Good afternoon, everyone. Thank you for attending the Deutsche Bank Industrials Conference. I am excited to have Fortune Brands' management team here, Jesse Singh, the CEO, Dave Barry, the COO, and Ashley George, the Interim CFO, with us today. I guess I'll just jump right in, and if there's questions in the room, please feel free to raise your hand, and we'll start peppering those in as well. I guess just starting, a lot of news at Fortune over the past couple of months. Jesse, you had your first earnings call with Fortune Brands. I guess just wanted to start on the strategic refocusing here. You called out the organization had become too internally focused. There's some corporate complexity that pulled attention away from customers. I guess, what are the most important structural or behavioral changes you guys are looking to make to reorient Fortune Brands around service, product innovation, customer responsiveness? Yeah. Excuse me. Thanks for the question and thanks for having me here. As you pointed out, it's been about six weeks that I've been on the job. I came into the role very excited about the opportunity of having really, really strong brands that have really good potential. Coming in, it's pretty obvious that that opportunity exists in a pretty meaningful way for the long term in particular. I think, as you pointed out, I highlighted a few things on the earnings call. I think number one, we've had a lot of change in the organization. We've obviously had some turnover in management, starting at the top. We had some activity at a board level, but we also made some changes relative to how we're organized and our headquarters consolidation, and all that's led to a lot of internal discussions in the company and a focus on perhaps at times the wrong things for the right reasons, which is how we operate. I think we're trying to refocus the company back to just our great brands and our great customers and really being focused externally. As part of that, we can better align our organization to operate in a way that's more focused on the customer and more focused on enabling our businesses to deliver against our customers, deliver it in a more profitable way, and also do it in a more streamlined and responsive way. That's helpful. I guess just product innovation came up a few times on the earnings call. Can you just touch a little bit about where you guys were in product innovation, sort of the guideline or the hope of where you're going to get that to and sort of the pathway to get there? Yeah, I think first, we've got to be oriented on the right customers and the right customer segments. We've got a lot of opportunity. There's areas where we've got good penetration. There's areas where we're under-penetrated, and product development is pretty straightforward, or innovation can be pretty straightforward, which is you need the right pipeline of opportunities. You need to understand where you have the right to win. You need to understand your internal capabilities, and then you need to make sure that you have the right processes to deliver against it. Coming in, over the last couple of years, we've probably under-indexed in terms of new product launches. I think with Dave at the helm over the last almost six months, we've been really focused on making sure that we restart our pipelines. I think in each of our businesses, we've got a pretty good list of potential new products and things that are in flight. I think if you look objectively, I would say that there's opportunities to really speed up how fast we bring products to market, and then when we bring new products to market, just really making sure that we do it in the right way and the most impactful way. I think coming in, as you look at, obviously, innovations in our name, there's a lot of opportunity for that. I think part of the realignment against businesses is just making sure that we launch more products that are relevant to our customers and do it in a bigger way. That's a great pivot to my next question, just around the commentary around decentralizing your capabilities. I guess, as you move the brand marketing and advertising resources back into the business units, I guess, what changes do you expect your customers or channel partners to actually feel, and I guess, how quick of a process is doing something like that? Well, first, as you pointed out, we've taken steps to realign. We've actually moved marketing back into the businesses. We had gone through a phase where we thought a more centralized organization in marketing would give us more scale and leverage. I think what we found in that centralization is we made it more complex. We became a bit slower, and we were less responsive to the opportunities. As we've realigned that back in the business, it should give us an opportunity to just be more responsive and execute in each of our businesses in a bigger way. I think it's going to be similar. We already talked about the new product side of things. I think it'll be similar in terms of our ability to execute on new products. I'll just give you a tangible example, like why do I think it's going to be faster? We've got a terrific Yale locks business, right? It's an interconnected lock business. It's one of our smaller businesses, but I think it's got good potential. To get some of the products through development would've required five separate