TOM FORD, we have had Figue Érotique, you know, multiple new fragrances. We have had also on Le Labo, multiple city exclusive that we are launching around the world. You're going to see us continuing with this cycle of innovation because I think there's a clear demand across all the region for new all the time, and that allows us to just bring constantly new consumers. The last data point I would give you is with La Mer. We've launched a new regenerating eye cream across Asia, including China. We've brought 20% new consumers to the brand, on a brand that was already gaining market share in pretty much every market. Great. A lot of hard work and progress under the strategic pillars. Yes. I think- Still a lot of work to do. Yes. We're on the right momentum. You know, the question is, where do we get in terms of sort of sustainable organic sales growth going forward longer term? Maybe we can shift to some of the regions and- Absolutely. ... talk about progress so far and long-term expectations. China's been a big success story over the last year. You know, you've returned to consistent share gains, but it's also an incredibly competitive market. Yep. Just as you think out from here, A, d o you think you're back to sustainable share gains in China? What's really driven the improvement, h ow sustainable is that? What's structurally changed in the geography for Estée? Second, I just love your perspective on category growth here in China from here. There's obviously been an incredible amount of volatility in recent years- Yeah. ... but your perspective on category growth going forward would be helpful also. Yeah. No, I feel really confident about China. I've been in China, I think, 3 times this year. Like, you know, this year already, I'm going back in August. I think, first of all, our team on the ground are doing a fantastic work. I think in China has been, what, five quarters in a row that we have market share gain. If you look at the eight less quarter, I think, you know, out of the eight quarters, seven quarters, we've gained market share, which basically shows the continuous desirability of our brand. Let's not forget that The Estée Lauder Companies has been in China for 31 years now. We know the market for a very long time. We have adopted, especially the first market in the world, we are adopted this concept of local relevance. You know, Estée Lauder was the first brand to put a Chinese model on an advertising when nobody else was doing it in the beauty industry, and we've consistently done that over time. What has changed for us in China is for a very long time, our growth was dependent on Lauder and La Mer, our two largest brands. They remain our two largest brand. Today, we have a really diversified portfolio. We have TOM FORD that is growing double-digit. Jo Malone that is growing double-digit. I think we have Jo Malone growing 21% in the last quarter. We had Le Labo growing 70%+ in the last quarter. Le Labo is now the brand with the highest productivity per door in China. We're really diversifying the portfolio. We're seeing a market that is still obviously highly dependent on skincare, but they're rebalancing slowly but surely on the category. Remember that fragrances is only 5%-7% of the market, but we have very strong position there. We are also, like, growing. I feel a market that is more stable, you know, high single-digit growth in the market, and we are gaining market share there. The reason for it, despite the rebalancing of the brands and the category, is we've applied the same model of consumer coverage. One of the big analog for us has gone to be on Douyin, the equivalent of the Chinese, obviously, TikTok. That has allowed us to just capture a lot more newer consumers. At the same time, to make sure that we are preserving desirability and equity, we've ramped up the number of freestanding stores. This is actually the region of the world where we have the highest number of freestanding stores, which allow to dial up equity and experience for the brand. I feel really good about the work that the team is doing. I think it's sustainable. We have a plateau of innovation coming from China. Remember, the last thing that is important is two years ago, now it's the anniversary. Two years ago we've opened our research and innovation center in China, and it was about doing innovation in China for China. Now we are seeing the ramp-up and the fast acceleration across Lauder, La Mer. Now, we are entering all our brands into the research and innovation center to be able to do more innovations, which will allow us to reduce the cycle and to have product even more tailored. I think what is behind your question, do I worry about the local brand versus the international brand? As long as you know how to play in China in the multi-channel network and you are locally relevant, I think, you know, with the desirability we've built over the years, I think our growth is sustainable in the market. Okay. From a category growth perspective, it sounds like you think things are a bit more stable here going forward, and you've gotten back to a nice base of category growth. Just any perspective on any changes? Yeah. I think I think skincare, fragrances, haircare. Makeup is still, you know, it's still subdued. I think makeup is a little