Estee Lauder Q2 2026 The Estée Lauder Co Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q2 2026 The Estée Lauder Co Inc Earnings Call
Speaker #1: Good day, everyone, and
Rainey Mancini: Good day, everyone, and welcome to the Estée Lauder Companies' Fiscal 2026 Q2 conference call. Today's webcast is being recorded. For opening remarks and introductions, I would like to turn the call over to the Senior Vice President of Investor Relations, Ms. Rainey Mancini.
Rainey Mancini: Good day, everyone, and welcome to the Estée Lauder Companies' Fiscal 2026 Q2 conference call. Today's webcast is being recorded. For opening remarks and introductions, I would like to turn the call over to the Senior Vice President of Investor Relations, Ms. Rainey Mancini.
Rainey Mancini: Good day, everyone, and welcome to the Estée Lauder Companies' Fiscal 2026 Q2 conference call. Today's webcast is being recorded. For opening remarks and introductions, I would like to turn the call over to the Senior Vice President of Investor Relations, Ms. Rainey Mancini.
Operator: Good day, everyone, and welcome to the Estée Lauder Companies' Fiscal 2026 Q2 conference call. Today's webcast is being recorded. For opening remarks and introductions, I would like to turn the call over to the Senior Vice President of Investor Relations, Ms. Rainey Mancini.
Speaker #1: welcome to the ESTE LAUDER COMPANY's fiscal 2026 second quarter conference call. Today's webcast is being recorded. For opening remarks and introductions, I would like to turn the call over to the Senior Vice President of Investor Relations, Ms. Rainey Mancini.
Speaker #2: Hello. On today's webcast are Stephane Faverie, President and Chief Executive Officer, and Akhil Shrivastava, Executive Vice President and Chief Financial Officer. Since many of our remarks today contain forward-looking statements, let me refer you to our press release and our reports filed with the SEC, where you'll find factors that could cause actual results to differ materially from those forward-looking statements.
Rainey Mancini: Hello. On today's webcast are Stéphane de La Faverie, President and Chief Executive Officer, and Akhil Shrivastava, Executive Vice President and Chief Financial Officer. Since many of our remarks today contain forward-looking statements, let me refer you to our press release and our reports filed with the SEC, where you'll find factors that could cause actual results to differ materially from those forward-looking statements. To facilitate the discussion of our underlying business, the commentary on our financial results and expectations is before restructuring and other charges and adjustments disclosed in our press release. Unless otherwise stated, all organic net sales growth also excludes the non-comparable impacts of acquisitions, divestitures, brand closures, and the impact of foreign currency translation. You can find reconciliations between GAAP and non-GAAP measures in our press release and on the investor section of our website.
Rainey Mancini: Hello. On today's webcast are Stéphane de La Faverie, President and Chief Executive Officer, and Akhil Shrivastava, Executive Vice President and Chief Financial Officer. Since many of our remarks today contain forward-looking statements, let me refer you to our press release and our reports filed with the SEC, where you'll find factors that could cause actual results to differ materially from those forward-looking statements. To facilitate the discussion of our underlying business, the commentary on our financial results and expectations is before restructuring and other charges and adjustments disclosed in our press release. Unless otherwise stated, all organic net sales growth also excludes the non-comparable impacts of acquisitions, divestitures, brand closures, and the impact of foreign currency translation. You can find reconciliations between GAAP and non-GAAP measures in our press release and on the investor section of our website.
Rainey Mancini: Hello. On today's webcast are Stéphane de La Faverie, President and Chief Executive Officer, and Akhil Shrivastava, Executive Vice President and Chief Financial Officer. Since many of our remarks today contain forward-looking statements, let me refer you to our press release and our reports filed with the SEC, where you'll find factors that could cause actual results to differ materially from those forward-looking statements. To facilitate the discussion of our underlying business, the commentary on our financial results and expectations is before restructuring and other charges and adjustments disclosed in our press release. Unless otherwise stated, all organic net sales growth also excludes the non-comparable impacts of acquisitions, divestitures, brand closures, and the impact of foreign currency translation. You can find reconciliations between GAAP and non-GAAP measures in our press release and on the investor section of our website.
Rainey Mancini: Hello. On today's webcast are Stéphane de La Faverie, President and Chief Executive Officer, and Akhil Shrivastava, Executive Vice President and Chief Financial Officer. Since many of our remarks today contain forward-looking statements, let me refer you to our press release and our reports filed with the SEC, where you'll find factors that could cause actual results to differ materially from those forward-looking statements. To facilitate the discussion of our underlying business, the commentary on our financial results and expectations is before restructuring and other charges and adjustments disclosed in our press release. Unless otherwise stated, all organic net sales growth also excludes the non-comparable impacts of acquisitions, divestitures, brand closures, and the impact of foreign currency translation. You can find reconciliations between GAAP and non-GAAP measures in our press release and on the investor section of our website.
Speaker #2: our underlying business, the commentary To facilitate the discussion of on our financial results and expectations is before we're structuring and other charges and adjustments disclosed in our press release.
Speaker #2: organic net sales growth, also excludes the Unless otherwise stated, all divestitures, brand closures, and the impact of foreign currency non-comparable impacts of acquisitions, translation.
Speaker #2: You can find reconciliations between GAAP and non-GAAP measures in our press release and on the investor section of our website. Retail sales performance discussed is based on information available as of January 29th, 2026.
Rainey Mancini: Retail sales performance discussed is based on information available as of 29 January 2026. As a reminder, references to online sales include sales we make directly to our consumers through our brand.com sites and through third-party platforms. It also includes estimated sales of our products through our retailers' websites. Throughout our discussion, the Profit Recovery and Growth Plan will be referred to as our PRGP. During the Q&A session, we ask that you please limit yourself to one question so we can respond to all of you within the time scheduled for this webcast. Now I'll turn the webcast over to Stéphane.
Rainey Mancini: Retail sales performance discussed is based on information available as of 29 January 2026. As a reminder, references to online sales include sales we make directly to our consumers through our brand.com sites and through third-party platforms. It also includes estimated sales of our products through our retailers' websites. Throughout our discussion, the Profit Recovery and Growth Plan will be referred to as our PRGP. During the Q&A session, we ask that you please limit yourself to one question so we can respond to all of you within the time scheduled for this webcast. Now I'll turn the webcast over to Stéphane.
Rainey Mancini: Retail sales performance discussed is based on information available as of 29 January 2026. As a reminder, references to online sales include sales we make directly to our consumers through our brand.com sites and through third-party platforms. It also includes estimated sales of our products through our retailers' websites. Throughout our discussion, the Profit Recovery and Growth Plan will be referred to as our PRGP. During the Q&A session, we ask that you please limit yourself to one question so we can respond to all of you within the time scheduled for this webcast. Now I'll turn the webcast over to Stéphane.
Rainey Mancini: Retail sales performance discussed is based on information available as of 29 January 2026. As a reminder, references to online sales include sales we make directly to our consumers through our brand.com sites and through third-party platforms. It also includes estimated sales of our products through our retailers' websites. Throughout our discussion, the Profit Recovery and Growth Plan will be referred to as our PRGP. During the Q&A session, we ask that you please limit yourself to one question so we can respond to all of you within the time scheduled for this webcast. Now I'll turn the webcast over to Stéphane.
Speaker #2: As a include sales we make directly to our consumers through our brand.com sites and through third-party platforms. It also includes estimated sales of our products through our retailer's websites.
Speaker #2: Throughout our reminder, references to online sales discussion, the profit recovery and growth plan will be referred to as our PRGP. During the Q&A session, we ask that you please limit yourself to one question so we can respond to all of you within the time scheduled for this webcast.
Speaker #2: Now I'll turn the webcast over to
Speaker #2: Stephane. Thank you, Rainey, and
Stéphane de La Faverie: Thank you, Rainey, and hello to everyone today. We reported strong second quarter results, marked the one-year anniversary of Beauty Reimagined, and raised our fiscal 2026 outlook... Our second quarter performance further exemplify the momentum we have created across our 5 action plan priorities. Having delivered 4% organic sales growth, our growth and operating margin expanded, and EPS grew 43%, showcasing once again our ability to manage expenses. For the first year, we made promises; we kept promises as we expanded our consumer coverage across online and brick-and-mortar in every region, overhauled our innovation engine with new leadership, faster to market launches, and a renewed consumer-first mindset. We increased Consumer-Facing Investment every quarter to accelerate recruitment, enabled by significant saving from the PRGP, and created one ELC, one new operating model, aligning brands, regions, and function as one team with one culture and one operating ecosystem.
Stéphane de La Faverie: Thank you, Rainey, and hello to everyone today. We reported strong second quarter results, marked the one-year anniversary of Beauty Reimagined, and raised our fiscal 2026 outlook... Our second quarter performance further exemplify the momentum we have created across our 5 action plan priorities. Having delivered 4% organic sales growth, our growth and operating margin expanded, and EPS grew 43%, showcasing once again our ability to manage expenses. For the first year, we made promises; we kept promises as we expanded our consumer coverage across online and brick-and-mortar in every region, overhauled our innovation engine with new leadership, faster to market launches, and a renewed consumer-first mindset. We increased Consumer-Facing Investment every quarter to accelerate recruitment, enabled by significant saving from the PRGP, and created one ELC, one new operating model, aligning brands, regions, and function as one team with one culture and one operating ecosystem.
Stéphane de La Faverie: Thank you, Rainey, and hello to everyone today. We reported strong second quarter results, marked the one-year anniversary of Beauty Reimagined, and raised our fiscal 2026 outlook... Our second quarter performance further exemplify the momentum we have created across our 5 action plan priorities. Having delivered 4% organic sales growth, our growth and operating margin expanded, and EPS grew 43%, showcasing once again our ability to manage expenses. For the first year, we made promises; we kept promises as we expanded our consumer coverage across online and brick-and-mortar in every region, overhauled our innovation engine with new leadership, faster to market launches, and a renewed consumer-first mindset. We increased Consumer-Facing Investment every quarter to accelerate recruitment, enabled by significant saving from the PRGP, and created one ELC, one new operating model, aligning brands, regions, and function as one team with one culture and one operating ecosystem.
Stéphane de La Faverie: Thank you, Rainey, and hello to everyone today. We reported strong second quarter results, marked the one-year anniversary of Beauty Reimagined, and raised our fiscal 2026 outlook... Our second quarter performance further exemplify the momentum we have created across our 5 action plan priorities. Having delivered 4% organic sales growth, our growth and operating margin expanded, and EPS grew 43%, showcasing once again our ability to manage expenses. For the first year, we made promises; we kept promises as we expanded our consumer coverage across online and brick-and-mortar in every region, overhauled our innovation engine with new leadership, faster to market launches, and a renewed consumer-first mindset. We increased Consumer-Facing Investment every quarter to accelerate recruitment, enabled by significant saving from the PRGP, and created one ELC, one new operating model, aligning brands, regions, and function as one team with one culture and one operating ecosystem.
Speaker #3: hello to everyone today. We reported strong second quarter results, marked the one-year anniversary of beauty reimagined and raised our fiscal 26 outlook. Our second quarter performance further exemplifies the momentum we have created across our five action plan priorities.
Speaker #3: Having delivered 4% organic sales growth, our growth and operating margin expanded, and EPS grew 43%, showcasing once again our ability to manage expenses. For the first year, we made promises—we kept promises—as we expanded our consumer coverage across online and brick-and-mortar in every region.
Speaker #3: Overall, our innovation engine—with new leadership, faster-to-market launches, and a renewed consumer-first mindset. We increased consumer-facing investment every quarter to accelerate recruitment, enabled by significant savings from the PRGP.
Speaker #3: And created one ERC, one new operating model aligning brands, regions, and functions as one team with one operating culture and one ecosystem. When we introduced beauty reimagined, our ambition was bold, executing the biggest operational leadership and cultural transformation in our history to become the best consumer-centric prestige beauty company.
Stéphane de La Faverie: When we introduced Beauty Reimagined, our ambition was bold: execute the biggest operational, leadership, and cultural transformation in our history to become the best consumer-centric prestige beauty company. Thanks to the passion, creativity, and resilience of our team around the world, we have come far in one year. Yes, there is more work to do, but much has been accomplished. In the first half of fiscal 2026, our global retail sales trend improved from Q1 to Q2, from down 4% to flat, as the decline in Travel Retail moderated. Even more encouraging, our retail sales grew 4% in the first half, excluding Travel Retail. In Mainland China, we outperformed prestige beauty in the quarter, again, with double-digit growth.
Stéphane de La Faverie: When we introduced Beauty Reimagined, our ambition was bold: execute the biggest operational, leadership, and cultural transformation in our history to become the best consumer-centric prestige beauty company. Thanks to the passion, creativity, and resilience of our team around the world, we have come far in one year. Yes, there is more work to do, but much has been accomplished. In the first half of fiscal 2026, our global retail sales trend improved from Q1 to Q2, from down 4% to flat, as the decline in Travel Retail moderated. Even more encouraging, our retail sales grew 4% in the first half, excluding Travel Retail. In Mainland China, we outperformed prestige beauty in the quarter, again, with double-digit growth.
Stéphane de La Faverie: When we introduced Beauty Reimagined, our ambition was bold: execute the biggest operational, leadership, and cultural transformation in our history to become the best consumer-centric prestige beauty company. Thanks to the passion, creativity, and resilience of our team around the world, we have come far in one year. Yes, there is more work to do, but much has been accomplished. In the first half of fiscal 2026, our global retail sales trend improved from Q1 to Q2, from down 4% to flat, as the decline in Travel Retail moderated. Even more encouraging, our retail sales grew 4% in the first half, excluding Travel Retail. In Mainland China, we outperformed prestige beauty in the quarter, again, with double-digit growth.
Stéphane de La Faverie: When we introduced Beauty Reimagined, our ambition was bold: execute the biggest operational, leadership, and cultural transformation in our history to become the best consumer-centric prestige beauty company. Thanks to the passion, creativity, and resilience of our team around the world, we have come far in one year. Yes, there is more work to do, but much has been accomplished. In the first half of fiscal 2026, our global retail sales trend improved from Q1 to Q2, from down 4% to flat, as the decline in Travel Retail moderated. Even more encouraging, our retail sales grew 4% in the first half, excluding Travel Retail. In Mainland China, we outperformed prestige beauty in the quarter, again, with double-digit growth.
Speaker #3: creativity, and resilience of our team around Thanks to the passion, the world, we have come far in one year. Yes, there is more work to do, but much has been accomplished.
Speaker #3: In the first half of fiscal 26, our global retail sales trend improved from the first to the second quarter, from down 4% to flat, as the decline in travel retail moderated.
Speaker #3: Even more encouraging, our retail sales grew 4% in the first half, excluding travel retail. In mainland China, we outperformed prestige beauty in the quarter again with double-digit growth.
Speaker #3: gained share for the We quarter and calendar year 25, showcasing the strong desirability of our brands compared to international and local peers. In Hainan, single-digit in the quarter, led our retail sales grew high by ESTE LAUDER and Lamer.
Stéphane de La Faverie: We gained share for the quarter and calendar year 2025, led by La Mer and Tom Ford, showcasing the strong desirability of our brands compared to international and local peers. In Hainan, our retail sales grew high single digit in the quarter, led by Estée Lauder and La Mer. In Japan, we outperformed prestige beauty in the quarter, driven by M·A·C and Le Labo. For calendar 2025, we gained share in France to strengthen our number one category rank. In the US, for the quarter and calendar 2025, we gained volume share in total prestige beauty. We also grew value share for the quarter and calendar 2025 in skincare, led by The Ordinary and haircare. In addition, Estée Lauder gained share in makeup for calendar 2025. These retail results and share trend reflect the exceptional execution of Beauty Reimagined over the last year.