organizations to be involved in just moving a new product through the organization. These are five separate functions within R&D. Then you add to that, you would've had a separate marketing function. You've got a separate supply chain function. You may have had a separate PR function. You may have had a separate digital function. So you think about the complexity of trying to execute a new product launch. That consolidation back towards and aligned against the businesses should really give us a lot of speed. The outcome to a customer should be better responsiveness, better service, and better engagement, especially from the channel side for more growth. That's helpful color. I guess on the timeline to do a lot of these things, I think on the call you mentioned by year-end, you expect the businesses to be realigned against these new priorities. I guess, what are two or three milestones investors should be watching for, whether that's service levels, new product launches-. Yeah. Cost savings, like to gauge whether the reset is working and on track on sort of that timeline? Yeah, I would say we're early days in terms of specifics, and I know it can be frustrating. We all want tangible things we can point to that are quantifiable. I would say if you think about what we talked about on the earnings call, some specifics, I think number one, when you think about our service levels, as we talked about, and I know you may have a question later on that, but as you think about our service levels, they have not been to the level that they should be. We are making changes, in particular on our Water business, to some of our processes, to make sure that we get back to the service levels that our customers expect and deserve. We would expect a lot of our service levels to come back to normal by the end of the year. We should continue to see improvement beyond that as we move into next year. Now we're incurring some premium air freight to get there. We may have some incremental inventory that we need to carry to deliver that. Hopefully, the air freight won't carry into next year, but we may have some excess inventory that we need to carry as we work our way to improving the process. I think we've talked about cost down in the organization. I think Dave at the two last earnings calls has talked about a $70 million cost takeout. We should expect all of that to be effectively done by the end of the year. In terms of the impact to the business from a cost and margin standpoint, we're balancing realigning, taking some cost out, but yet reinvesting in our businesses for the long term. When that balance works out so that the net of that is accretive margins, I think remains to be seen, and as soon as we get a better sense of that, we'll talk about it. But right now, you should think that in parallel, we're trimming some costs and expanding others as part of that realignment. Dave, I don't know if you have any other comments right on top of that. No, that's right. I guess just maybe diving a little bit into that, on the updated EPS guide, applied the roughly $0.30 of pressure, I think from all the actions that you guys are doing, $0.20 from the investments, 10% from that service level constraint. I guess, how should the investment community look at it as temporary catch-up spending versus maybe a more permanent step change because of all the product innovation you're investing in or something like that? Yeah. I'll start on that one, Colin. I think just first characterize the commercial environment, the operating environment, it's very consistent from last quarter when we reset guidance. What we're trying to give us some room for, one, is just around our execution on the service side. The $0.10 of volume that we called out is really our inability to go chase new business while we're having trouble fulfilling our existing business with our customers. We're pulling back on some areas that we probably would've leaned into in the second half until we can get our service right. The $0.20, I'd think of it in three buckets, and I can talk a bit in more detail about each three. So one is service-related investments. The second, I'd say new product development and commercialization associated with that. The third, some upper funnel brand building and marketing behind some of our new campaigns. On the service investment, what we're really trying to do is service our customers at their expectations while we're rebuilding our sales and operations process underneath. As we went through headquarters transition, the team that we had left sooner than expected, and we had to rebuild that team, and at the same time, we're rebuilding the process back to where it was when it was working prior. To compound things, we turned on a new system for Moen to plan that wasn't working. So you had a new team, a new system. We're in the process of unwinding that system, getting the team up to speed, and bringing some talent back that we let go to help accelerate that. Think of it as rebuilding the process underneath while investing, on top of that, on air freight, on distribution costs, like overtime, looking at some different supplier configurations that may be higher cost, but better service for a period of time, just to make sure we're delivering on our customer commitments. I would expect as we move into early next year that a lot of that overlaid investment starts to tail