bit subdued everywhere around the world. Definitely like, you know, one, skincare is strong in China, obviously. Like, you know, the market is strong because it's still 65%-70% of the market is in skincare. Okay. It sounds like there's confidence behind the underlying drivers there. Any impact post Iran, does that impact the way you think about the market over the next, you know, few quarters here? For China specifically? For China. No. For the moment, honestly, no disruption. I think there was a visit over the last few days. Everything seems to be like, you know, going fine so far. You know, I don't know. I was not part of the conversation, but at least I didn't see any type of like major disruption in the market. You know, I cannot control like, you know, the geopolitical discussion. Right. At least from a consumer confidence, the last that maybe one thing that is interesting in China is one of the only market in the world that are seeing consumer confidence increasing over the last few months. Obviously, the world is in tumultuous moments. China is rebounding. Don't get me wrong, it's still not where it was pre-COVID. The fact that it's just going up, I think the real estate market is not as bad as what it used to be six months ago. The stock market in China is very strong. All of that is just rebuilding some consumer confidence. Beauty is part of their culture and one category that the Chinese consumer always gravitate towards. Okay, great. We're seeing some progress in the Americas. Yep. You haven't gotten back to- No. ... sustain organic sales growth yet. I know clearly there's been a bit more progress in retail sales than shipments. Just help us understand strategically where you are in your U.S. turnaround? Perhaps give us an update on your channel mix today, the growth you're seeing by channels. Obviously, that's an important part of the dynamic as you talked about earlier across the overall enterprise, but particularly in the U.S. Is there a line of sight to getting back to consistent organic sales growth as you look at the U.S. and Americas in general? To answer the last part of your question, yes. Can we go back to sustainable share again? Yes, we will get there. Are we there yet? No. The progress made by the team are pretty impressive because don't forget that we're coming from a decade of market share erosion for us. The fact that in the last quarter, we've been able to put the four category in volume share gain was very important for me and for the entire team that our strategy reignite recruitment. When you see volume share gain in every categories, it tells you that we are bringing new consumers to our brand. Now, obviously, we still have some work. We have skincare and haircare where we're going growing also in value, but we want to make sure that consistently every quarter on every brand, every category. We are still in a channel shift in the U.S. for us to be able to constantly reestablish this market share gain. The quick pivot that we've done to Amazon, to TikTok Shop, to opening like, you know, more direct -to- consumer business is also helping us there. We need to continue to rebalance it, and I've been very vocal that while we're not giving up on the department store, we still have, in some areas, too much dependency on the department store. We are rationalizing the tail of the department store. We've also, there's no need to hide it, we've also decided to discontinue brand from this channel to refocus on some other growth channel like specialty, multi, and online. I think we are in a journey of how... an d we're trying to do it as fast as possible without disrupting completely the market of rebalancing our distribution. Overall, when I see now volume share gain, it tells me that we are, like, in the right direction. We are going to get to some volume market share, value market share gain, also going forward. We have had some very interesting successes in makeup. We have four of our market brands that are gaining market share in the U.S. in the last quarter: Lauder, Clinique, M·A·C, and Bobbi Brown, which for us was like, you know, very important to see that it's still a big makeup market. On fragrances, we are doing, but we are playing what you see, what is captured by Circana is only a small piece of our business because all the direct- to- consumer where we play more is not captured there. We know when you start including the freestanding stores of Le Labo, or the freestanding stores of Jo Malone, KILIAN, and so on and so forth. We just have also some very good momentum on that front. A lot more work to do. I think we're coming from further away, but, you know, very confident that we are also, like, creating the right momentum. Great. We talked about U.S. and China volatility. Travel retail has been even a more volatile area in recent years. Just help us level set where we are today in terms of potential category growth going forward in the channel, key drivers there, and how you think about Estée's positioning today? In travel retail? In travel retail. Look. I think travel retail for me, we've done a lot of work over the past two years to reset the penetration of travel retail in our total business, b een very clear. Now we are at the mid-teens, which is about, like, industry, you