Stéphane de La Faverie: We gained share for the quarter and calendar year 2025, led by La Mer and Tom Ford, showcasing the strong desirability of our brands compared to international and local peers. In Hainan, our retail sales grew high single digit in the quarter, led by Estée Lauder and La Mer. In Japan, we outperformed prestige beauty in the quarter, driven by M·A·C and Le Labo. For calendar 2025, we gained share in France to strengthen our number one category rank. In the US, for the quarter and calendar 2025, we gained volume share in total prestige beauty. We also grew value share for the quarter and calendar 2025 in skincare, led by The Ordinary and haircare. In addition, Estée Lauder gained share in makeup for calendar 2025. These retail results and share trend reflect the exceptional execution of Beauty Reimagined over the last year.
Stéphane de La Faverie: We gained share for the quarter and calendar year 2025, led by La Mer and Tom Ford, showcasing the strong desirability of our brands compared to international and local peers. In Hainan, our retail sales grew high single digit in the quarter, led by Estée Lauder and La Mer. In Japan, we outperformed prestige beauty in the quarter, driven by M·A·C and Le Labo. For calendar 2025, we gained share in France to strengthen our number one category rank. In the US, for the quarter and calendar 2025, we gained volume share in total prestige beauty. We also grew value share for the quarter and calendar 2025 in skincare, led by The Ordinary and haircare. In addition, Estée Lauder gained share in makeup for calendar 2025. These retail results and share trend reflect the exceptional execution of Beauty Reimagined over the last year.
Stéphane de La Faverie: We gained share for the quarter and calendar year 2025, led by La Mer and Tom Ford, showcasing the strong desirability of our brands compared to international and local peers. In Hainan, our retail sales grew high single digit in the quarter, led by Estée Lauder and La Mer. In Japan, we outperformed prestige beauty in the quarter, driven by M·A·C and Le Labo. For calendar 2025, we gained share in France to strengthen our number one category rank. In the US, for the quarter and calendar 2025, we gained volume share in total prestige beauty. We also grew value share for the quarter and calendar 2025 in skincare, led by The Ordinary and haircare. In addition, Estée Lauder gained share in makeup for calendar 2025. These retail results and share trend reflect the exceptional execution of Beauty Reimagined over the last year.
Speaker #3: In Japan, we outperformed prestige beauty in the quarter, driven by MAC and Le Labo. For calendar '25, we gained share in France to category rank.
Speaker #3: In the strengthen our number one US, for the quarter and calendar 25, we gained volume beauty, we also grew value share for the quarter and calendar 25 in skincare, led by The Ordinary, and haircare.
Speaker #3: In addition, for calendar 25. These retail results and share trend reflect the exceptional execution of beauty reimagined over the last year. For our first action plan priority, we moved rapidly to expand our portfolio presence in consumer-preferred, high-growth channels market media and price expanded our presence on Amazon Premium Beauty stores now with 12 brands across 10 markets.
Stéphane de La Faverie: For our first action plan priority, we moved rapidly to expand our portfolio presence in consumer preferred, high growth channels, market, media, and price tiers. We expanded our presence on Amazon premium beauty stores, now with 12 brands across 10 markets. We also announced our brand reach on TikTok Shop in the US and Southeast Asia, and launched our first brand in the UK and Germany. This work, coupled with strong performance on Temu, Douyin, JD, Notino, and Trendyol, drove high single-digit online organic sales growth in the first half, leading us to believe we outperformed prestige beauty in the channel. For fiscal 2026, online is on track to exceed the 31% of reported sales reach in fiscal 2025, as we increasingly tap into the full potential of this high growth channel.
Stéphane de La Faverie: For our first action plan priority, we moved rapidly to expand our portfolio presence in consumer preferred, high growth channels, market, media, and price tiers. We expanded our presence on Amazon premium beauty stores, now with 12 brands across 10 markets. We also announced our brand reach on TikTok Shop in the US and Southeast Asia, and launched our first brand in the UK and Germany. This work, coupled with strong performance on Temu, Douyin, JD, Notino, and Trendyol, drove high single-digit online organic sales growth in the first half, leading us to believe we outperformed prestige beauty in the channel. For fiscal 2026, online is on track to exceed the 31% of reported sales reach in fiscal 2025, as we increasingly tap into the full potential of this high growth channel.
Stéphane de La Faverie: For our first action plan priority, we moved rapidly to expand our portfolio presence in consumer preferred, high growth channels, market, media, and price tiers. We expanded our presence on Amazon premium beauty stores, now with 12 brands across 10 markets. We also announced our brand reach on TikTok Shop in the US and Southeast Asia, and launched our first brand in the UK and Germany. This work, coupled with strong performance on Temu, Douyin, JD, Notino, and Trendyol, drove high single-digit online organic sales growth in the first half, leading us to believe we outperformed prestige beauty in the channel. For fiscal 2026, online is on track to exceed the 31% of reported sales reach in fiscal 2025, as we increasingly tap into the full potential of this high growth channel.
Stéphane de La Faverie: For our first action plan priority, we moved rapidly to expand our portfolio presence in consumer preferred, high growth channels, market, media, and price tiers. We expanded our presence on Amazon premium beauty stores, now with 12 brands across 10 markets. We also announced our brand reach on TikTok Shop in the US and Southeast Asia, and launched our first brand in the UK and Germany. This work, coupled with strong performance on Temu, Douyin, JD, Notino, and Trendyol, drove high single-digit online organic sales growth in the first half, leading us to believe we outperformed prestige beauty in the channel. For fiscal 2026, online is on track to exceed the 31% of reported sales reach in fiscal 2025, as we increasingly tap into the full potential of this high growth channel.
Speaker #3: We also announced our brand reach on TikTok tiers, shopped in the US and Southeast Asia, and launched our first brand in the UK and Germany.
Speaker #3: This work, coupled with strong performance on Tmall, Dowing, Jelly, Notino, and Trendyol, drove high single-digit online organic sales growth in the first half, leading us to believe we outperformed prestige beauty in the channel.
Speaker #3: For fiscal 26, online is on track to exceed the 31% of reported sales reach in fiscal 25, as we increasingly tapped into the full potential of this high-growth channel.
Stéphane de La Faverie: We increased our presence in travel retail across the West, including with Duty Free Americas, as well as new and upgraded doors for our luxury fragrances in European and Middle Eastern airports, contributing to double-digit retail sales growth for fragrances across several major retailers in the first half of fiscal 2026. This strategic expansion is providing a double win, driving growth and diversifying our travel retail business. As we expanded our pharmacy reach in Europe and entered the channel in Latin America, while strengthening our ties in specialty multi with M·A·C up-and-coming launch in the US Sephora. For our second action plan priority, create transformative innovation, we focused on three areas of breakthrough, on-trend, and commercial. In China, innovation resonated especially strongly. Estée Lauder's three breakthrough launches in the longevity skincare science space contributed to its double-digit organic sales growth in skincare in the market.
Stéphane de La Faverie: We increased our presence in travel retail across the West, including with Duty Free Americas, as well as new and upgraded doors for our luxury fragrances in European and Middle Eastern airports, contributing to double-digit retail sales growth for fragrances across several major retailers in the first half of fiscal 2026. This strategic expansion is providing a double win, driving growth and diversifying our travel retail business. As we expanded our pharmacy reach in Europe and entered the channel in Latin America, while strengthening our ties in specialty multi with M·A·C up-and-coming launch in the US Sephora. For our second action plan priority, create transformative innovation, we focused on three areas of breakthrough, on-trend, and commercial. In China, innovation resonated especially strongly. Estée Lauder's three breakthrough launches in the longevity skincare science space contributed to its double-digit organic sales growth in skincare in the market.
Stéphane de La Faverie: We increased our presence in travel retail across the West, including with Duty Free Americas, as well as new and upgraded doors for our luxury fragrances in European and Middle Eastern airports, contributing to double-digit retail sales growth for fragrances across several major retailers in the first half of fiscal 2026. This strategic expansion is providing a double win, driving growth and diversifying our travel retail business. As we expanded our pharmacy reach in Europe and entered the channel in Latin America, while strengthening our ties in specialty multi with M·A·C up-and-coming launch in the US Sephora. For our second action plan priority, create transformative innovation, we focused on three areas of breakthrough, on-trend, and commercial. In China, innovation resonated especially strongly. Estée Lauder's three breakthrough launches in the longevity skincare science space contributed to its double-digit organic sales growth in skincare in the market.
Stéphane de La Faverie: We increased our presence in travel retail across the West, including with Duty Free Americas, as well as new and upgraded doors for our luxury fragrances in European and Middle Eastern airports, contributing to double-digit retail sales growth for fragrances across several major retailers in the first half of fiscal 2026. This strategic expansion is providing a double win, driving growth and diversifying our travel retail business. As we expanded our pharmacy reach in Europe and entered the channel in Latin America, while strengthening our ties in specialty multi with M·A·C up-and-coming launch in the US Sephora. For our second action plan priority, create transformative innovation, we focused on three areas of breakthrough, on-trend, and commercial. In China, innovation resonated especially strongly. Estée Lauder's three breakthrough launches in the longevity skincare science space contributed to its double-digit organic sales growth in skincare in the market.
Speaker #3: in travel retail across the We increased our presence West, including with duty-free America as well as new and upgraded doors for our luxury fragrances in European and Middle Eastern airports, contributing to double-digit retail sales growth several major retailers in the first half of fiscal for fragrances across 26.
Speaker #3: This strategic expansion is providing a double win, driving growth and diversifying our travel retail business. As we expanded our pharmacy reach in Europe and entered the channel in Latin America, while strengthening our ties in specialty multi with MAC's up-and-coming launch in the US Sephora.
Speaker #3: For our second action plan priority, create transformative innovation, we focused on three areas of breakthrough, on-trend, and commercial. In China, innovation resonated especially strongly, ESTE LAUDER's three breakthrough launches in the longevity skincare science space contributed to its double-digit organic sales growth in skincare in the market.
Speaker #3: Our China innovation lab created Renutrives Oil in 15 months, quick for skincare, and demonstrating how we accelerating our speed to market. And Tom Ford's strong double-digit organic sales growth in China was driven by highly sought-after on-trend launches in lip and face as well as fragrance.
Stéphane de La Faverie: Our China innovation lab created Re-Nutriv Oil in 15 months, quick for skincare and demonstrating how we are accelerating our speed to market. And Tom Ford, strong double-digit organic sales growth in China, was driven by highly sought after on-trend launches in lip and face, as well as France. Globally, The Ordinary's innovation and expanded consumer reach drove strong double-digit retail sales growth in the first half, demonstrating that our new model allows us to support growth for our own indie brands to drive greater scale.... For makeup, Estée Lauder's Double Wear concealer has been a game-changer in the US, achieving the top-ranked new product in prestige makeup based on units for calendar year 2025. Within haircare, Aveda's new Miraculous Oil catapulted to be the brand's top-selling product through the first half.
Stéphane de La Faverie: Our China innovation lab created Re-Nutriv Oil in 15 months, quick for skincare and demonstrating how we are accelerating our speed to market. And Tom Ford, strong double-digit organic sales growth in China, was driven by highly sought after on-trend launches in lip and face, as well as France. Globally, The Ordinary's innovation and expanded consumer reach drove strong double-digit retail sales growth in the first half, demonstrating that our new model allows us to support growth for our own indie brands to drive greater scale.... For makeup, Estée Lauder's Double Wear concealer has been a game-changer in the US, achieving the top-ranked new product in prestige makeup based on units for calendar year 2025. Within haircare, Aveda's new Miraculous Oil catapulted to be the brand's top-selling product through the first half.
Stéphane de La Faverie: Our China innovation lab created Re-Nutriv Oil in 15 months, quick for skincare and demonstrating how we are accelerating our speed to market. And Tom Ford, strong double-digit organic sales growth in China, was driven by highly sought after on-trend launches in lip and face, as well as France. Globally, The Ordinary's innovation and expanded consumer reach drove strong double-digit retail sales growth in the first half, demonstrating that our new model allows us to support growth for our own indie brands to drive greater scale.... For makeup, Estée Lauder's Double Wear concealer has been a game-changer in the US, achieving the top-ranked new product in prestige makeup based on units for calendar year 2025. Within haircare, Aveda's new Miraculous Oil catapulted to be the brand's top-selling product through the first half.
Stéphane de La Faverie: Our China innovation lab created Re-Nutriv Oil in 15 months, quick for skincare and demonstrating how we are accelerating our speed to market. And Tom Ford, strong double-digit organic sales growth in China, was driven by highly sought after on-trend launches in lip and face, as well as France. Globally, The Ordinary's innovation and expanded consumer reach drove strong double-digit retail sales growth in the first half, demonstrating that our new model allows us to support growth for our own indie brands to drive greater scale.... For makeup, Estée Lauder's Double Wear concealer has been a game-changer in the US, achieving the top-ranked new product in prestige makeup based on units for calendar year 2025. Within haircare, Aveda's new Miraculous Oil catapulted to be the brand's top-selling product through the first half.
Speaker #3: Globally, The Ordinary's innovation and expanded consumer reach drove strong double-digit retail sales growth in the first half, demonstrating that our new model allows us to support growth for our own indie brands to drive greater LAUDER's double-wear concealer has been a game-changer in the US, achieving the top-ranked new product in prestige makeup based on unit for calendar year 25.
Speaker #3: Within haircare, Aveda's new Miraculous Oil catapulted to be the brand's top-selling product through the first half. For fiscal innovation to represent at least 25% 26, we are on track for toward increasing the percentage of of sales, and as we worked innovation launched in less than a year from 10 to 30%, we are tracking to 19% for fiscal 26, above the 16% we initially expected.
Stéphane de La Faverie: For fiscal 2026, we are on track for innovation to represent at least 25% of sales. As we work toward increase the percentage of innovation launched in less than a year from 10% to 30%, we are tracking to 19% for fiscal 2026, above the 16% we initially expected. Turning to our third action plan priority, we boosted consumer-facing investment focused on high ROI opportunities. We invested in our freestanding stores, opening new door for our luxury brands to showcase their unit experiential retail, while selectively closing doors for M·A·C and Origins to drive a more productive fleet. Impressively, Le Labo's strong double-digit organic sales growth in the first half of fiscal 2026 reflects its expanded reach, as well as double digit like-for-like door.
Stéphane de La Faverie: For fiscal 2026, we are on track for innovation to represent at least 25% of sales. As we work toward increase the percentage of innovation launched in less than a year from 10% to 30%, we are tracking to 19% for fiscal 2026, above the 16% we initially expected. Turning to our third action plan priority, we boosted consumer-facing investment focused on high ROI opportunities. We invested in our freestanding stores, opening new door for our luxury brands to showcase their unit experiential retail, while selectively closing doors for M·A·C and Origins to drive a more productive fleet. Impressively, Le Labo's strong double-digit organic sales growth in the first half of fiscal 2026 reflects its expanded reach, as well as double digit like-for-like door.
Stéphane de La Faverie: For fiscal 2026, we are on track for innovation to represent at least 25% of sales. As we work toward increase the percentage of innovation launched in less than a year from 10% to 30%, we are tracking to 19% for fiscal 2026, above the 16% we initially expected. Turning to our third action plan priority, we boosted consumer-facing investment focused on high ROI opportunities. We invested in our freestanding stores, opening new door for our luxury brands to showcase their unit experiential retail, while selectively closing doors for M·A·C and Origins to drive a more productive fleet. Impressively, Le Labo's strong double-digit organic sales growth in the first half of fiscal 2026 reflects its expanded reach, as well as double digit like-for-like door.
Stéphane de La Faverie: For fiscal 2026, we are on track for innovation to represent at least 25% of sales. As we work toward increase the percentage of innovation launched in less than a year from 10% to 30%, we are tracking to 19% for fiscal 2026, above the 16% we initially expected. Turning to our third action plan priority, we boosted consumer-facing investment focused on high ROI opportunities. We invested in our freestanding stores, opening new door for our luxury brands to showcase their unit experiential retail, while selectively closing doors for M·A·C and Origins to drive a more productive fleet. Impressively, Le Labo's strong double-digit organic sales growth in the first half of fiscal 2026 reflects its expanded reach, as well as double digit like-for-like door.