off as the underlying process comes up and is more mature. But as you know, these things, they take a few cycles to run through, especially when you're talking about a complex, long lead time supply chain. New product development, commercialization, Jesse touched on that. How do we get the right things to market faster? How do we work with our suppliers to pull things off the shelf, get them into market faster? How are we commercializing them with excellence once they're on the shelf to pull them through? The final bucket on the marketing piece, we launched a new Moen marketing campaign for the first time in a handful of years last quarter. Master Lock has a new campaign that we launched last year that's performing. How are we continuing to seed that upper funnel investment to drive awareness? I'd say both of those, it's probably a near term acceleration of investment that then either gets to a steady state or even pares back some as the organization starts to mature and the process starts to work a little bit better. Underneath these investments, though, we're pulling costs out of the business, and Jesse alluded to that as well. Where we have excess corporate costs, where we have resources that aren't aligned as closely as the business as they need to be, we're working on some of those structure items in the near term. That's really helpful color. I guess just following up maybe on the upper funnel investments, I guess, is there particular businesses that you feel require more attention than others, or is it going to be pretty proportional to the size of each business now? I guess how should we think about sort of where you think maybe you under-invested in either product innovation or marketing? My view, it is relatively proportional to the size of the business. I mentioned we have new campaigns in Moen and Master Lock. I think there is more we can do with Yale, and there is more we can do with Therma-Tru and Larson. It might look a little bit different than upper funnel investment, but still investment to drive the brand, but relatively proportional. That is awesome. Okay, and I guess just pivoting maybe to the service, and you alluded to some of the operational side of things. You talked about this a bit on the call, but I guess when you were talking about reverting processes that have historically worked better, what exactly has to be reset and how long does it take to be reset? Then sort of what gives you confidence that those service levels can return to baseline with maybe. Yeah. Not creating the excess inventory for a long period of time? Yeah, I am glad you mentioned inventory. We have taken constraints off of inventory for the near term while we work on service. I think you can expect our inventory to be a bit higher in the near term. We do believe there is a medium to long term benefit with inventory, but we need the process to work before we can get after that. We know how to do this. I mean, Ashley and I have been in the business a long time. Jesse has been in businesses where this works. All the way from demand planning through to delivering to the customer. It is rebuilding that process with the right talent, some of it new, some of it we have had in the past that we are bringing back that we lost through the headquarters transition. But we've executed on this in the past, so it's something that is very fixable and we know how to do it. It's just having it time, because the supply chain is six, eight weeks, if not longer in some cases. So you have to get the right forecasting inputs. You have to send the right signals to the supplier. You have to look at the right data and then pull all the way through the DCs to the customer. So at each step along that process, there were breakdowns that we're fixing. Okay. That's helpful. Jesse, do you got anything or? Yeah. As I mentioned earlier, and I think Dave's touched upon it, I think we'll be in a different place as we move through the end of the year. I think part of what we're recognizing is we want to make sure that we're a high quality, high service company, which we have been for many, many years. And we've had a short term variance against that. We'll get it back, but we're going to be thoughtful about not over promoting or doing something that's going to create excess stress on the system. And we're doing this for the long term. We're not here to try to ship a bunch of product out in one quarter or the other to try to hit a number. We're going to do what's right for the long term health of the business and for the long term health of our customers. I think that's an important overlay here. Which is part of why you've seen a bit of the variation on the guidance and all that. We just want to make sure that this is a fantastic business that's got enormous upside in multiple market segments. There's a lot of spaces where we have the right to compete in, and we want to make sure that we're doing things in a really thoughtful, measured way that leads to long term value creation. That's helpful. I guess following up really quickly on the right to win, is there a segment, particularly, whether that be channel or end market specific, where you think that's been under-penetrated at Fortune recently, in the recent past? Look, I wouldn't be a growth person if I didn't think there were multiple areas of under-penetration. I would say that if you just look