know, average. We intend to just keep it at this level. Everybody knows it in this room. We had over-dependency on travel retail that happens to be the most volatile, you know, channel as we see it, like, you know, in this moment in time in the Middle East. We see some of the airports are pretty much, like, you know, shut down or with very limited amount of, you know, conversion in the stores because people are just having other things to think than just buying beauty or any other category of goods. I feel like now us having reset our penetration of travel retail. Obviously, it's a different story if you look at the East versus looking at the West. In the West, we were behind. We're catching up very quickly by deploying all our perfume brand, like Jo Malone, KILIAN, TOM FORD. If some of you are traveling throughout the European airport, you'll see a big difference on the presence of The Estée Lauder Companies. We're trying to repositioning our portfolio to what is the need and to cater most to the traveling consumer in this region, that it is people coming from the Middle East or from India. You know, British consumers, which are like, you know, some of like, you know, key consumers. On the other hand, on the East, what we're seeing a phenomenon, and everybody certainly has access to the information, is now a higher foot traffic in Hainan than pre-COVID. Now finally higher conversion. You remember there was a lot of, like, you know, traffic in Hainan, but very low conversion. Now we're seeing conversion, like, you know, growing. The Estée Lauder Companies is gaining significant market share in the channel. What we've done for Chinese New Year around Estée Lauder and La Mer as like, you know, creating really strong momentum. We're seeing the Chinese consumer starting to travel again only in the region, only in the East. They are not going West. They are. Their top three destinations are South Korea, Hong Kong, and Thailand. We're seeing that even in the moment where, Nadine will certainly say a few things about the emerging market, where the market in Thailand is suffering because of the impact of the war in Iran. The travel retail is booming because the Chinese consumers are going on vacation there because they just don't want to go anywhere else around the world. I think we're in the right place. Look, it will always be a more volatile channel. But I think the rebalancing of the West and the East and the penetration in the mid-teens to our total business in travel retail makes it really manageable for us. The last thing I would say, travel retail will and continue to remain a window for our brands around the world. Certainly, many of you have gone to Hainan or to Heathrow Airport or Dubai Airport, Singapore. This is some of the best expression of our brands around the world. Right. Nadine, maybe we can turn to EUKEM. Obviously, we saw some divergence in trends by country, even before the Iran conflict. Now we have the Iran conflict on top of that. I'd love to get a bit of a short-term update from you on what you're seeing in the region? Also, turning to the longer term, what do you think are the key growth drivers within the region, both from a business and geographic standpoint? Some of the markets that are doing better in that region, are there things you can apply to some of the laggard countries that drive a lot of improvement? Very true. That basically reflects exactly the strategy we're having. I'm starting with the most exciting part, which is the emerging markets, because this is where Beauty Reimagined is already very visible in the new setup that we're having. We're driving growth across the emerging markets 2x-3 x the global average overall. It's truly becoming a growth engine for the company going forward. We do that profitably. It's really driving profitable sales already as we speak, r epresenting today around 10% of our mix of business globally. This is where we wanna enlarge it quite significantly beyond the 15% in the long run. We have got the best possible strategy to really achieve that. It's already in the making. If you look at emerging markets, why are we so confident as well? You have to know that in some of the highest growth, emerging markets like India, Turkey, to a certain extent also the Middle East and Southeast Asia, we have very, very strong positionings as The Estée Lauder Companies. We have first mover advantage in many of them, and we are really leading prestige beauty in many of these markets. At the same time, you have got a high traction in fragrance where we're doubling down. You have got a high traction in trend-led makeup, in particular in the Middle East, and in India, which we're really tapping into. The other thing is we're talking about the young consumer. This is where more than 1 billion Gen Z consumer are, where there's online and the full digital ecosystem is really driven. We have a very clear go-to-market strategy, but not market by market. This is where we play the similarities, and I think it's important to understand this. This is where the new operating model comes into place. Clear alignment from global corporation brands, region, and catalyst affiliates on how we're gonna win and win big, which means sourcing recruitment, recruiting from mass, really positioning The