Speaker #3: Turning to our third action plan priority, we boosted consumer-facing investment, focused on high ROI opportunities. We invested in our freestanding stores, opening brands to showcase their unique experiential retail, while selectively closing doors for new doors for our luxury fragrance MAC and Origin to drive a more productive fleet.
Speaker #3: Impressively, Le Labo's strong double-digit organic sales growth in the first half of fiscal 26 reflects its expanded reach as well as double-digit like-for-like door.
Speaker #3: We also invested in groundbreaking campaigns for commercial innovation, with several notable for MAC, which contributed to the brand's return to organic sales growth in the first half of fiscal '26.
Stéphane de La Faverie: We also invested in groundbreaking campaigns for commercial innovation with several notable for M·A·C, which contributed to the brand's return to organic sales growth in the first half of fiscal 2026. La Mer campaigns for 11.11 shopping festival and holiday also proved to be a winning investment, contributing to La Mer being our best performing brand for the first half of fiscal 2026, given its organic sales growth. For our fourth action plan priority, fuel sustainable growth through bold efficiencies. We continue to realize strong savings from the PRGP, which Akhil will describe. I want to personally thank the team for working together with speed to bring this to fruition.
Stéphane de La Faverie: We also invested in groundbreaking campaigns for commercial innovation with several notable for M·A·C, which contributed to the brand's return to organic sales growth in the first half of fiscal 2026. La Mer campaigns for 11.11 shopping festival and holiday also proved to be a winning investment, contributing to La Mer being our best performing brand for the first half of fiscal 2026, given its organic sales growth. For our fourth action plan priority, fuel sustainable growth through bold efficiencies. We continue to realize strong savings from the PRGP, which Akhil will describe. I want to personally thank the team for working together with speed to bring this to fruition.
Stéphane de La Faverie: We also invested in groundbreaking campaigns for commercial innovation with several notable for M·A·C, which contributed to the brand's return to organic sales growth in the first half of fiscal 2026. La Mer campaigns for 11.11 shopping festival and holiday also proved to be a winning investment, contributing to La Mer being our best performing brand for the first half of fiscal 2026, given its organic sales growth. For our fourth action plan priority, fuel sustainable growth through bold efficiencies. We continue to realize strong savings from the PRGP, which Akhil will describe. I want to personally thank the team for working together with speed to bring this to fruition.
Stéphane de La Faverie: We also invested in groundbreaking campaigns for commercial innovation with several notable for M·A·C, which contributed to the brand's return to organic sales growth in the first half of fiscal 2026. La Mer campaigns for 11.11 shopping festival and holiday also proved to be a winning investment, contributing to La Mer being our best performing brand for the first half of fiscal 2026, given its organic sales growth. For our fourth action plan priority, fuel sustainable growth through bold efficiencies. We continue to realize strong savings from the PRGP, which Akhil will describe. I want to personally thank the team for working together with speed to bring this to fruition.
Speaker #3: Lamer campaigns for 11/11 shopping festival and holiday also proved to be a winning investment, contributing to Lamer being our best-performing brand for the first half of fiscal 26, given its organic sales growth.
Speaker #3: For our fourth action plan priority, fuel sustainable growth through bold, efficient fees. We continue to realize strong savings from the PRGP, which Akhil will describe.
Speaker #3: I want to personally thank the team for working together with speed to bring this fruition. Finally, for our fifth action plan priority, our step to reimagine the way we work evolves today as we unveil one ERC, our new operating model aligning brands, region, and function as one team with one ecosystem.
Stéphane de La Faverie: Finally, for our fifth action plan priority, our step to reimagine the way we work evolves today as we unveil One ELC, our new operating model, aligning brands, regions, and functions as one team with one culture and one operating ecosystem. We have simplified our structure in support of one team with fewer layers and silos, along with clearer ownership, to make it easier to get things done and done well. Guided by our newly announced beauty commitment to our team, we are leaning into one culture of bold thinking, accountability, agility, unity, and focus. Lastly, we have advanced our work to create a robust operating ecosystem for more connected and scalable enterprise. In the second quarter, we've established our new enterprise business services, selecting Accenture to transform how we deliver select shared services globally as we accelerate the deployment of AI throughout the organization.
Stéphane de La Faverie: Finally, for our fifth action plan priority, our step to reimagine the way we work evolves today as we unveil One ELC, our new operating model, aligning brands, regions, and functions as one team with one culture and one operating ecosystem. We have simplified our structure in support of one team with fewer layers and silos, along with clearer ownership, to make it easier to get things done and done well. Guided by our newly announced beauty commitment to our team, we are leaning into one culture of bold thinking, accountability, agility, unity, and focus. Lastly, we have advanced our work to create a robust operating ecosystem for more connected and scalable enterprise. In the second quarter, we've established our new enterprise business services, selecting Accenture to transform how we deliver select shared services globally as we accelerate the deployment of AI throughout the organization.
Stéphane de La Faverie: Finally, for our fifth action plan priority, our step to reimagine the way we work evolves today as we unveil One ELC, our new operating model, aligning brands, regions, and functions as one team with one culture and one operating ecosystem. We have simplified our structure in support of one team with fewer layers and silos, along with clearer ownership, to make it easier to get things done and done well. Guided by our newly announced beauty commitment to our team, we are leaning into one culture of bold thinking, accountability, agility, unity, and focus. Lastly, we have advanced our work to create a robust operating ecosystem for more connected and scalable enterprise. In the second quarter, we've established our new enterprise business services, selecting Accenture to transform how we deliver select shared services globally as we accelerate the deployment of AI throughout the organization.
Stéphane de La Faverie: Finally, for our fifth action plan priority, our step to reimagine the way we work evolves today as we unveil One ELC, our new operating model, aligning brands, regions, and functions as one team with one culture and one operating ecosystem. We have simplified our structure in support of one team with fewer layers and silos, along with clearer ownership, to make it easier to get things done and done well. Guided by our newly announced beauty commitment to our team, we are leaning into one culture of bold thinking, accountability, agility, unity, and focus. Lastly, we have advanced our work to create a robust operating ecosystem for more connected and scalable enterprise. In the second quarter, we've established our new enterprise business services, selecting Accenture to transform how we deliver select shared services globally as we accelerate the deployment of AI throughout the organization.
Speaker #3: We have culture and one operating simplified our structure in support fewer layers and silos along of one team with with clearer ownership to make it easier to get things done and done well.
Speaker #3: And guided by our newly announced beauty commitment to our team, we are leaning into one culture of bold thinking, accountability, agility, unity, and focus.
Speaker #3: Lastly, we have advanced our work to create a robust operating ecosystem for a more connected and scalable enterprise. In the second quarter, we've established our new enterprise business services, selecting Accenture to transform how we deliver select shared services globally as we accelerate the deployment of AI throughout the organization.
Speaker #3: This ecosystem we are building with exciting partnership adds to the leading technology providers, including Microsoft, Google, and Shopify, to fuel our ambition to be the best consumer-centric prestige beauty company.
Stéphane de La Faverie: This exciting partnership adds to the ecosystem we are building with leading technology providers, including Microsoft, Google, and Shopify, to fuel our ambition to be the best consumer-centric prestige beauty company. With the momentum of Beauty Reimagined and our first half result, we are raising our fiscal 2026 outlook today by narrowing the organic sales growth range towards the high end, increasing operating margin expansion from 165 to 200 basis points at the midpoint, reflecting previously expected headwind, like tides, and now greater consumer-facing investment, and raising EPS growth from 33% to 43% at the midpoint. This outlook reflects the confidence in our turnaround, as well as the significant work that we still have ahead to drive better performance in the US, as well as in the UK, despite its return to growth in Q2.
Stéphane de La Faverie: This exciting partnership adds to the ecosystem we are building with leading technology providers, including Microsoft, Google, and Shopify, to fuel our ambition to be the best consumer-centric prestige beauty company. With the momentum of Beauty Reimagined and our first half result, we are raising our fiscal 2026 outlook today by narrowing the organic sales growth range towards the high end, increasing operating margin expansion from 165 to 200 basis points at the midpoint, reflecting previously expected headwind, like tides, and now greater consumer-facing investment, and raising EPS growth from 33% to 43% at the midpoint. This outlook reflects the confidence in our turnaround, as well as the significant work that we still have ahead to drive better performance in the US, as well as in the UK, despite its return to growth in Q2.
Stéphane de La Faverie: This exciting partnership adds to the ecosystem we are building with leading technology providers, including Microsoft, Google, and Shopify, to fuel our ambition to be the best consumer-centric prestige beauty company. With the momentum of Beauty Reimagined and our first half result, we are raising our fiscal 2026 outlook today by narrowing the organic sales growth range towards the high end, increasing operating margin expansion from 165 to 200 basis points at the midpoint, reflecting previously expected headwind, like tides, and now greater consumer-facing investment, and raising EPS growth from 33% to 43% at the midpoint. This outlook reflects the confidence in our turnaround, as well as the significant work that we still have ahead to drive better performance in the US, as well as in the UK, despite its return to growth in Q2.
Stéphane de La Faverie: This exciting partnership adds to the ecosystem we are building with leading technology providers, including Microsoft, Google, and Shopify, to fuel our ambition to be the best consumer-centric prestige beauty company. With the momentum of Beauty Reimagined and our first half result, we are raising our fiscal 2026 outlook today by narrowing the organic sales growth range towards the high end, increasing operating margin expansion from 165 to 200 basis points at the midpoint, reflecting previously expected headwind, like tides, and now greater consumer-facing investment, and raising EPS growth from 33% to 43% at the midpoint. This outlook reflects the confidence in our turnaround, as well as the significant work that we still have ahead to drive better performance in the US, as well as in the UK, despite its return to growth in Q2.
Speaker #3: With the momentum of Beauty Reimagined and our first half result, we are raising our fiscal '26 outlook today by narrowing the organic sales growth range towards the high end, increasing operating margin expansion from 165 to 200 basis points at the midpoint, reflecting previously expected headwinds like tariffs and now greater consumer-facing investment.
Speaker #3: raising EPS growth from And 33 to 43% at the midpoint. This outlook reflects the confidence in our turnaround as well as the significant work that we still have ahead to drive better performance in the US as well as in the UK, despite its return to growth in the second quarter.
Speaker #3: And while in the Western Europe market, we see opportunities to improve our results. For China, we are encouraged by the strong innovation. But with regard to the desirability of our brands, and cognizant of still subdued consumer sentiment, in our priority emerging market, after a significant acceleration to double-digit organic sales growth in the second quarter, we are confident that our new organizational design is enabling us to better tap into growth opportunities.
Stéphane de La Faverie: While the macroeconomic environment is challenging in the Western Europe market, we see opportunities to improve our results. For China, we are encouraged by the strong desirability of our brands and innovation, but cognizant of still subdued consumer sentiments. In our priority emerging market, after a significant acceleration to double-digit organic sales growth in Q2, we are confident that our new organizational design is enabling us to better tap into growth opportunities. For the second half of fiscal 2026, we have a rich slate of innovation. Already out in skincare, Clinique launched its new dermatologist-developed skincare line, and La Mer introduced an eye cream to pair with its successful rejuvenating night cream. For makeup, Estée Lauder's Double Wear is launching next-generation matte foundation with more wear, more shade, more benefits.
Stéphane de La Faverie: While the macroeconomic environment is challenging in the Western Europe market, we see opportunities to improve our results. For China, we are encouraged by the strong desirability of our brands and innovation, but cognizant of still subdued consumer sentiments. In our priority emerging market, after a significant acceleration to double-digit organic sales growth in Q2, we are confident that our new organizational design is enabling us to better tap into growth opportunities. For the second half of fiscal 2026, we have a rich slate of innovation. Already out in skincare, Clinique launched its new dermatologist-developed skincare line, and La Mer introduced an eye cream to pair with its successful rejuvenating night cream. For makeup, Estée Lauder's Double Wear is launching next-generation matte foundation with more wear, more shade, more benefits.
Stéphane de La Faverie: While the macroeconomic environment is challenging in the Western Europe market, we see opportunities to improve our results. For China, we are encouraged by the strong desirability of our brands and innovation, but cognizant of still subdued consumer sentiments. In our priority emerging market, after a significant acceleration to double-digit organic sales growth in Q2, we are confident that our new organizational design is enabling us to better tap into growth opportunities. For the second half of fiscal 2026, we have a rich slate of innovation. Already out in skincare, Clinique launched its new dermatologist-developed skincare line, and La Mer introduced an eye cream to pair with its successful rejuvenating night cream. For makeup, Estée Lauder's Double Wear is launching next-generation matte foundation with more wear, more shade, more benefits.
Stéphane de La Faverie: While the macroeconomic environment is challenging in the Western Europe market, we see opportunities to improve our results. For China, we are encouraged by the strong desirability of our brands and innovation, but cognizant of still subdued consumer sentiments. In our priority emerging market, after a significant acceleration to double-digit organic sales growth in Q2, we are confident that our new organizational design is enabling us to better tap into growth opportunities. For the second half of fiscal 2026, we have a rich slate of innovation. Already out in skincare, Clinique launched its new dermatologist-developed skincare line, and La Mer introduced an eye cream to pair with its successful rejuvenating night cream. For makeup, Estée Lauder's Double Wear is launching next-generation matte foundation with more wear, more shade, more benefits.
Speaker #3: For the second half of fiscal '26, we have a rich slate of innovation. Already out in skincare, Clinique launched its new dermatologist-developed skincare line, and La Mer introduced an eye cream to pair with its successful Rejuvenating Night Cream.
Speaker #3: For makeup, Estée Lauder's Double Wear is launching
Speaker #1: math generation Foundation more wear , with more shade , benefits . brand The Next in to is and leader already more around strengthen its clinic .
Speaker #1: math generation Foundation more wear , with more shade , benefits . brand The Next in to is and leader already more around strengthen its the Iran is already the leadership in leader strengthen looking to leadership world and foundation and clinic its is fueling the nostalgia trend with the launch shabby for fragrance from newness Kilian Paris , Le Tom Labo and builds on Ford the category's terrific first half as our best performing category , with 10% organic growth sales haircare , Bumble and Bumble introduced a styling at an product exciting time as it enters salon centric in the US .
Stéphane de La Faverie: The brand is already the leader in foundation and looking to strengthen its leadership around the world. Clinique is fueling the nostalgia trend with the Chubby Stick launch. ... For fragrance, newness from Kilian Paris, Le Labo, and Tom Ford builds on the category's terrific first half as our best performing category with 10% organic sales growth. In haircare, Bumble and bumble introduced a styling product at an exciting time as it enters SalonCentric in the US. In closing, for fiscal 2026, we expect return to organic sales growth and expand our operating margin for the first time in four years, setting the stage to restore sustainable sales growth and a solid double-digit adjusted operating margin in the next few years. I am immensely grateful for the opportunity to lead this great company, especially as we celebrate the 80th of our founding.
Stéphane de La Faverie: The brand is already the leader in foundation and looking to strengthen its leadership around the world. Clinique is fueling the nostalgia trend with the Chubby Stick launch. ... For fragrance, newness from Kilian Paris, Le Labo, and Tom Ford builds on the category's terrific first half as our best performing category with 10% organic sales growth. In haircare, Bumble and bumble introduced a styling product at an exciting time as it enters SalonCentric in the US. In closing, for fiscal 2026, we expect return to organic sales growth and expand our operating margin for the first time in four years, setting the stage to restore sustainable sales growth and a solid double-digit adjusted operating margin in the next few years. I am immensely grateful for the opportunity to lead this great company, especially as we celebrate the 80th of our founding.