at, numerically, if you look, for example, at the Moen business and the Therma-Tru business, we've had a really good business tied to single family new construction. That's a great business to be in always. It happens to be a business that's under pressure right now. The general theme I would give on the company is that we need to continue to expand in R&R, which tends to be a larger, more complex, more fragmented part of the market. And within there's a number of sub-segments where we think that we have the right brand, we have the right products, and we have the right to play, to use your question. We're going to be very selective about targeting some of those areas where we believe, in general, the R&R we're under-penetrated. We'll be select on targeting some of those areas and investing against that in all of our businesses. That's great color. I guess going back to the S&OP system really quickly, you mentioned kind of reverting and turning off a newer piece. Yeah. Is there going to be an additional layer of investments maybe in the future as you sort of modernize that process? Is there a next level that you guys need to be taking, and I guess, what's the timing and how does that sort of play out in the future? Yeah, my view, not a material investment. It's really getting back to the basics. We have functioning ERP systems where a lot of this work takes place, and just getting people trained up and understanding how the business works in those systems is really important. I think where we got into some trouble is trying to make these overlays on top of the core systems and use what appeared to be newer, better tools, and it didn't work. The implementations didn't work. Trying to unwind some of that. I also think it's interesting with AI, I think all of these systems implementations look different in the future than they have. That world is changing rapidly, so you don't want to start down a path of a significant implementation knowing it could look very different even six to nine to 12 months from now. Is there any questions in the room around the investments or anything like that? When you talk about reinvestment, does any of that require more favorable customer mix? The concept of reinvestment is to make the business stronger, to make our customers stronger, and to create more value. In my generic view of business, lowering price is not creating more value. It's a transactional move. I also fundamentally believe that we're in a market where people choose the right product for what they need, and you've got to have value in what you sell. But we sell faucets. What's our, like $10,000? We've got faucets in the multiple thousands of dollars. Yeah. And we have faucets that might be-. Hundred. Hundred. We have to deliver the right value there. I am not a big let's make a deal sort of a person. I am not going to say that there is not going to be appropriate actions along the way, but I think fundamentally when we are building this business, it is really about investing for value creation for both ourselves and our customers. Is there a portfolio review process you are going through in Fiberon? The question, by the way, for those that may not hear it is there a review process on the portfolio beyond Fiberon? I would say at a macro level, if you look at our portfolio, between our three core pillars and then our two, what I have defined as adjacencies, which is our two interconnect businesses, we feel really good about that in general. Now, within each of those, are there areas where we might need to de-invest, put on hold, deal with an operational issue, or deal with a geographic issue or optimize? We will absolutely look at that. Not at a corporate level. I guess maybe pivoting to the $70 million cost-savings program that you guys have in progress. I guess, any color as to where the most meaningful savings are coming from, and does the broader simplification work suggest the opportunity could ultimately be larger than just the $70 million that you guys are calling out? I guess just helping investors think about sort of the potential around that. Yeah. Happy to start and Jesse add color. I think if you just start and look outside in, the peer data and the benchmarking data would indicate there is a bigger opportunity than the $70 million. I think we have to be thoughtful around how we do that, when we do that, how we sequence it with investments that need to be made to get the business set up for success in 2027. But I think about the effort broadly as when we changed our structure, we created, I would say, over time, an outsized corporate piece, an outsized center supporting the business that both need to be taken down. One, reduce the corporate expense, and this is not all people cost, right? There is indirect spend. We have two buildings. As soon as Jesse started, we looked at our headcount. We are going to go down to one building, right? There's opportunity to reduce footprint, get indirect SG&A out. Then I think of it as moving the people who are in these centers back closer to the business. The one we talked about earlier that we executed last quarter was our marketing and our insights organization. As we did that, there are actually efficiencies that come out of it because you can align the resources more closely to what individual businesses need, and they're not in a center trying to fulfill everyone's needs. I