Ordinary, M·A·C, brands that play the role from recruiting consumers from mass into prestige, scaling them across the different channels. Also fragrance. Fragrance is under-penetrated overall. We've got the right portfolio of brands to win. The second piece is really online acceleration. Online market is disproportionately growing. We are growing with that disproportionately with higher market shares online than we have offline, but also playing the ecosystem. We are entering Amazon in Brazil. We are doubling down on Trendyol, be it local or global players. Shopee across Southeast Asia. TikTok Shop in Southeast Asia and beyond. This is really the model that works for us. Today we are much more agile with regards to allocating the resources on the winning intersections that we have: brand, channel, retailer, and market. The third one I would really want to say is you win in emerging markets through local relevancy. You talked about it in China. It's so true for each and every single emerging market. Not only about having the right locally relevant face, it is really about being where it matters for that consumer, be it through Diwali, be it through Ramadan, all the local festivities and being in culture. Th is is where, with our strategy, we're creating locally relevant assets. A full ecosystem on who is representing the brand locally, but also reallocating investment into these moments disproportionately. We always say brand desirability is built globally, but the relevancy is really executed locally, and that's where we're doubling down, and we already see the first big wins coming from that way. Last but certainly not least, is really expanding prestige from an accessibility standpoint. When we want to recruit at scale, that means a lot of trial, so we're basically developing all our global iconic icons such as Black Honey, such as ANR, in mini sizes. Mini sizes, that we can really drive trial and consumption at scale, and that helps us with that recruitment. I think the last but certainly not least one is the recent acquisition of Forest Essential. Forest Essential, as you may have heard and read in the press, the latest acquisition. The number one prestige skincare brand in India. Why is it so interesting? It really sits at the intersection of India as one of the fastest growing prestige beauty markets globally. Secondly, the rise of local brands. Third, wellness and Ayurvedic beauty becomes a consumer trend across the globe. Having this as part of the portfolio is not only almost doubling our market share in India from an ELC market share standpoint, but really helping us to tap into another consumer that we potentially couldn't recruit with the portfolio that we're having. A great example on how this emerging market strategy is coming to life within the biggest markets, but also how we can scale it globally. Maybe a few words then on a very different dynamic. You asked about Europe and the U.K., right? Certainly much more challenging, much more demanding, structurally. Over-distributed across the prestige beauty overall, really shifting consumer dynamics into online more than ever. Still a very fundamental brick-and-mortar business that has been built historically. We see a lot of progress if you look, the ELC performance versus the market trends across Italy, Germany, but also the U.K. that we are certainly catching up. You see that the indie brands are really driving growth, and with our go-to-market across all the Beauty Reimagined pillars, we see already the shift happening. In April, we've been able to gain market shares across Germany, France, and also in Italy. In the U.K., we are back to grow from a retail standpoint. Slowly but surely you can see that there is a lot of progress happening, and at the very same time, we are true to ourself on what has to happen. First of all, fragrance. What you said as skincare is in China. More than 50%- 70% of the sales. This is what fragrance is in Europe. This is over-penetrated from a fragrance category standpoint for prestige beauty. We are right at the same, at the right moment in time to really leverage the portfolio. Not the only in luxury, but also going more into the ultra prestige positioning. Complexion, you talked about Double Wear. Complexion is our strength overall. This is where we're doubling down, so we're building on the strength. We're pivoting into where the consumer is from an online standpoint. You talked about Amazon, also TikTok Shop. We've opened TikTok Shop with M·A·C in the U.K. and in Germany. It's not only about the sales you do on TikTok Shop alone, it's the ecosystem that comes to life. M·A·C has historically a very strong DTC business with freestanding stores. What are we doing? We're basically transforming our freestanding stores into creation hubs, which means our makeup artists, they are creating content live in the store itself. This is how the full ecosystem comes to life. It's not only what we're transacting through the TikTok Shop, but how we're actually driving traffic and conversion through our stores at the very same time. That's very exciting. That's also kind of reenergizing the entire makeup category to start with. There are two structural resets that we do in Europe and the U.K., in particular when it comes to our brick-and-mortar