Stéphane de La Faverie: The brand is already the leader in foundation and looking to strengthen its leadership around the world. Clinique is fueling the nostalgia trend with the Chubby Stick launch. ... For fragrance, newness from Kilian Paris, Le Labo, and Tom Ford builds on the category's terrific first half as our best performing category with 10% organic sales growth. In haircare, Bumble and bumble introduced a styling product at an exciting time as it enters SalonCentric in the US. In closing, for fiscal 2026, we expect return to organic sales growth and expand our operating margin for the first time in four years, setting the stage to restore sustainable sales growth and a solid double-digit adjusted operating margin in the next few years. I am immensely grateful for the opportunity to lead this great company, especially as we celebrate the 80th of our founding.
Stéphane de La Faverie: The brand is already the leader in foundation and looking to strengthen its leadership around the world. Clinique is fueling the nostalgia trend with the Chubby Stick launch. ... For fragrance, newness from Kilian Paris, Le Labo, and Tom Ford builds on the category's terrific first half as our best performing category with 10% organic sales growth. In haircare, Bumble and bumble introduced a styling product at an exciting time as it enters SalonCentric in the US. In closing, for fiscal 2026, we expect return to organic sales growth and expand our operating margin for the first time in four years, setting the stage to restore sustainable sales growth and a solid double-digit adjusted operating margin in the next few years. I am immensely grateful for the opportunity to lead this great company, especially as we celebrate the 80th of our founding.
Speaker #1: for fiscal In closing , 26 , we expect return to sales growth and operating margin for the first time in setting four years , restore stage to expand our sustainable sales growth and a solid the double adjusted digit operating margin next .
Stéphane de La Faverie: We have an extraordinary team, an extraordinary portfolio of brands, and we have momentum onward and upward. I will now turn the call over to Akhil.
Stéphane de La Faverie: We have an extraordinary team, an extraordinary portfolio of brands, and we have momentum onward and upward. I will now turn the call over to Akhil.
Stéphane de La Faverie: We have an extraordinary team, an extraordinary portfolio of brands, and we have momentum onward and upward. I will now turn the call over to Akhil.
Stéphane de La Faverie: We have an extraordinary team, an extraordinary portfolio of brands, and we have momentum onward and upward. I will now turn the call over to Akhil.
Speaker #1: Surely , as we celebrate organic extraordinary founding , an team , extraordinary portfolio of brands , we have momentum onward and and I will now turn the upward .
Speaker #1: Surely , as we celebrate organic extraordinary founding , an team , extraordinary portfolio of brands , we have momentum onward and and I will now turn the in the over to call Akil .
Akhil Shrivastava: Thank you, Stéphane. Hello, everyone, and thank you for joining us today. Enabled by Beauty Reimagined, our focus continues to be on long-term consumer-centric value creation through sales growth, margin improvement, and strong cash generation. We are delivering solid progress across all three priorities, driven by the team's unwavering determination to build on a strong foundation, advance key initiatives, and increase organizational speed and agility. While there is more work ahead, we remain focused on disciplined execution and are well positioned to drive sustainable long-term value. Before sharing our updated full year outlook, I'll start with a recap of our second quarter performance. For more details on our second quarter results, please refer to a press release issued this morning. Starting with organic net sales, we grew 4% year-over-year.
Akhil Shrivastava: Thank you, Stéphane. Hello, everyone, and thank you for joining us today. Enabled by Beauty Reimagined, our focus continues to be on long-term consumer-centric value creation through sales growth, margin improvement, and strong cash generation. We are delivering solid progress across all three priorities, driven by the team's unwavering determination to build on a strong foundation, advance key initiatives, and increase organizational speed and agility. While there is more work ahead, we remain focused on disciplined execution and are well positioned to drive sustainable long-term value. Before sharing our updated full year outlook, I'll start with a recap of our second quarter performance. For more details on our second quarter results, please refer to a press release issued this morning. Starting with organic net sales, we grew 4% year-over-year.
Akhil Shrivastava: Thank you, Stéphane. Hello, everyone, and thank you for joining us today. Enabled by Beauty Reimagined, our focus continues to be on long-term consumer-centric value creation through sales growth, margin improvement, and strong cash generation. We are delivering solid progress across all three priorities, driven by the team's unwavering determination to build on a strong foundation, advance key initiatives, and increase organizational speed and agility. While there is more work ahead, we remain focused on disciplined execution and are well positioned to drive sustainable long-term value. Before sharing our updated full year outlook, I'll start with a recap of our second quarter performance. For more details on our second quarter results, please refer to a press release issued this morning. Starting with organic net sales, we grew 4% year-over-year.
Akhil Shrivastava: Thank you, Stéphane. Hello, everyone, and thank you for joining us today. Enabled by Beauty Reimagined, our focus continues to be on long-term consumer-centric value creation through sales growth, margin improvement, and strong cash generation. We are delivering solid progress across all three priorities, driven by the team's unwavering determination to build on a strong foundation, advance key initiatives, and increase organizational speed and agility. While there is more work ahead, we remain focused on disciplined execution and are well positioned to drive sustainable long-term value. Before sharing our updated full year outlook, I'll start with a recap of our second quarter performance. For more details on our second quarter results, please refer to a press release issued this morning. Starting with organic net sales, we grew 4% year-over-year.
Speaker #2: Thank you . Stefan Hello . for , everyone , and joining us today by Enabled our focus Reimagined , continues to Beauty on long term value centric be creation consumer through sales .
Speaker #2: growth , margin improvement generation . We are cash delivering solid across progress strong three priorities , driven by the team's unwavering determination to build strong foundation , advance key initiatives and increase organizational speed and agility .
Speaker #2: While there is more work ahead , we remain focused on disciplined execution and are well drive positioned to sustainable , long term value .
Speaker #2: sharing our updated on a start with I'll a second quarter recap of performance . our details on our results , second quarter For more our release press issued this Starting with .
Speaker #2: sharing our updated on a start with I'll a second quarter recap of performance . our details on our results , second quarter For more our release press issued this please morning net sales , organic we grew year .
Akhil Shrivastava: This was led by 6% growth in both skincare and fragrance, which was supported by increased consumer-facing investments behind go-to-market activities and innovation. Targeted expanded consumer reach also drove growth as we continued to execute against our Beauty Reimagined action plan to accelerate best-in-class consumer coverage. These category results fueled double-digit growth in both Mainland China and collectively in our priority emerging markets. In North America, sales were flat, with sequential improvement from Q1. Growth online from our continued expansion was offset by a decline in brick-and-mortar. Turning now to margins. Gross margin for the quarter was 76.5%, an expansion of 40 basis points compared to last year. Our expansion was again driven by strong net benefits from our PRGP, including operational efficiencies and, within excess and obsolescence, ongoing reductions through our zero waste initiatives.
Akhil Shrivastava: This was led by 6% growth in both skincare and fragrance, which was supported by increased consumer-facing investments behind go-to-market activities and innovation. Targeted expanded consumer reach also drove growth as we continued to execute against our Beauty Reimagined action plan to accelerate best-in-class consumer coverage. These category results fueled double-digit growth in both Mainland China and collectively in our priority emerging markets. In North America, sales were flat, with sequential improvement from Q1. Growth online from our continued expansion was offset by a decline in brick-and-mortar. Turning now to margins. Gross margin for the quarter was 76.5%, an expansion of 40 basis points compared to last year. Our expansion was again driven by strong net benefits from our PRGP, including operational efficiencies and, within excess and obsolescence, ongoing reductions through our zero waste initiatives.
Akhil Shrivastava: This was led by 6% growth in both skincare and fragrance, which was supported by increased consumer-facing investments behind go-to-market activities and innovation. Targeted expanded consumer reach also drove growth as we continued to execute against our Beauty Reimagined action plan to accelerate best-in-class consumer coverage. These category results fueled double-digit growth in both Mainland China and collectively in our priority emerging markets. In North America, sales were flat, with sequential improvement from Q1. Growth online from our continued expansion was offset by a decline in brick-and-mortar. Turning now to margins. Gross margin for the quarter was 76.5%, an expansion of 40 basis points compared to last year. Our expansion was again driven by strong net benefits from our PRGP, including operational efficiencies and, within excess and obsolescence, ongoing reductions through our zero waste initiatives.
Akhil Shrivastava: This was led by 6% growth in both skincare and fragrance, which was supported by increased consumer-facing investments behind go-to-market activities and innovation. Targeted expanded consumer reach also drove growth as we continued to execute against our Beauty Reimagined action plan to accelerate best-in-class consumer coverage. These category results fueled double-digit growth in both Mainland China and collectively in our priority emerging markets. In North America, sales were flat, with sequential improvement from Q1. Growth online from our continued expansion was offset by a decline in brick-and-mortar. Turning now to margins. Gross margin for the quarter was 76.5%, an expansion of 40 basis points compared to last year. Our expansion was again driven by strong net benefits from our PRGP, including operational efficiencies and, within excess and obsolescence, ongoing reductions through our zero waste initiatives.
Speaker #2: was This led by 6% growth in both skincare and fragrance , which was supported by consumer facing investments increased behind go to market activities and innovation 4% year on expanded targeted consumer reach .
Speaker #2: Also drove growth . As we execute against our continued to Beauty reimagined action plan to accelerate best in class consumer . These coverage category results fueled double digit mainland China and growth in both priority markets in America .
Speaker #2: North Sales were flat , with sequential improvement from the first quarter growth online . From our continued expansion was offset by a decline in and mortar .
Speaker #2: Turning now to margins, gross margin for the quarter was 76.5%, an expansion of 40 basis points compared to last year.
Speaker #2: Our expansion was again driven by strong net benefits from our PRP , including efficiencies operational and within access on Ongoing reductions through a obsolescence .
Akhil Shrivastava: Our improved sales leverage also contributed to expansion in the quarter. These results helped offset headwinds from incremental tariffs, change in a mix of business, and inflation. Turning to operating margin, we expanded 290 basis points, delivering 14.4% compared to 11.5% last year. Our disciplined investment allocation and PRGP net benefits drove a 3% reduction in non-consumer-facing expenses, even with the normalization of employee incentive costs, helping us to maintain cost efficiency and operating leverage. This funded a 7% increase in consumer-facing investments, driving growth and continuing to strengthen brand equity. Our effective tax rate for the quarter was 39.8%, down from 42.6% last year. This was primarily due to lower tax expense related to previously issued stock-based compensation.
Akhil Shrivastava: Our improved sales leverage also contributed to expansion in the quarter. These results helped offset headwinds from incremental tariffs, change in a mix of business, and inflation. Turning to operating margin, we expanded 290 basis points, delivering 14.4% compared to 11.5% last year. Our disciplined investment allocation and PRGP net benefits drove a 3% reduction in non-consumer-facing expenses, even with the normalization of employee incentive costs, helping us to maintain cost efficiency and operating leverage. This funded a 7% increase in consumer-facing investments, driving growth and continuing to strengthen brand equity. Our effective tax rate for the quarter was 39.8%, down from 42.6% last year. This was primarily due to lower tax expense related to previously issued stock-based compensation.
Akhil Shrivastava: Our improved sales leverage also contributed to expansion in the quarter. These results helped offset headwinds from incremental tariffs, change in a mix of business, and inflation. Turning to operating margin, we expanded 290 basis points, delivering 14.4% compared to 11.5% last year. Our disciplined investment allocation and PRGP net benefits drove a 3% reduction in non-consumer-facing expenses, even with the normalization of employee incentive costs, helping us to maintain cost efficiency and operating leverage. This funded a 7% increase in consumer-facing investments, driving growth and continuing to strengthen brand equity. Our effective tax rate for the quarter was 39.8%, down from 42.6% last year. This was primarily due to lower tax expense related to previously issued stock-based compensation.
Akhil Shrivastava: Our improved sales leverage also contributed to expansion in the quarter. These results helped offset headwinds from incremental tariffs, change in a mix of business, and inflation. Turning to operating margin, we expanded 290 basis points, delivering 14.4% compared to 11.5% last year. Our disciplined investment allocation and PRGP net benefits drove a 3% reduction in non-consumer-facing expenses, even with the normalization of employee incentive costs, helping us to maintain cost efficiency and operating leverage. This funded a 7% increase in consumer-facing investments, driving growth and continuing to strengthen brand equity. Our effective tax rate for the quarter was 39.8%, down from 42.6% last year. This was primarily due to lower tax expense related to previously issued stock-based compensation.
Speaker #2: zero waste initiatives . improved sales Our leverage also contributed to expansion quarter . These results helped offset in the headwinds from incremental tariffs , a mix change in of business inflation and .
Speaker #2: Turning to operating margin , we expanded 290 basis points , 14.4% delivering compared to 11.5% last year . Our investment allocation and PRP net benefits 3% a reduction in disciplined facing drove with the Even normalization of employee incentive costs to helping us maintain cost efficiency and operating leverage , this 7% funded a consumer increase in facing investments , driving growth and continuing to strengthen brand .
Speaker #2: Our effective tax rate for the quarter was 39.8% , down from 42.6% last year . equity This was primarily due to lower tax expense related to previously issued stock based compensation .
Akhil Shrivastava: Our rate in the quarter also reflects the estimated unfavorable impact of recently enacted US tax legislation, along with a higher effective tax rate on foreign operations due to new valuation allowances on certain deferred tax assets, primarily in Latin America. Sales growth and cost leverage drove diluted EPS growth of 43% versus last year. EPS increased to $0.89 from $0.62 last year. Looking at our overall PRGP, we continue to execute with focus and discipline, advancing initiatives to better position the company to improve its cost structure, fuel growth, and deliver sustainable long-term value. This quarter, we made significant progress in advancing our restructuring component of our PRGP, entering into a strategic agreement for enterprise business services in connection with the historic transformation of a global operating ecosystem.
Akhil Shrivastava: Our rate in the quarter also reflects the estimated unfavorable impact of recently enacted US tax legislation, along with a higher effective tax rate on foreign operations due to new valuation allowances on certain deferred tax assets, primarily in Latin America. Sales growth and cost leverage drove diluted EPS growth of 43% versus last year. EPS increased to $0.89 from $0.62 last year. Looking at our overall PRGP, we continue to execute with focus and discipline, advancing initiatives to better position the company to improve its cost structure, fuel growth, and deliver sustainable long-term value. This quarter, we made significant progress in advancing our restructuring component of our PRGP, entering into a strategic agreement for enterprise business services in connection with the historic transformation of a global operating ecosystem.
Akhil Shrivastava: Our rate in the quarter also reflects the estimated unfavorable impact of recently enacted US tax legislation, along with a higher effective tax rate on foreign operations due to new valuation allowances on certain deferred tax assets, primarily in Latin America. Sales growth and cost leverage drove diluted EPS growth of 43% versus last year. EPS increased to $0.89 from $0.62 last year. Looking at our overall PRGP, we continue to execute with focus and discipline, advancing initiatives to better position the company to improve its cost structure, fuel growth, and deliver sustainable long-term value. This quarter, we made significant progress in advancing our restructuring component of our PRGP, entering into a strategic agreement for enterprise business services in connection with the historic transformation of a global operating ecosystem.
Akhil Shrivastava: Our rate in the quarter also reflects the estimated unfavorable impact of recently enacted US tax legislation, along with a higher effective tax rate on foreign operations due to new valuation allowances on certain deferred tax assets, primarily in Latin America. Sales growth and cost leverage drove diluted EPS growth of 43% versus last year. EPS increased to $0.89 from $0.62 last year. Looking at our overall PRGP, we continue to execute with focus and discipline, advancing initiatives to better position the company to improve its cost structure, fuel growth, and deliver sustainable long-term value. This quarter, we made significant progress in advancing our restructuring component of our PRGP, entering into a strategic agreement for enterprise business services in connection with the historic transformation of a global operating ecosystem.