think that's the genesis behind the 70, and we'll continue to work through it, but I just think of it as reducing that corporate structure to some extent. I think longer term I think we recognize that our SG&A as a percent to sales over a period of time has creeped up meaningfully. You could argue, what are the causes? We obviously spun a business out. There's all sorts of ways you could look at it. I think that over the long term, and you're going to ask what's the timetable on a long term, but as we move through 2027 into 2028, I think as we realign things, which might take some incremental investment, I think as we start to move through when the realignment's done and we've settled into our new business operating model, that we should definitely see SG&A leverage. I think part of my long-term view of our equation is that we should be able to operate in a more efficient way and an ongoingly efficient way from an SG&A standpoint. That's super helpful. Okay. I guess moving over to inflation, maybe price cost, and this might dovetail to one of the earlier questions around pricing. You guys increased the guide a little bit for the increased commodity cost. I think it was like a $10 million lift. You called out the metals being the primary driver. I guess, given the service disruptions, how confident are you in Fortune Brands' pricing power to really offset these rising inputs if inflation continues to accelerate as you look out into 2027 and 2028? Yeah. I'm happy to talk about 2026 price cost dynamics, if it's helpful. I'd say, in general, it's probably too early to start talking about 2027 at this point. We'll continue to focus on talking about our 2026 execution, and we'll come back probably a little bit later and talk about 2027. And I guess, on 2026-. Yeah. Then the pricing in the back half is probably tracking in line, even though with the service disruptions, I guess, how would you frame the conversation around that? Yeah. So if I look at 2026 dynamics, pricing at low single digits, and that's pretty consistent all year. Then as you look at the combination of tariffs and inflation, that price cost equation turns to favorable in Q4, and that's primarily driven by the year-over-year comp on tariffs being favorable by the time we get to Q4. And that's part, as you think about the guide, and one of the questions we've had from people saying, "You still have a bit of a margin step-up in Q4 that looks unusual based on your typical seasonality." There's 200 basis points of favorable price cost. The price is in the market, the cost is on the balance sheet. There's really good line of sight to that. Some of the cost-out activities start to accelerate as you get to the fourth quarter, and then we're making some investments to offset that. So the top line, it's not top-line driven. We're not betting on a market recovery or a big volume lift in the fourth quarter. It's purely what we're seeing in the market from a price standpoint, what's on the balance sheet, offset by some investments. Yep. I guess maybe longer term then in Water, that business has historically been super strong margins, right? Like at point to mid 20% even margins. Has the long-term margin in that business changed in your mind as you invest in things like as you accelerate product innovation or do the top of the funnel marketing like you called out or your supply chain or is it still really that level of profitability for that business longer term? Yeah, I think step one as we think about profitability, we've got to look at profitability of the enterprise. As we talked about, as I just mentioned earlier, I think that we should have an opportunity to get better SG&A leverage across the enterprise, which should allow us to reinvest, and we'll get that leverage even with reinvestment over the long term. But that should give us an opportunity to continue to invest in the businesses. Then, specific to Water, so I think that's the macro theme, independent. I don't know that we're going to be specifics on what's going to happen in each business unit. I think Water is a really good business where we have a differentiated product, and we just view it as a good market. What's the right balance of what our margin structure should be, given both our premium portfolio and our Moen portfolio? I think we'll communicate that more as we go through the cycle. I would say we're ready to communicate a bit at the macro. I think we've got to give a better indication in the future of just that blended mix. But there are actions we can take that are really independent of the market, think about improving our operational execution, that we think will be beneficial to that margin equation. Not just the short term, not just the lapping the service issues and all that. That's certainly part of it. Think about the inefficiency we've incurred. Those are all positive things. But there's also some tweaks we can make. There's parts of our portfolio that are. We make a lot of products in there. There's parts of the portfolio that are remarkably unprofitable that we have an opportunity to address. I think what I'd add maybe to just to contextualize the very near-term margins, like what you saw in the quarter for Water, there's 380 basis points of price cost unfavorability and 200 basis points of incremental cost to serve. Right? So about 580 basis point, almost 600 basis point headwind. Price