business. Some decisive actions with regards to cutting some of the long tail, improving profit productivity, doing a selling restructuring in the sense of reallocating really the resources into the faster-growing channels. That's what we are executing as we speak. Stéphane keeps on talking about PRGP and the execution and everything that we're doing. That's really the next big wave that we are very confident. Not only in terms of taking cost out, but really in taking that and reallocating into growth, and that's probably the next important chapter. Looking ahead, you will see emerging markets continuously growing double digit ahead of the overall prestige beauty market growth in those markets, but also really a key growth driver for The Estée Lauder Companies globally. In Europe, we will keep on going for growth in the next chapter, being where the consumer is, number one. But also allocating the resources very decisively into the channels and in the areas. The intersections that we can definitely go after market share gains. Great. Stéphane, you gave us some early clarity on fiscal 2027 post Q3, fiscal Q3. First, just what gave you the confidence to go out early with the 3%-5% organic sales growth for fiscal 2027? You know, particularly given the Iran conflict and some volatility there, which you've, you know, quantified did have an impact in Q4. Just give us a sense behind your confidence there. Then B, as you think longer term, what are some of the key puts and takes to top line growth in fiscal 2027? You've made a lot of internal improvements, as you talked about. A skeptic could say, "Well, if we wanna get back to that mid-single digit range historically, right, we're still seeing some yield in fiscal 2027." How should we sort of think about fiscal 2027 when we think about the long-term top-line outlook? Yeah. If that makes sense. The first thing that why we put the guidance? A preliminary view earlier than usual is, one, because all of you have asked us basically, where are you going, because we were not guiding for quite some time. The second thing, you know, joke aside is I think we have momentum, and we know where the growth is coming from. When you see we are back to growth, not yet market share gain in the U.S. We are in market share gain in China. We are, you know, growing double-digit in emerging market, like Nadine said. We are growing online around the world. That is becoming a bigger part of our business, like, you know, across all the market that we felt really confident that, one, we could indicate that this year we will deliver the top end of our guidance. That was very, very clear for us. With one quarter to go, I think we have enough visibility to be able to go there. You know, and you say like in the midst of the Iran conflict and et cetera, Middle East for us is 2% of our business, where you include the local market and travel retail. You know, 2% is not nothing, but we can manage it. We are managing it. Nadine in the region is reallocating resources, obviously, as she described it. We have a much more agile model that allows us to redeploy resources around the world to capture the growth where it is in this moment in time. A lot of growth is coming from like, you know, from the U.S. It's coming from China. Also, like, you know, like Nadine said, even in the U.K., we are catching up, and we're catching up quickly with, like, you know, the market. That's what gives us the confidence. Next year, when I look at the pipeline of innovation that we have, the fact that we have a full year in most instances of new distribution, like Amazon in Europe, Amazon in the U.S., in Latin America, in Canada, you know, Shopee, TikTok Shop around the world. We're putting our brands into the hand of the consumer and where the growth is, like in market Sephora in the Middle East, in the U.S. Think about it, we've realigned, and I'm not saying it's over, but we've realigned a lot of our brands in the right channel, putting the investments. We're seeing the retail, like, you know, growing. Sometimes you said it in the U.S., the retail and the net is not totally aligned because we're still structurally changing few things. Ultimately, when the retail is here, I feel that we have the right momentum, the right distribution, the right innovation. PRGP is over in six weeks. In six weeks, we are done with all the cases. Remember, it was two years long of cases that they need to be approved. We still have 2027 to execute some of the cases that we've put, like you know, Nadine just mentioned, like for instance, the realignment of like you know, selling, you know, in the region. Which now the PRP goes away, and we're focusing on the G. We're focusing on growth, this is what we are as a team really focusing on growth. We gave a preliminary view that we believe we can grow anywhere between 3%-5%. At the midpoint to the high point of this preliminary view, we will be gaining market share globally. There is a lot of indicator with China and the U.S. being actually quite strong. Emerging markets strong. Online is strong with our innovation and the continuous emerging consumer coming to the category. Let's not forget, between now and 2030, there's 0.5 billion consumers that will enter the middle class in various places around