Speaker #2: Our rate quarter also reflects the estimated impact of unfavorable recently enacted tax U.S. legislation with a higher effective tax rate on foreign operations new valuation allowances on certain deferred tax assets , primarily in due to America Latin .
Speaker #2: Sales growth and cost leverage drove diluted EPs growth of 43% versus last year . EPs increased to $0.89 from $0.62 last year . at Looking our overall PRP , we continue to execute with advancing to initiatives discipline , better position the company to focus and improve its cost structure , fuel growth and deliver sustainable long term value .
Speaker #2: This quarter , we made significant progress in advancing our restructuring component of our PRP . Entering into a strategic agreement for enterprise business services in connection historic with the transformation of a global operating ecosystem .
Akhil Shrivastava: As Stéphane mentioned, this global initiative includes consolidating certain service providers, expanding outsourced services, and standardizing end-to-end processes using advanced technology. This enables us to unlock greater productivity and efficiency across the organization. Expected charges for these initiatives include professional service fees, employee costs, and contract terminations. We expect these initiatives to deliver net benefits that ramp up over time as the transition progresses and service levels normalize. As we execute the migration, we do expect some near-term cost pressure as we operate in parallel, with benefits building thereafter. As operational scale and efficiencies are realized, they are expected to drive OpEx improvement and keep us on track to achieve our overall PRGP savings and margin progression. In terms of restructuring costs, through December 31, we recorded $904 million of total cumulative charges, primarily in employee-related costs. Turning now to cash flows, our key priority.
Akhil Shrivastava: As Stéphane mentioned, this global initiative includes consolidating certain service providers, expanding outsourced services, and standardizing end-to-end processes using advanced technology. This enables us to unlock greater productivity and efficiency across the organization. Expected charges for these initiatives include professional service fees, employee costs, and contract terminations. We expect these initiatives to deliver net benefits that ramp up over time as the transition progresses and service levels normalize. As we execute the migration, we do expect some near-term cost pressure as we operate in parallel, with benefits building thereafter. As operational scale and efficiencies are realized, they are expected to drive OpEx improvement and keep us on track to achieve our overall PRGP savings and margin progression. In terms of restructuring costs, through December 31, we recorded $904 million of total cumulative charges, primarily in employee-related costs. Turning now to cash flows, our key priority.
Akhil Shrivastava: As Stéphane mentioned, this global initiative includes consolidating certain service providers, expanding outsourced services, and standardizing end-to-end processes using advanced technology. This enables us to unlock greater productivity and efficiency across the organization. Expected charges for these initiatives include professional service fees, employee costs, and contract terminations. We expect these initiatives to deliver net benefits that ramp up over time as the transition progresses and service levels normalize. As we execute the migration, we do expect some near-term cost pressure as we operate in parallel, with benefits building thereafter. As operational scale and efficiencies are realized, they are expected to drive OpEx improvement and keep us on track to achieve our overall PRGP savings and margin progression. In terms of restructuring costs, through December 31, we recorded $904 million of total cumulative charges, primarily in employee-related costs. Turning now to cash flows, our key priority.
Akhil Shrivastava: As Stéphane mentioned, this global initiative includes consolidating certain service providers, expanding outsourced services, and standardizing end-to-end processes using advanced technology. This enables us to unlock greater productivity and efficiency across the organization. Expected charges for these initiatives include professional service fees, employee costs, and contract terminations. We expect these initiatives to deliver net benefits that ramp up over time as the transition progresses and service levels normalize. As we execute the migration, we do expect some near-term cost pressure as we operate in parallel, with benefits building thereafter. As operational scale and efficiencies are realized, they are expected to drive OpEx improvement and keep us on track to achieve our overall PRGP savings and margin progression. In terms of restructuring costs, through December 31, we recorded $904 million of total cumulative charges, primarily in employee-related costs. Turning now to cash flows, our key priority.
Speaker #2: Stefan As mentioned , this global initiative includes consolidating certain service , expanding outsourced services and standardizing end to end using advanced processes This enables us to unlock greater productivity and efficiency across the organization .
Speaker #2: Expected charges for these initiatives include professional service fees , employee costs , and contract terminations . We expect these deliver to net benefits initiatives that ramp up over as the time progresses transition and service levels normalize we execute the migration , .
Speaker #2: We expect some cost pressure near-term as we operate in parallel; we do expect benefits building thereafter. As operational scale and efficiencies are realized, they are expected to drive opex improvement and keep us on track to achieve our overall PRP savings and margin progression.
Speaker #2: In terms of restructuring costs through December 31st , recorded we $904 million of total cumulative charges , primarily in employee related costs . Turning now to flows , cash a key priority for the six months we generated cash $785 million in net flows from operating This is a activities .
Akhil Shrivastava: For the six months, we generated $785 million in net cash flows from operating activities. This is a significant improvement compared to the $387 million generated last year, primarily reflecting higher earnings, excluding non-cash items. Also contributing to the improvement was a favorable change in operating assets and liabilities, despite the meaningful increase in restructuring payments. We invested $204 million in CapEx, continuing to prioritize consumer-facing investments to fuel growth while optimizing all other CapEx investments. For the six months, CapEx was down 25% versus last year, reflecting the phasing of projects. These results underscore a strategic focus on improving free cash flow. Turning now to our expectations for the remainder of the year. We are raising our fiscal 2026 outlook.
Akhil Shrivastava: For the six months, we generated $785 million in net cash flows from operating activities. This is a significant improvement compared to the $387 million generated last year, primarily reflecting higher earnings, excluding non-cash items. Also contributing to the improvement was a favorable change in operating assets and liabilities, despite the meaningful increase in restructuring payments. We invested $204 million in CapEx, continuing to prioritize consumer-facing investments to fuel growth while optimizing all other CapEx investments. For the six months, CapEx was down 25% versus last year, reflecting the phasing of projects. These results underscore a strategic focus on improving free cash flow. Turning now to our expectations for the remainder of the year. We are raising our fiscal 2026 outlook.
Akhil Shrivastava: For the six months, we generated $785 million in net cash flows from operating activities. This is a significant improvement compared to the $387 million generated last year, primarily reflecting higher earnings, excluding non-cash items. Also contributing to the improvement was a favorable change in operating assets and liabilities, despite the meaningful increase in restructuring payments. We invested $204 million in CapEx, continuing to prioritize consumer-facing investments to fuel growth while optimizing all other CapEx investments. For the six months, CapEx was down 25% versus last year, reflecting the phasing of projects. These results underscore a strategic focus on improving free cash flow. Turning now to our expectations for the remainder of the year. We are raising our fiscal 2026 outlook.
Akhil Shrivastava: For the six months, we generated $785 million in net cash flows from operating activities. This is a significant improvement compared to the $387 million generated last year, primarily reflecting higher earnings, excluding non-cash items. Also contributing to the improvement was a favorable change in operating assets and liabilities, despite the meaningful increase in restructuring payments. We invested $204 million in CapEx, continuing to prioritize consumer-facing investments to fuel growth while optimizing all other CapEx investments. For the six months, CapEx was down 25% versus last year, reflecting the phasing of projects. These results underscore a strategic focus on improving free cash flow. Turning now to our expectations for the remainder of the year. We are raising our fiscal 2026 outlook.
Speaker #2: significant compared to the $387 million generated last improvement year , primarily reflecting higher earnings non-cash excluding items . Also contributing to the improvement favorable was a in operating assets and liabilities .
Speaker #2: Despite the meaningful increase in restructuring payments , we invested $204 million in CapEx , continuing to prioritize consumer facing investments to fuel growth while optimizing all other CapEx investments .
Speaker #2: For the six months, CapEx was down 25% versus last year, reflecting the phasing of last projects. These results underscore a strategic focus on improving free cash flow.
Akhil Shrivastava: We remain cautious of potential near-term headwinds, including those from macroeconomic, geopolitical, and retailer-specific uncertainties, though we are encouraged by our momentum and year-to-date performance. Starting with organic net sales, we are narrowing our range and now expect full-year sales to increase in the range of 1 to 3% compared to last year. At the midpoint of our outlook range, we assume growth across all regions, except for the Americas, where sales are expected to be flat. In the second half, we expect organic net sales to increase low single digits, with higher growth anticipated in the fourth quarter relative to the third. This reflects an incremental transitory headwind in the second half of the year in Asia travel retail from the change of duty-free retailers servicing the Beijing and Shanghai airports, including the related online businesses. Turning now to our outlook on margin and EPS.
Akhil Shrivastava: We remain cautious of potential near-term headwinds, including those from macroeconomic, geopolitical, and retailer-specific uncertainties, though we are encouraged by our momentum and year-to-date performance. Starting with organic net sales, we are narrowing our range and now expect full-year sales to increase in the range of 1 to 3% compared to last year. At the midpoint of our outlook range, we assume growth across all regions, except for the Americas, where sales are expected to be flat. In the second half, we expect organic net sales to increase low single digits, with higher growth anticipated in the fourth quarter relative to the third. This reflects an incremental transitory headwind in the second half of the year in Asia travel retail from the change of duty-free retailers servicing the Beijing and Shanghai airports, including the related online businesses. Turning now to our outlook on margin and EPS.
Akhil Shrivastava: We remain cautious of potential near-term headwinds, including those from macroeconomic, geopolitical, and retailer-specific uncertainties, though we are encouraged by our momentum and year-to-date performance. Starting with organic net sales, we are narrowing our range and now expect full-year sales to increase in the range of 1 to 3% compared to last year. At the midpoint of our outlook range, we assume growth across all regions, except for the Americas, where sales are expected to be flat. In the second half, we expect organic net sales to increase low single digits, with higher growth anticipated in the fourth quarter relative to the third. This reflects an incremental transitory headwind in the second half of the year in Asia travel retail from the change of duty-free retailers servicing the Beijing and Shanghai airports, including the related online businesses. Turning now to our outlook on margin and EPS.
Akhil Shrivastava: We remain cautious of potential near-term headwinds, including those from macroeconomic, geopolitical, and retailer-specific uncertainties, though we are encouraged by our momentum and year-to-date performance. Starting with organic net sales, we are narrowing our range and now expect full-year sales to increase in the range of 1 to 3% compared to last year. At the midpoint of our outlook range, we assume growth across all regions, except for the Americas, where sales are expected to be flat. In the second half, we expect organic net sales to increase low single digits, with higher growth anticipated in the fourth quarter relative to the third. This reflects an incremental transitory headwind in the second half of the year in Asia travel retail from the change of duty-free retailers servicing the Beijing and Shanghai airports, including the related online businesses. Turning now to our outlook on margin and EPS.
Speaker #2: Turning now to our year our raising fiscal 2026 outlook . We remain cautious of potential near-term headwinds , those from macroeconomic and including retailer , geopolitical specific uncertainties .
Speaker #2: Though we are by our momentum encouraged and year to date performance with , starting organic sales , net we are narrowing our now expect full year sales to increase in the range of 1 to 3% compared to last year .
Speaker #2: At the midpoint of our outlook range, we expect growth across all regions except for the Americas, where sales are expected to be flat in the second half.
Speaker #2: We expect organic net sales to assume single digits with higher growth low anticipated in the fourth quarter relative to the third . This reflects an incremental transitory headwind in the second half of the year .
Speaker #2: In Asia . retail from the change of duty free retailers servicing the Beijing and Shanghai airports , including the related online businesses . Turning now our on margin and to EPs outlook now assume an .
Akhil Shrivastava: We now assume an operating margin between 9.8% and 10.2%, up from our previous assumption of 9.4% to 9.9%. This improvement reflects both our strong first-half performance and greater gross margin expansion than previously expected. We anticipate operating margin expansion in the second half. This reflects Q3 contraction of approximately 50 basis points compared to last year, as we invest more in consumer-facing programs to support our largest innovation schedule for the year. This contraction also reflects tariff headwinds. Diluted EPS is now expected to range between $2.05 and $2.25, up from a previous range of $1.90 and $2.10.
Akhil Shrivastava: We now assume an operating margin between 9.8% and 10.2%, up from our previous assumption of 9.4% to 9.9%. This improvement reflects both our strong first-half performance and greater gross margin expansion than previously expected. We anticipate operating margin expansion in the second half. This reflects Q3 contraction of approximately 50 basis points compared to last year, as we invest more in consumer-facing programs to support our largest innovation schedule for the year. This contraction also reflects tariff headwinds. Diluted EPS is now expected to range between $2.05 and $2.25, up from a previous range of $1.90 and $2.10.
Akhil Shrivastava: We now assume an operating margin between 9.8% and 10.2%, up from our previous assumption of 9.4% to 9.9%. This improvement reflects both our strong first-half performance and greater gross margin expansion than previously expected. We anticipate operating margin expansion in the second half. This reflects Q3 contraction of approximately 50 basis points compared to last year, as we invest more in consumer-facing programs to support our largest innovation schedule for the year. This contraction also reflects tariff headwinds. Diluted EPS is now expected to range between $2.05 and $2.25, up from a previous range of $1.90 and $2.10.
Akhil Shrivastava: We now assume an operating margin between 9.8% and 10.2%, up from our previous assumption of 9.4% to 9.9%. This improvement reflects both our strong first-half performance and greater gross margin expansion than previously expected. We anticipate operating margin expansion in the second half. This reflects Q3 contraction of approximately 50 basis points compared to last year, as we invest more in consumer-facing programs to support our largest innovation schedule for the year. This contraction also reflects tariff headwinds. Diluted EPS is now expected to range between $2.05 and $2.25, up from a previous range of $1.90 and $2.10.
Speaker #2: between 9.8 and 10.2% , a up from assumption of We 9.4 to 9.9% . This improvement reflects strong both performance and our first half greater gross previously expected .
Speaker #2: We expansion than anticipate operating margin expansion in second half . This reflects third quarter contraction of 50 basis points compared to last year .
Speaker #2: As we invest more in consumer facing programs to support our largest innovation for the schedule year . This contraction also reflects tariff headwinds .
Speaker #2: EPs is now Diluted expected to range between $2.05 and $2.25 , up from a previous range of $1.90 and $2.10 . This assumes a weighted average share count of approximately 365 million shares , and year on year growth of 36% to 49% .
Akhil Shrivastava: This assumes a weighted average share count of approximately 365 million shares and reflects year-on-year growth of 36% to 49%. Please refer to our press release issued this morning for other assumptions included in our fiscal 2026 full-year outlook, including those regarding evolving trade policies and enacted tariffs. In closing, as we mark our one-year anniversary of our Beauty Reimagined strategic vision, we are energized by our performance and progress towards restoring sustainable growth, a solid double-digit operating margin, and strong cash generation. We remain focused on disciplined execution and long-term value creation. To our teams around the world, thank you for your dedication, passion, and unwavering commitment to be the best consumer-centric beauty company, together as one ELC. That concludes the prepared remarks. I'll now turn it over to the operator to begin the Q&A session.
Akhil Shrivastava: This assumes a weighted average share count of approximately 365 million shares and reflects year-on-year growth of 36% to 49%. Please refer to our press release issued this morning for other assumptions included in our fiscal 2026 full-year outlook, including those regarding evolving trade policies and enacted tariffs. In closing, as we mark our one-year anniversary of our Beauty Reimagined strategic vision, we are energized by our performance and progress towards restoring sustainable growth, a solid double-digit operating margin, and strong cash generation. We remain focused on disciplined execution and long-term value creation. To our teams around the world, thank you for your dedication, passion, and unwavering commitment to be the best consumer-centric beauty company, together as one ELC. That concludes the prepared remarks. I'll now turn it over to the operator to begin the Q&A session.