cost will start to ease as we move into the first part of next year, through the fourth quarter of this year. We would expect cost to serve as well, as I talked about, we ramp up that process, starts to ease. Then you get into the discussion that Jesse laid out, is what's the right kind of medium to long-term margin based on our growth ambitions and our level of investment. All right. So, again, this question was sort of answered earlier, but I guess I'd be curious as to, it sounds like you view the security business and the outdoor businesses as being core. It's part of those three pillars I think you mentioned. I guess, what makes those business core in your view to Fortune, as we look to kind of understand the strategy of having those as parts of, I guess, the core, for lack of a better term? Yeah. I think your question is really around what is Fortune and what constitutes what the company is. Obviously, over a 20-year, a multi-decade period, I just ran into someone on the way in, who I chatted with briefly, and he said, "Well, I guess I should chat with you about golf balls." I'm like, "Yeah, that was a different iteration of Fortune." It wouldn't be bad right now, but it still wouldn't fix my golf game. Anyway, I think our focus right now is each of these business has opportunities to be meaningfully better. Part of that is this mix between corporate and business. The other part of it is each business has a good opportunity. There will be tweaks within the businesses, but each of the businesses has really good right to play opportunities. I think we need to get the business back to consistent positive footing and expansion in each of the areas that we play in. I think down the road, the corporate strategy of how all these fit together, I think is one that we can articulate in more detail in the past. I'm sorry, detail in the future. I think the strategy we've had in the past is fine for now. Our focus right now is just execution and getting the businesses back to where they should be at a business level. Then I think we can have a long-term discussion about how they fit together. Any more questions in the room? All right. I guess my last one then on capital allocation. Yeah. I mean, this is a little bit more near term, but I guess how quickly can you get sort of, you talked about the near term target being below 2.5x. How quickly can you get there? Then once you've reached that level, how should we think about your view on capital allocation going forward? Is it any different than historical Fortune Brands? Any thoughts there? Do you want to take the timing? Yeah. I mean, from a capital allocation framework, maybe just to step back for a second. We will focus first on incremental free cash flow generation. We will make the organic investments in the business that we have been talking about, whether it is execution, product development, brand. Therefore, there will be less focus of M&A investment in the near term. I would say the balance will be share repurchases balanced with getting to that net leverage target. So the 2.5 is the near-term target we have talked about. We should be approaching that, achieving that by the end of 2026, and then we will continue to evaluate where we go from 2.5. Over long term, it is probably something lower than that. But I would say from a near-term perspective, we should be there by year-end. Then to your what is different on the capital allocation. So if you go backwards, we invested a fair amount on acquisitions. I think for at least the near term, as I have highlighted multiple times, we like the three pillars plus the two adjacencies that we are in. If there were specific bolt-ons that would make those businesses better, we might consider it. But I think in general, our focus is going to be deploying capital against growth opportunities, and I am not guiding specifically, but obviously, software is, and the impact of technology as an asset, so maybe there is a little bit more capital there. Not meaningful, but incrementally more there. We do not spend a lot. We are not a capital-intensive business. We do not plan on becoming one. We have got plenty of assets. But if there is growth opportunities where we can organically invest, terrific. We will do that, and then tuck in acquisitions, and then the rest is, it would be appropriate to return that back to the shareholders in an accretive way. But obviously, if there is organic, you can get a great investment on organic, and very selectively inorganic, prior to that. I am not used to having a dividend, but it is part of our allocation to shareholders, but we need to also make sure that we do things like buybacks to be additive to that. I think the one thing I would build, just to remind people that it is not a very capital-intensive business. Yeah. Right? We are in a normal state, 3-ish percent of net sales for CapEx. About a percent of maintenance to balance for growth, cost out product development, and then in some capacity. As we look across our network, we are pretty well capacitized to capitalize on any volume upside that comes. Really helpful. I guess last call on questions in the room before we wrap up. All right. Awesome. I really appreciate the Fortune Brands team being here, Jesse, Dave, Ashley, this was great and super helpful. Thank you. That is great. Yeah. Thanks, Colin. Really appreciate it. Thanks for the time.