the world, with India and China being the two lead market. The growth potential is there. For us, we didn't have access to the growth because we were not in the right growth channel. We did not have the right innovation, and we were not investing enough in consumer-facing. The PRGP has allowed us to just cut a lot of cost in SG&A to be able to reinvest and to grow, and that I think we are back into a growth algorithm. Now, one would say, "Yeah, but there's a lot of this disruption around the world." I think the PRGP has allowed us also to create an agile and flexible organization that allows us to redeploy allocation and funds in real time in Nadine's region or between the regions, between the brands, and really to just like, you know, avoid being disrupted by many of what is coming outside. That's great. So a lot of internal success. Maybe we can turn external for a bit. On the subject of M&A, you've announced some smaller deals. You've considered larger things as companies do from time to time. Just help us understand, is M&A a focus here, particularly given all the internal work you've done? How you think about the M&A strategy in this beauty environment where a lot of smaller fragmented brands are gaining share versus maybe larger type of deals? Just also put it in the context of the internal turnaround. Yeah. You know, if you're, you know, as you think about adding value longer term, how much you could add through M&A versus the internal work here? Like, let me start with the last point. I think this organizational change, and I've said it, is the biggest organizational leadership and cultural change in our company history in our 80 years. Many of what we've done, by the end of the calendar year 2026 will be done. All the work that we've done on enterprise business services with Accenture will be completed, all the transfer. We've already done a lot of things from an IT standpoint, from a consumer- care standpoint, from a CRM standpoint. We're really going super fast because we took really the time to plan correctly. By the end of the calendar year, we will be done. WPP, for the first time in our history, we took over 30 media company we were working around the world to just go to one centralized agency. Obviously, this agency has an office in Europe, an office in the U.S., an office in China, and so on and so forth. We're still able to just act locally. We have now the power of one media company working around the world that helps us to be much more efficient. We are in the midst of transferring everything. By the middle of Q1, we will be done with the full transfer. Shopify, you know, we've announced Shopify as a partner to just do all our DTC backend. We will have 50% of our operation turned to Shopify by the end of the calendar year. We have done already TOM FORD. We've done LAB SERIES. If you go to the TOM FORD sites, we have very strong indicators already of increased conversion, you know, thanks to the new technology that we've deployed. We are changing the ways of working. I would say from an operational standpoint, we are becoming a much more agile organization. This agile organization, why we want to do it? One, because you need to be much more agile in the world that we are in to be able to, like I said, deploy resources. Two, in the case of M&A, from small to mid-size to larger one. I believe that we are in a much better equipped company than in the past to do M&A and to be much more efficient and to scale fast. You will see Forest Essential. Obviously, we want to just win in India, but we want to bring Forest Essential to the world. I think today what we can bring to a brand like Forest Essential is ability to scale fast without having the costs of, like, the organization behind it, but having more the knowledge and the scale. 111SKIN, the minority investment we've just done. We have an entire way to just, like, help this brand because our idea is like, you know, if 111SKIN is successful, why not 111SKIN being part of the portfolio in the future? If there are opportunities for bigger deal, we will also go to do it the way we've done it with TOM FORD. We've done it with DECIEM in the past. DECIEM, look at it today, is one of the most successful skincare brand around the world, and frankly, in every region. Estée Lauder has always been part of the M&A conversation. We have had a moment of pause because we had to do the PRGP and the re-engineering of the company. We will go back to it because I believe we are going in a world where organic and inorganic are very important, and I think the share of inorganic is growing a little bit more. Organic is still very important, don't get me wrong. I don't believe that organic will be less so than inorganic. This ability to do it and scale matters. Scale matters for a lot of things, from a manufacturing standpoint, from a distribution standpoint, from an R&D standpoint. I think the company is going to be much more poised to just be able to do bigger deal in the future. It has to make sense from a complementarity of like, you know, the portfolio, obviously, the way we've always looked into it. Great. Well, with that, we're out of time. I feel like I have so many more questions, but we really appreciate you both being here today. Thank you, Dara. Thank you. Thank you.