Akhil Shrivastava: This assumes a weighted average share count of approximately 365 million shares and reflects year-on-year growth of 36% to 49%. Please refer to our press release issued this morning for other assumptions included in our fiscal 2026 full-year outlook, including those regarding evolving trade policies and enacted tariffs. In closing, as we mark our one-year anniversary of our Beauty Reimagined strategic vision, we are energized by our performance and progress towards restoring sustainable growth, a solid double-digit operating margin, and strong cash generation. We remain focused on disciplined execution and long-term value creation. To our teams around the world, thank you for your dedication, passion, and unwavering commitment to be the best consumer-centric beauty company, together as one ELC. That concludes the prepared remarks. I'll now turn it over to the operator to begin the Q&A session.
Akhil Shrivastava: This assumes a weighted average share count of approximately 365 million shares and reflects year-on-year growth of 36% to 49%. Please refer to our press release issued this morning for other assumptions included in our fiscal 2026 full-year outlook, including those regarding evolving trade policies and enacted tariffs. In closing, as we mark our one-year anniversary of our Beauty Reimagined strategic vision, we are energized by our performance and progress towards restoring sustainable growth, a solid double-digit operating margin, and strong cash generation. We remain focused on disciplined execution and long-term value creation. To our teams around the world, thank you for your dedication, passion, and unwavering commitment to be the best consumer-centric beauty company, together as one ELC. That concludes the prepared remarks. I'll now turn it over to the operator to begin the Q&A session.
Speaker #2: Please refer to our press release issued this morning for other assumptions included in our fiscal 2026 full year including those outlook , regarding evolving trade policies and enacted tariffs .
Speaker #2: closing , In as we mark the anniversary of a beauty one year reimagined strategic vision , we are energized by our performance and towards progress restoring sustainable growth .
Speaker #2: A solid double digit operating margin and strong cash generation . We remain focused on execution and long term value creation . To our teams world .
Speaker #2: the Thank dedication . around you for your and unwavering Passion commitment to be the best consumer centric beauty company . as Together one ELC , that concludes our prepared remarks , I'll now turn it over to the operator to begin the .
Rainey Mancini: The floor is now open for questions. If you have a question, you simply press the star key followed by the digit one on your touchtone telephone. To ensure everyone can ask their questions, we will limit each person to one question. Time permitting, we will return to you for additional questions. Just queue up again by pressing the star key and the digit one. The first question today comes from Bonnie Herzog with Goldman Sachs. Please go ahead.
Rainey Mancini: The floor is now open for questions. If you have a question, you simply press the star key followed by the digit one on your touchtone telephone. To ensure everyone can ask their questions, we will limit each person to one question. Time permitting, we will return to you for additional questions. Just queue up again by pressing the star key and the digit one. The first question today comes from Bonnie Herzog with Goldman Sachs. Please go ahead.
Rainey Mancini: The floor is now open for questions. If you have a question, you simply press the star key followed by the digit one on your touchtone telephone. To ensure everyone can ask their questions, we will limit each person to one question. Time permitting, we will return to you for additional questions. Just queue up again by pressing the star key and the digit one. The first question today comes from Bonnie Herzog with Goldman Sachs. Please go ahead.
Rainey Mancini: The floor is now open for questions. If you have a question, you simply press the star key followed by the digit one on your touchtone telephone. To ensure everyone can ask their questions, we will limit each person to one question. Time permitting, we will return to you for additional questions. Just queue up again by pressing the star key and the digit one. The first question today comes from Bonnie Herzog with Goldman Sachs. Please go ahead.
Speaker #2: session
Speaker #3: now open for questions The
Speaker #3: If you have a question , you press the simply star key , Q&A followed by the digit one on your touch Telephone everyone .
Speaker #3: ensure To can ask tone . questions , will limit we each person to one question . Time permitting , we will return to you for questions .
Speaker #3: Just queue up again by pressing the star key and the additional one digit. The today first question from Bonnie Herzog with Goldman Sachs.
[Analyst] (Goldman Sachs): Thank you, and good morning, everyone.
[Analyst] (Goldman Sachs): Thank you, and good morning, everyone.
[Analyst] (Goldman Sachs): Thank you, and good morning, everyone.
Bonnie Herzog: Thank you, and good morning, everyone.
Akhil Shrivastava: Morning, Bonnie.
Akhil Shrivastava: Morning, Bonnie.
Akhil Shrivastava: Morning, Bonnie.
Stéphane de La Faverie: Morning, Bonnie.
[Analyst] (Goldman Sachs): Good morning. I guess I have a question on Americas, where, you know, you just mentioned that you expect growth to be flat in the year. I guess, you know, it does appear a little light in context, I guess, of the much easier comps from last year, and then the progress you've been making with, you know, launches on Amazon, et cetera. So, you know, just curious how you're thinking about the underlying performance in the Americas and, you know, what are some of the key moving parts to keep in mind? And then if you could just also provide any color on the cadence of growth, you know, will it be more balanced or, you know, skewed towards FQ4? You know, just thinking about in the context of the full company guidance. Thank you.
[Analyst] (Goldman Sachs): Good morning. I guess I have a question on Americas, where, you know, you just mentioned that you expect growth to be flat in the year. I guess, you know, it does appear a little light in context, I guess, of the much easier comps from last year, and then the progress you've been making with, you know, launches on Amazon, et cetera. So, you know, just curious how you're thinking about the underlying performance in the Americas and, you know, what are some of the key moving parts to keep in mind? And then if you could just also provide any color on the cadence of growth, you know, will it be more balanced or, you know, skewed towards FQ4? You know, just thinking about in the context of the full company guidance. Thank you.
[Analyst] (Goldman Sachs): Good morning. I guess I have a question on Americas, where, you know, you just mentioned that you expect growth to be flat in the year. I guess, you know, it does appear a little light in context, I guess, of the much easier comps from last year, and then the progress you've been making with, you know, launches on Amazon, et cetera. So, you know, just curious how you're thinking about the underlying performance in the Americas and, you know, what are some of the key moving parts to keep in mind? And then if you could just also provide any color on the cadence of growth, you know, will it be more balanced or, you know, skewed towards FQ4? You know, just thinking about in the context of the full company guidance. Thank you.
Bonnie Herzog: Good morning. I guess I have a question on Americas, where, you know, you just mentioned that you expect growth to be flat in the year. I guess, you know, it does appear a little light in context, I guess, of the much easier comps from last year, and then the progress you've been making with, you know, launches on Amazon, et cetera. So, you know, just curious how you're thinking about the underlying performance in the Americas and, you know, what are some of the key moving parts to keep in mind? And then if you could just also provide any color on the cadence of growth, you know, will it be more balanced or, you know, skewed towards FQ4? You know, just thinking about in the context of the full company guidance. Thank you.
Speaker #3: Please go .
Speaker #3: ahead Thank you .
Speaker #4: And good morning , everyone .
Speaker #5: Good morning . . I guess
Speaker #4: morning . I a question Good on guess I have where you just Americas mentioned that you expect growth to be the year . flat in guess .
Speaker #4: I It does appear a little light in context , I easier much guess of the last year . comps And then the progress you've been making with , launches on Amazon , etc.
Speaker #4: . So just curious how thinking about the you're underlying performance in the Americas and you know , what are some of the key moving parts to keep in mind ?
Speaker #4: And if then also you could just provide any color on the cadence of growth , will balanced it be more or skewed towards fc4 ?
Stéphane de La Faverie: ... No, thank you, Bonnie. I'll, I'll take that, and Akhil can add some. So look, just let me just go back a little bit in North America first, and obviously I'll talk about the Americas in total. We come out of 10 years of market share loss in the Americas, and I'm really proud of actually the momentum that the team have put into this market. Because when you look at the calendar 2025, we've been able to gain share in volume, and that was very important, and I've said it multiple time. We needed to reengage our brand to recruit consumers, and we've been able to do it across many of our categories and many of our brands. So we are now in a volume market share gain.
Stéphane de La Faverie: ... No, thank you, Bonnie. I'll, I'll take that, and Akhil can add some. So look, just let me just go back a little bit in North America first, and obviously I'll talk about the Americas in total. We come out of 10 years of market share loss in the Americas, and I'm really proud of actually the momentum that the team have put into this market. Because when you look at the calendar 2025, we've been able to gain share in volume, and that was very important, and I've said it multiple time. We needed to reengage our brand to recruit consumers, and we've been able to do it across many of our categories and many of our brands. So we are now in a volume market share gain.
Stéphane de La Faverie: ... No, thank you, Bonnie. I'll, I'll take that, and Akhil can add some. So look, just let me just go back a little bit in North America first, and obviously I'll talk about the Americas in total. We come out of 10 years of market share loss in the Americas, and I'm really proud of actually the momentum that the team have put into this market. Because when you look at the calendar 2025, we've been able to gain share in volume, and that was very important, and I've said it multiple time. We needed to reengage our brand to recruit consumers, and we've been able to do it across many of our categories and many of our brands. So we are now in a volume market share gain.
Stéphane de La Faverie: ... No, thank you, Bonnie. I'll, I'll take that, and Akhil can add some. So look, just let me just go back a little bit in North America first, and obviously I'll talk about the Americas in total. We come out of 10 years of market share loss in the Americas, and I'm really proud of actually the momentum that the team have put into this market. Because when you look at the calendar 2025, we've been able to gain share in volume, and that was very important, and I've said it multiple time. We needed to reengage our brand to recruit consumers, and we've been able to do it across many of our categories and many of our brands. So we are now in a volume market share gain.
Speaker #4: thinking in the context of of the full company guidance . you . .
Speaker #5: you . Bonnie I'll . thank
Speaker #1: I'll No take that . And can have some . So look , just let me back a little bit . the In just go America North first .
Speaker #1: And
Speaker #1: talk about the Americas total in , we come out of ten years of market share loss in the Americas . And I'm Just proud really of actually the momentum that the team have put into this market .
Speaker #1: when you look at Because the calendar 25 , we've been able to gain share in volume , and that was very And I've said it important .
Speaker #1: multiple times . needed to We reengage our brand to recruit consumers . been And we've able to do it across many of our categories and many of our we now in are a volume market share gain .
Stéphane de La Faverie: And on top of it, we are also in a share gain in value in skincare, led by The Ordinary and many of our brands that are, you know, pulling the total. So we are seeing some momentum, but we are coming out of, obviously, having a lot of lack in our market share loss over the years. Now, we still have the number one brand and the number two brand in skincare, the number one and the number two brands in makeup. We've, you know, Clinique and The Ordinary in skincare and Clinique and M·A·C in makeup. We're seeing a lot of strong performance with Estée Lauder and M·A·C at Ulta. We're very excited, and I've communicated it in October, November, that we were entering MAC US at Sephora.
Stéphane de La Faverie: And on top of it, we are also in a share gain in value in skincare, led by The Ordinary and many of our brands that are, you know, pulling the total. So we are seeing some momentum, but we are coming out of, obviously, having a lot of lack in our market share loss over the years. Now, we still have the number one brand and the number two brand in skincare, the number one and the number two brands in makeup. We've, you know, Clinique and The Ordinary in skincare and Clinique and M·A·C in makeup. We're seeing a lot of strong performance with Estée Lauder and M·A·C at Ulta. We're very excited, and I've communicated it in October, November, that we were entering MAC US at Sephora.
Stéphane de La Faverie: And on top of it, we are also in a share gain in value in skincare, led by The Ordinary and many of our brands that are, you know, pulling the total. So we are seeing some momentum, but we are coming out of, obviously, having a lot of lack in our market share loss over the years. Now, we still have the number one brand and the number two brand in skincare, the number one and the number two brands in makeup. We've, you know, Clinique and The Ordinary in skincare and Clinique and M·A·C in makeup. We're seeing a lot of strong performance with Estée Lauder and M·A·C at Ulta. We're very excited, and I've communicated it in October, November, that we were entering MAC US at Sephora.
Stéphane de La Faverie: And on top of it, we are also in a share gain in value in skincare, led by The Ordinary and many of our brands that are, you know, pulling the total. So we are seeing some momentum, but we are coming out of, obviously, having a lot of lack in our market share loss over the years. Now, we still have the number one brand and the number two brand in skincare, the number one and the number two brands in makeup. We've, you know, Clinique and The Ordinary in skincare and Clinique and M·A·C in makeup. We're seeing a lot of strong performance with Estée Lauder and M·A·C at Ulta. We're very excited, and I've communicated it in October, November, that we were entering MAC US at Sephora.
Speaker #1: And on top of it , we are also in a in gain skincare , led value in by the brands . that ordinary And many are total .
Speaker #1: So we are seeing some of our momentum , but we are coming out of obviously having a lot of market share loss over years .
Speaker #1: the So we still have the number one brand and the number two brand in skincare . The number one and number two brands in makeup .
Speaker #1: We've Clinique and the Ordinary and skincare and Clinique and Mac in makeup , we're seeing a lot of strong performance with Estee Lauder and Mac at Ulta .
Speaker #1: We're excited and have communicated it in very October , November that we were entering Mac , us at Sephora , and this is actually a big milestone for after many , us many not years of playing like in all specialty multi-universe .
Stéphane de La Faverie: This is actually a big milestone for us after many, many years of not playing in, like, all specialty multi-universe. So yes, we are seeing great momentum, and we are moving, Bonnie, in the right direction when it comes to North America. That being said, there's still a rebalancing of all the channels that we are in the process of doing, as highlighted by Beauty Reimagined. We've moved fast with Amazon. We are repositioning the department stores, we know, and we are exiting distribution as the distribution erodes, and we are moving fast into the specialty multi. So I believe there is great momentum, and I see a lot of more momentum going forward for our brand overall. Now, the Americas is also a combination of North America and also Latin America.
Stéphane de La Faverie: This is actually a big milestone for us after many, many years of not playing in, like, all specialty multi-universe. So yes, we are seeing great momentum, and we are moving, Bonnie, in the right direction when it comes to North America. That being said, there's still a rebalancing of all the channels that we are in the process of doing, as highlighted by Beauty Reimagined. We've moved fast with Amazon. We are repositioning the department stores, we know, and we are exiting distribution as the distribution erodes, and we are moving fast into the specialty multi. So I believe there is great momentum, and I see a lot of more momentum going forward for our brand overall. Now, the Americas is also a combination of North America and also Latin America.
Stéphane de La Faverie: This is actually a big milestone for us after many, many years of not playing in, like, all specialty multi-universe. So yes, we are seeing great momentum, and we are moving, Bonnie, in the right direction when it comes to North America. That being said, there's still a rebalancing of all the channels that we are in the process of doing, as highlighted by Beauty Reimagined. We've moved fast with Amazon. We are repositioning the department stores, we know, and we are exiting distribution as the distribution erodes, and we are moving fast into the specialty multi. So I believe there is great momentum, and I see a lot of more momentum going forward for our brand overall. Now, the Americas is also a combination of North America and also Latin America.
Stéphane de La Faverie: This is actually a big milestone for us after many, many years of not playing in, like, all specialty multi-universe. So yes, we are seeing great momentum, and we are moving, Bonnie, in the right direction when it comes to North America. That being said, there's still a rebalancing of all the channels that we are in the process of doing, as highlighted by Beauty Reimagined. We've moved fast with Amazon. We are repositioning the department stores, we know, and we are exiting distribution as the distribution erodes, and we are moving fast into the specialty multi. So I believe there is great momentum, and I see a lot of more momentum going forward for our brand overall. Now, the Americas is also a combination of North America and also Latin America.
Speaker #1: So yes , we seeing are great momentum and we moving in the are direction right when it comes to North America . That being said , there's still a of rebalancing all the we are in channels that the of doing process , as highlighted beauty reimagine .
Speaker #1: We've moved by fast with Amazon . We are have we , we positioning the department stores . We know and we are exiting distribution the distribution as erodes and we are moving fast into the specialty multi .
Speaker #1: So I believe there is great and I momentum see a lot of momentum going more forward for our brand overall . Now the Americas is also a combination of North America and Latin America .
Stéphane de La Faverie: While Latin America has been very strong at the beginning of the calendar 2025, we've seen a slowdown of consumer consumption in the market. And I think one of the main challenges that we see is the enacted tariffs are starting to hurt consumer confidence in Latin America. But overall, I want to say, I feel very strong. We have momentum in the market, volume share is back, and we are moving our brands. So I do believe we will see additional momentum going forward into the market. And to the second part of your question about the cadence, and we've indicated it in the prepared remark and in the press release, we see a stronger Q4 than we see in Q3 overall for the company, because of some of the adjustments that we are seeing, especially in the East with travel retail.
Stéphane de La Faverie: While Latin America has been very strong at the beginning of the calendar 2025, we've seen a slowdown of consumer consumption in the market. And I think one of the main challenges that we see is the enacted tariffs are starting to hurt consumer confidence in Latin America. But overall, I want to say, I feel very strong. We have momentum in the market, volume share is back, and we are moving our brands. So I do believe we will see additional momentum going forward into the market. And to the second part of your question about the cadence, and we've indicated it in the prepared remark and in the press release, we see a stronger Q4 than we see in Q3 overall for the company, because of some of the adjustments that we are seeing, especially in the East with travel retail.
Stéphane de La Faverie: While Latin America has been very strong at the beginning of the calendar 2025, we've seen a slowdown of consumer consumption in the market. And I think one of the main challenges that we see is the enacted tariffs are starting to hurt consumer confidence in Latin America. But overall, I want to say, I feel very strong. We have momentum in the market, volume share is back, and we are moving our brands. So I do believe we will see additional momentum going forward into the market. And to the second part of your question about the cadence, and we've indicated it in the prepared remark and in the press release, we see a stronger Q4 than we see in Q3 overall for the company, because of some of the adjustments that we are seeing, especially in the East with travel retail.
Stéphane de La Faverie: While Latin America has been very strong at the beginning of the calendar 2025, we've seen a slowdown of consumer consumption in the market. And I think one of the main challenges that we see is the enacted tariffs are starting to hurt consumer confidence in Latin America. But overall, I want to say, I feel very strong. We have momentum in the market, volume share is back, and we are moving our brands. So I do believe we will see additional momentum going forward into the market. And to the second part of your question about the cadence, and we've indicated it in the prepared remark and in the press release, we see a stronger Q4 than we see in Q3 overall for the company, because of some of the adjustments that we are seeing, especially in the East with travel retail.
Speaker #1: While also Latin America has been very strong at the calendar , beginning of the 25 we've slowdown of consumer seen a consumption in the market .
Speaker #1: think one of the And I challenges that we main see the enacted tariffs are starting to hurt consumer confidence in Latin America . But overall , I want to say feel I very strong .
Speaker #1: We have in the momentum volume , share is back and we are moving our market believe So I will we see do additional momentum into going forward the market and to the second part of your question about cadence , and we've the in the release , see a we stronger Q4 than we see in Q3 .
Speaker #1: Overall , for the company of some because of the adjustments that we are seeing , especially in the retail with . You know , one of the things that we are experiencing in travel retail and is still some level of disruption , especially when it comes to Shanghai but also the online Airport , business sunrise , as you know , sunrise has stopped the have been operations all transferred a with mix China duty of free one avatar and Fujian .
Stéphane de La Faverie: You know, one of the things that we are experiencing in travel retail and is still some level of disruption, especially when it comes to Beijing, Shanghai airports, but also the online business with Sunrise. As you know, certainly, Sunrise has stopped operation. All the operation have been transferred with a mix of China Duty Free, Avolta and Wangfujing. So there's a little bit of a transition that we felt in Q2 that goes into Q3, but I really believe that there's going to be strong normalization based on the great relationship that we have had. And I want to just remind that Q2 was delivered a very strong Q2 that beat our expectation, despite actually challenging in travel retail, thanks to very strong performance in China and acceleration also in some markets in the east, in the west.
Stéphane de La Faverie: You know, one of the things that we are experiencing in travel retail and is still some level of disruption, especially when it comes to Beijing, Shanghai airports, but also the online business with Sunrise. As you know, certainly, Sunrise has stopped operation. All the operation have been transferred with a mix of China Duty Free, Avolta and Wangfujing. So there's a little bit of a transition that we felt in Q2 that goes into Q3, but I really believe that there's going to be strong normalization based on the great relationship that we have had. And I want to just remind that Q2 was delivered a very strong Q2 that beat our expectation, despite actually challenging in travel retail, thanks to very strong performance in China and acceleration also in some markets in the east, in the west.
Stéphane de La Faverie: You know, one of the things that we are experiencing in travel retail and is still some level of disruption, especially when it comes to Beijing, Shanghai airports, but also the online business with Sunrise. As you know, certainly, Sunrise has stopped operation. All the operation have been transferred with a mix of China Duty Free, Avolta and Wangfujing. So there's a little bit of a transition that we felt in Q2 that goes into Q3, but I really believe that there's going to be strong normalization based on the great relationship that we have had. And I want to just remind that Q2 was delivered a very strong Q2 that beat our expectation, despite actually challenging in travel retail, thanks to very strong performance in China and acceleration also in some markets in the east, in the west.
Stéphane de La Faverie: You know, one of the things that we are experiencing in travel retail and is still some level of disruption, especially when it comes to Beijing, Shanghai airports, but also the online business with Sunrise. As you know, certainly, Sunrise has stopped operation. All the operation have been transferred with a mix of China Duty Free, Avolta and Wangfujing. So there's a little bit of a transition that we felt in Q2 that goes into Q3, but I really believe that there's going to be strong normalization based on the great relationship that we have had. And I want to just remind that Q2 was delivered a very strong Q2 that beat our expectation, despite actually challenging in travel retail, thanks to very strong performance in China and acceleration also in some markets in the east, in the west.
Speaker #1: there's a little So transition that we bit of a felt in Q2 that into Q3 . But I really believe that going to be strong goes on the relationship great there's had .
Speaker #1: Just want to, and I remind that Q2 was delivered—a very strong Q2 that beat our expectation, despite, actually, in retail, travel, thanks to challenging performance in China and acceleration also in some markets in the East, in West.
Stéphane de La Faverie: So, I think, again, we have momentum, and there's a rebalancing of growth, but our ambition is really to deliver the top end of the guidance that we've put in, top line and in bottom line. So, we've narrowed the midpoint, but really, our objective, clearly stated today, is to deliver the top end of the guidance.
Stéphane de La Faverie: So, I think, again, we have momentum, and there's a rebalancing of growth, but our ambition is really to deliver the top end of the guidance that we've put in, top line and in bottom line. So, we've narrowed the midpoint, but really, our objective, clearly stated today, is to deliver the top end of the guidance.
Stéphane de La Faverie: So, I think, again, we have momentum, and there's a rebalancing of growth, but our ambition is really to deliver the top end of the guidance that we've put in, top line and in bottom line. So, we've narrowed the midpoint, but really, our objective, clearly stated today, is to deliver the top end of the guidance.
Stéphane de La Faverie: So, I think, again, we have momentum, and there's a rebalancing of growth, but our ambition is really to deliver the top end of the guidance that we've put in, top line and in bottom line. So, we've narrowed the midpoint, but really, our objective, clearly stated today, is to deliver the top end of the guidance.
Speaker #1: the So I think again , momentum and we have rebalancing there's a of growth . our But ambition is really to deliver the top end of the guidance that we've put in top line and in bottom line .
Speaker #1: So we've narrowed the But really our objective clearly stated midpoint . today is to deliver the top end of guidance .
[Analyst] (Citi): All right. Thank you very much.
[Analyst] (Citi): All right. Thank you very much.
[Analyst] (Citi): All right. Thank you very much.
Bonnie Herzog: All right. Thank you very much.
Stéphane de La Faverie: Thanks, Bonnie.
Stéphane de La Faverie: Thanks, Bonnie.
Stéphane de La Faverie: Thanks, Bonnie.
Stéphane de La Faverie: Thanks, Bonnie.
Rainey Mancini: The next question comes from Filippo Falorni with Citi. Please go ahead.
Rainey Mancini: The next question comes from Filippo Falorni with Citi. Please go ahead.
Rainey Mancini: The next question comes from Filippo Falorni with Citi. Please go ahead.
Rainey Mancini: The next question comes from Filippo Falorni with Citi. Please go ahead.
Speaker #4: All you very
Speaker #4: right . much Thank .
Speaker #1: Thanks , Bonnie the .
Stéphane de La Faverie: Morning, Filippo.
Stéphane de La Faverie: Morning, Filippo.
Stéphane de La Faverie: Morning, Filippo.
Stéphane de La Faverie: Morning, Filippo.
[Analyst] (Citi): Hi, good morning, everyone. Morning. Stéphane, I was hoping you could expand a bit on the travel retail business, if you can give us a state of the union of the total travel retail business, and especially in Hainan, we've seen clearly an improvement in conversion rates, in spending, in duty-free stores. So what gives? What's the outlook, as you think, going forward for that part of the business? And maybe can you comment a bit on the other parts of the travel retail business in North Asia, especially South Korea and Japan? And especially as we think about the back half of the year, where when you think about on a two-year basis, your comping more normalized shipment levels, so what is... How are you thinking that could play out in the back half of the year? Thank you.
[Analyst] (Citi): Hi, good morning, everyone. Morning. Stéphane, I was hoping you could expand a bit on the travel retail business, if you can give us a state of the union of the total travel retail business, and especially in Hainan, we've seen clearly an improvement in conversion rates, in spending, in duty-free stores. So what gives? What's the outlook, as you think, going forward for that part of the business? And maybe can you comment a bit on the other parts of the travel retail business in North Asia, especially South Korea and Japan? And especially as we think about the back half of the year, where when you think about on a two-year basis, your comping more normalized shipment levels, so what is... How are you thinking that could play out in the back half of the year? Thank you.
[Analyst] (Citi): Hi, good morning, everyone. Morning. Stéphane, I was hoping you could expand a bit on the travel retail business, if you can give us a state of the union of the total travel retail business, and especially in Hainan, we've seen clearly an improvement in conversion rates, in spending, in duty-free stores. So what gives? What's the outlook, as you think, going forward for that part of the business? And maybe can you comment a bit on the other parts of the travel retail business in North Asia, especially South Korea and Japan? And especially as we think about the back half of the year, where when you think about on a two-year basis, your comping more normalized shipment levels, so what is... How are you thinking that could play out in the back half of the year? Thank you.
Filippo Falorni: Hi, good morning, everyone. Morning. Stéphane, I was hoping you could expand a bit on the travel retail business, if you can give us a state of the union of the total travel retail business, and especially in Hainan, we've seen clearly an improvement in conversion rates, in spending, in duty-free stores. So what gives? What's the outlook, as you think, going forward for that part of the business? And maybe can you comment a bit on the other parts of the travel retail business in North Asia, especially South Korea and Japan? And especially as we think about the back half of the year, where when you think about on a two-year basis, your comping more normalized shipment levels, so what is... How are you thinking that could play out in the back half of the year? Thank you.
Speaker #3: The next question comes from Filippo Falorni with Citi. Please go ahead.
Speaker #5: Morning . morning Hi . everyone Good . Good morning . was Stephane , I hoping expand a bit on travel retail you can state of business .
Speaker #5: the union of the total If retail travel and especially in Hainan , seen clearly we've an improvement in the conversion rates in in duty spending free stores .
Speaker #5: What's gives ? what So As you the outlook ? think going forward for that the part of business . comment can you on the other parts of the travel retail in North business , especially South Korea and Japan , and especially as we think about the back the year And maybe , where when you think about on a two year basis , you're you're comp in more normalized shipment level .
Stéphane de La Faverie: Oh, thank you, Filippo, and I'll try to make a state of the union that doesn't last too long, because it's a very complex thing that is happening in travel retail. Now, the one thing I would say, let me start from where we really have strong momentum, and I see like, you know, travel retail accelerating. It is indeed in Hainan, and I think it is clearly documented that traffic is picking up in Hainan, and I'm really happy with the work that the team did in Hainan. In calendar 2025, we are growing, and we are head of the department, and we are, so we are gaining market share. What I'm excited also, we're getting market share across-...
Stéphane de La Faverie: Oh, thank you, Filippo, and I'll try to make a state of the union that doesn't last too long, because it's a very complex thing that is happening in travel retail. Now, the one thing I would say, let me start from where we really have strong momentum, and I see like, you know, travel retail accelerating. It is indeed in Hainan, and I think it is clearly documented that traffic is picking up in Hainan, and I'm really happy with the work that the team did in Hainan. In calendar 2025, we are growing, and we are head of the department, and we are, so we are gaining market share. What I'm excited also, we're getting market share across-...
Stéphane de La Faverie: Oh, thank you, Filippo, and I'll try to make a state of the union that doesn't last too long, because it's a very complex thing that is happening in travel retail. Now, the one thing I would say, let me start from where we really have strong momentum, and I see like, you know, travel retail accelerating. It is indeed in Hainan, and I think it is clearly documented that traffic is picking up in Hainan, and I'm really happy with the work that the team did in Hainan. In calendar 2025, we are growing, and we are head of the department, and we are, so we are gaining market share. What I'm excited also, we're getting market share across-...
Stéphane de La Faverie: Oh, thank you, Filippo, and I'll try to make a state of the union that doesn't last too long, because it's a very complex thing that is happening in travel retail. Now, the one thing I would say, let me start from where we really have strong momentum, and I see like, you know, travel retail accelerating. It is indeed in Hainan, and I think it is clearly documented that traffic is picking up in Hainan, and I'm really happy with the work that the team did in Hainan. In calendar 2025, we are growing, and we are head of the department, and we are, so we are gaining market share. What I'm excited also, we're getting market share across-...
Speaker #5: So what how think you're that could play out in the back half of the Thank you
Speaker #5: year .
Speaker #5: year . . Filippo .
Speaker #1: make a And I'll state of the Union that try to doesn't last too long because it's a very complex things that is happening travel retail .
Speaker #1: Now , the one thing I would say , let me in where we really have strong momentum , and I see it retail travel , accelerating .
Speaker #1: It is indeed in Hainan . it is documented And I think clearly that traffic is in picking up Hainan . And I'm really happy with really work that strong , the team did in IE9 in the calendar 25 .
Speaker #1: We growing and we are ahead of the are department and we are . So we are gaining market share . What I'm excited .
Stéphane de La Faverie: A more diverse portfolio of brand that we have done it in the past, which, if you remember, all our growth was coming from Estée Lauder and La Mer. Now we have Estée Lauder, we have La Mer, we have M·A·C, we have Jo Malone London, we have Tom Ford, that are really performing in the channel very well. One of the reasons why we're seeing this performance is we are back up driving retail with a lot of eventing, because the traffic is there, but conversion is still low. When you are there and you create really retail entertainment, we are able to convert the consumer. I'm happy to report today that the month of January in Hainan was in high double-digit for us, again, gaining market share across many of our brands.
Stéphane de La Faverie: A more diverse portfolio of brand that we have done it in the past, which, if you remember, all our growth was coming from Estée Lauder and La Mer. Now we have Estée Lauder, we have La Mer, we have M·A·C, we have Jo Malone London, we have Tom Ford, that are really performing in the channel very well. One of the reasons why we're seeing this performance is we are back up driving retail with a lot of eventing, because the traffic is there, but conversion is still low. When you are there and you create really retail entertainment, we are able to convert the consumer. I'm happy to report today that the month of January in Hainan was in high double-digit for us, again, gaining market share across many of our brands.
Stéphane de La Faverie: A more diverse portfolio of brand that we have done it in the past, which, if you remember, all our growth was coming from Estée Lauder and La Mer. Now we have Estée Lauder, we have La Mer, we have M·A·C, we have Jo Malone London, we have Tom Ford, that are really performing in the channel very well. One of the reasons why we're seeing this performance is we are back up driving retail with a lot of eventing, because the traffic is there, but conversion is still low. When you are there and you create really retail entertainment, we are able to convert the consumer. I'm happy to report today that the month of January in Hainan was in high double-digit for us, again, gaining market share across many of our brands.
Stéphane de La Faverie: A more diverse portfolio of brand that we have done it in the past, which, if you remember, all our growth was coming from Estée Lauder and La Mer. Now we have Estée Lauder, we have La Mer, we have M·A·C, we have Jo Malone London, we have Tom Ford, that are really performing in the channel very well. One of the reasons why we're seeing this performance is we are back up driving retail with a lot of eventing, because the traffic is there, but conversion is still low. When you are there and you create really retail entertainment, we are able to convert the consumer. I'm happy to report today that the month of January in Hainan was in high double-digit for us, again, gaining market share across many of our brands.
Speaker #1: market share across more we're getting Also , portfolio of brands that we have done it in the past , which remember all our growth was from coming now we have loader , we have we have Mac , we have Jo Malone , we have Tom Ford that are really loader and performing in the channel very well .
Speaker #1: And one of the reasons seen this why we've performance and we back at are retail with a driving lot of events , because the traffic is there .
Speaker #1: But conversion is still low when you are there and you create retail entertainment . We are the able to consumer and I'm happy to convert report that the today months of January in Hainan was in high double digit for again , us market across gaining brands .
Stéphane de La Faverie: So very excited by, especially going into the Chinese New Year time frame, it is very important, very clear indication that we are back able to convert traffic into, into sale. Now, I want to be very clear, Hainan is only a part of travel retail East. And I think this is where maybe there's a little bit of a misconception of how big is Hainan in the total. But travel retail East is a combination of Hainan again, the airport of Beijing and Shanghai, the universal app where people can buy online product, but is also, frankly, the rest of APAC, that is highly disrupted, Korea. And we're seeing some recovery in the rest of APAC, but it's still very small in comparison of the China ecosystem.
Stéphane de La Faverie: So very excited by, especially going into the Chinese New Year time frame, it is very important, very clear indication that we are back able to convert traffic into, into sale. Now, I want to be very clear, Hainan is only a part of travel retail East. And I think this is where maybe there's a little bit of a misconception of how big is Hainan in the total. But travel retail East is a combination of Hainan again, the airport of Beijing and Shanghai, the universal app where people can buy online product, but is also, frankly, the rest of APAC, that is highly disrupted, Korea. And we're seeing some recovery in the rest of APAC, but it's still very small in comparison of the China ecosystem.
Stéphane de La Faverie: So very excited by, especially going into the Chinese New Year time frame, it is very important, very clear indication that we are back able to convert traffic into, into sale. Now, I want to be very clear, Hainan is only a part of travel retail East. And I think this is where maybe there's a little bit of a misconception of how big is Hainan in the total. But travel retail East is a combination of Hainan again, the airport of Beijing and Shanghai, the universal app where people can buy online product, but is also, frankly, the rest of APAC, that is highly disrupted, Korea. And we're seeing some recovery in the rest of APAC, but it's still very small in comparison of the China ecosystem.
Stéphane de La Faverie: So very excited by, especially going into the Chinese New Year time frame, it is very important, very clear indication that we are back able to convert traffic into, into sale. Now, I want to be very clear, Hainan is only a part of travel retail East. And I think this is where maybe there's a little bit of a misconception of how big is Hainan in the total. But travel retail East is a combination of Hainan again, the airport of Beijing and Shanghai, the universal app where people can buy online product, but is also, frankly, the rest of APAC, that is highly disrupted, Korea. And we're seeing some recovery in the rest of APAC, but it's still very small in comparison of the China ecosystem.
Speaker #1: very by especially going excited into New Chinese the Year time It is important , very very clear indication that we are back able to convert traffic into into .
Speaker #1: sell clear , Hainan only a very Now , I want part of Retail East , and I think this is where maybe there's a little bit of travel misconception of how big is einen in the total , but travel Retail East is a combination of Hainan .
Speaker #1: Again , the airport of Beijing and Shanghai , the app where people can universal buy online products but is also , rest frankly , the of APAC .
Speaker #1: is That highly disrupted . Korea . seeing some in the rest of the pack , but it's still very small in recovery comparison of the China ecosystem .
Stéphane de La Faverie: So now let me just explain what happened in Q2, our Q2, the last quarter of the calendar year, in the ecosystem of Shanghai and Beijing and the universal app. Obviously, you know that all of this business is being in the midst of being transferred from Sunrise, like I said, to CDF, Wangfujing, and Avolta. There's a bit of a disruption in the market happening in this moment, positioning, and that's the normal course of doing business. Concessions sometime move from one retailer to another. But the universal app, that was a significant part of the business, was shut down in Q2 and remains shut down as we speak. So obviously, our ability to just, like, you know, convert is more limited.
Stéphane de La Faverie: So now let me just explain what happened in Q2, our Q2, the last quarter of the calendar year, in the ecosystem of Shanghai and Beijing and the universal app. Obviously, you know that all of this business is being in the midst of being transferred from Sunrise, like I said, to CDF, Wangfujing, and Avolta. There's a bit of a disruption in the market happening in this moment, positioning, and that's the normal course of doing business. Concessions sometime move from one retailer to another. But the universal app, that was a significant part of the business, was shut down in Q2 and remains shut down as we speak. So obviously, our ability to just, like, you know, convert is more limited.
Stéphane de La Faverie: So now let me just explain what happened in Q2, our Q2, the last quarter of the calendar year, in the ecosystem of Shanghai and Beijing and the universal app. Obviously, you know that all of this business is being in the midst of being transferred from Sunrise, like I said, to CDF, Wangfujing, and Avolta. There's a bit of a disruption in the market happening in this moment, positioning, and that's the normal course of doing business. Concessions sometime move from one retailer to another. But the universal app, that was a significant part of the business, was shut down in Q2 and remains shut down as we speak. So obviously, our ability to just, like, you know, convert is more limited.
Stéphane de La Faverie: So now let me just explain what happened in Q2, our Q2, the last quarter of the calendar year, in the ecosystem of Shanghai and Beijing and the universal app. Obviously, you know that all of this business is being in the midst of being transferred from Sunrise, like I said, to CDF, Wangfujing, and Avolta. There's a bit of a disruption in the market happening in this moment, positioning, and that's the normal course of doing business. Concessions sometime move from one retailer to another. But the universal app, that was a significant part of the business, was shut down in Q2 and remains shut down as we speak. So obviously, our ability to just, like, you know, convert is more limited.
Speaker #1: So let me just explain what happened in . Our Q2 , now last quarter of the calendar year in the Shanghai and ecosystem of Beijing and the universal app , obviously , know you of these that all business is the midst of being transferred from sunrise .
Speaker #1: Like I said , CDF , to one Fujing and there's a avatar , bit of a disruption in the market moment opening in this in positioning .
Speaker #1: And that's the normal course of doing business; concessions sometimes move from one retailer to another. But Universal App, that was a significant part of the business, was shut down in Q2 and remains down as we speak—shut.
Speaker #1: And that's the normal course of doing business concessions sometimes move from one retailer to the another , but universal app that was a significant part of the was business ability our just like obviously , is convert more .
Stéphane de La Faverie: Now, if you look at Mainland China and travel retail, we outperform in Mainland China in Q2, and in the total travel retail, to your expectation, maybe we delivered less. My point is, it's an entire ecosystem that we need to look at, of where we are capturing the sales. The going forward is very strong. I want to be very clear, it is actually this change is a good thing, especially at the time where we are managing our inventory very carefully. We are shipping only to the demand, and we see this change being the right thing. We have very strong partnership with CDF, with Wangfujing, with Avolta, locally and globally, and we are in the process of putting the right GBP to make sure that we can accelerate in the course, the remaining course of this fiscal year, but frankly, beyond.
Stéphane de La Faverie: Now, if you look at Mainland China and travel retail, we outperform in Mainland China in Q2, and in the total travel retail, to your expectation, maybe we delivered less. My point is, it's an entire ecosystem that we need to look at, of where we are capturing the sales. The going forward is very strong. I want to be very clear, it is actually this change is a good thing, especially at the time where we are managing our inventory very carefully. We are shipping only to the demand, and we see this change being the right thing. We have very strong partnership with CDF, with Wangfujing, with Avolta, locally and globally, and we are in the process of putting the right GBP to make sure that we can accelerate in the course, the remaining course of this fiscal year, but frankly, beyond.
Stéphane de La Faverie: Now, if you look at Mainland China and travel retail, we outperform in Mainland China in Q2, and in the total travel retail, to your expectation, maybe we delivered less. My point is, it's an entire ecosystem that we need to look at, of where we are capturing the sales. The going forward is very strong. I want to be very clear, it is actually this change is a good thing, especially at the time where we are managing our inventory very carefully. We are shipping only to the demand, and we see this change being the right thing. We have very strong partnership with CDF, with Wangfujing, with Avolta, locally and globally, and we are in the process of putting the right GBP to make sure that we can accelerate in the course, the remaining course of this fiscal year, but frankly, beyond.
Stéphane de La Faverie: Now, if you look at Mainland China and travel retail, we outperform in Mainland China in Q2, and in the total travel retail, to your expectation, maybe we delivered less. My point is, it's an entire ecosystem that we need to look at, of where we are capturing the sales. The going forward is very strong. I want to be very clear, it is actually this change is a good thing, especially at the time where we are managing our inventory very carefully. We are shipping only to the demand, and we see this change being the right thing. We have very strong partnership with CDF, with Wangfujing, with Avolta, locally and globally, and we are in the process of putting the right GBP to make sure that we can accelerate in the course, the remaining course of this fiscal year, but frankly, beyond.
Speaker #1: limited Now , if at and travel retail , we outperform in China Q2 and in the travel total retail to your expectation , maybe we delivered less .
Speaker #1: My is it's a really entire point ecosystem that we need to it's an at look where we are capturing the sales , is going forward the strong .
Speaker #1: I want to be very clear. It actually is that this challenge is a good one, especially at a time where we are managing our inventory very carefully.
Speaker #1: We shipping only to are the and this challenge we see being demand thing . We have very strong partnership with CDF , with one the right with avatar globally , and we in the process are putting the make GBP to right accelerate in the course .
Stéphane de La Faverie: The second part of your question, obviously like, you know, Japan and the rest. You know, Japan, actually, I'm really happy because we are demonstrating in this moment in time that even in a disrupted market, because you know, obviously, there's some geopolitical tension between various markets in the region, we've seen a dramatic reduction of traffic, even though we've been able to just gain market share. And this is the number one thing that we are focused. No matter if there is growth or no growth, we want to be in a market share position, in a market share growth, and that's what we are demonstrating. Now, early into this calendar year, we're seeing a shift from Japan to Korea and other markets in the region, and we are ready to welcome the consumers with all our brands really fully deployed.
Stéphane de La Faverie: The second part of your question, obviously like, you know, Japan and the rest. You know, Japan, actually, I'm really happy because we are demonstrating in this moment in time that even in a disrupted market, because you know, obviously, there's some geopolitical tension between various markets in the region, we've seen a dramatic reduction of traffic, even though we've been able to just gain market share. And this is the number one thing that we are focused. No matter if there is growth or no growth, we want to be in a market share position, in a market share growth, and that's what we are demonstrating. Now, early into this calendar year, we're seeing a shift from Japan to Korea and other markets in the region, and we are ready to welcome the consumers with all our brands really fully deployed.
Stéphane de La Faverie: The second part of your question, obviously like, you know, Japan and the rest. You know, Japan, actually, I'm really happy because we are demonstrating in this moment in time that even in a disrupted market, because you know, obviously, there's some geopolitical tension between various markets in the region, we've seen a dramatic reduction of traffic, even though we've been able to just gain market share. And this is the number one thing that we are focused. No matter if there is growth or no growth, we want to be in a market share position, in a market share growth, and that's what we are demonstrating. Now, early into this calendar year, we're seeing a shift from Japan to Korea and other markets in the region, and we are ready to welcome the consumers with all our brands really fully deployed.
Stéphane de La Faverie: The second part of your question, obviously like, you know, Japan and the rest. You know, Japan, actually, I'm really happy because we are demonstrating in this moment in time that even in a disrupted market, because you know, obviously, there's some geopolitical tension between various markets in the region, we've seen a dramatic reduction of traffic, even though we've been able to just gain market share. And this is the number one thing that we are focused. No matter if there is growth or no growth, we want to be in a market share position, in a market share growth, and that's what we are demonstrating. Now, early into this calendar year, we're seeing a shift from Japan to Korea and other markets in the region, and we are ready to welcome the consumers with all our brands really fully deployed.
Speaker #1: course The of this remaining year . fiscal frankly , and beyond the second part of your question , obviously , like Japan and the rest , you know , Japan , really happy because we are demonstrating moment in this time that even in a disrupted market , because , in you know , obviously there's some geopolitical tension various between markets in the region .
Speaker #1: We've seen a dramatic reduction of traffic , even though we've been able to gain just market share . And this is the number one thing that we are focused , if there no matter is growth or growth , no want to the market share be in position market share in the growth , and that's what we now demonstrating into this calendar year .
Speaker #1: We're seeing a shift from Japan to Korea and other early in the region . are And we are ready to welcome the consumers with all our brands really fully deployed .
Stéphane de La Faverie: So I want to be clear, even though there's a bit of a disruption in Q4 into Q2, we remain extremely confident about the momentum that we are building and our ability to just convert, traffic into sales, across all our brands.
Stéphane de La Faverie: So I want to be clear, even though there's a bit of a disruption in Q4 into Q2, we remain extremely confident about the momentum that we are building and our ability to just convert, traffic into sales, across all our brands.
Stéphane de La Faverie: So I want to be clear, even though there's a bit of a disruption in Q4 into Q2, we remain extremely confident about the momentum that we are building and our ability to just convert, traffic into sales, across all our brands.
Stéphane de La Faverie: So I want to be clear, even though there's a bit of a disruption in Q4 into Q2, we remain extremely confident about the momentum that we are building and our ability to just convert, traffic into sales, across all our brands.
Speaker #1: want to be clear , even though So I there's a bit of a disruption in Q4 into Q2 , remain we confident about the momentum that we building and are our extremely just convert traffic into sales across all our brands
Akhil Shrivastava: And one thing, just to add quickly, Filippo, the untold story, which Stéphane is basically double-clicking here, is the outperformance by ELC in the channel. It is in the West, where we had stated early on, as Stéphane had said, we'll win in West TR. We are winning there. We are winning in Hainan by quite a distance, and we are winning in markets like Japan, Thailand, and other places. So the outperformance by ELC in travel retail, parts of travel retail, along with China, is a significant encouragement we take for our business as we look forward.
Akhil Shrivastava: And one thing, just to add quickly, Filippo, the untold story, which Stéphane is basically double-clicking here, is the outperformance by ELC in the channel. It is in the West, where we had stated early on, as Stéphane had said, we'll win in West TR. We are winning there. We are winning in Hainan by quite a distance, and we are winning in markets like Japan, Thailand, and other places. So the outperformance by ELC in travel retail, parts of travel retail, along with China, is a significant encouragement we take for our business as we look forward.
Akhil Shrivastava: And one thing, just to add quickly, Filippo, the untold story, which Stéphane is basically double-clicking here, is the outperformance by ELC in the channel. It is in the West, where we had stated early on, as Stéphane had said, we'll win in West TR. We are winning there. We are winning in Hainan by quite a distance, and we are winning in markets like Japan, Thailand, and other places. So the outperformance by ELC in travel retail, parts of travel retail, along with China, is a significant encouragement we take for our business as we look forward.
Akhil Shrivastava: And one thing, just to add quickly, Filippo, the untold story, which Stéphane is basically double-clicking here, is the outperformance by ELC in the channel. It is in the West, where we had stated early on, as Stéphane had said, we'll win in West TR. We are winning there. We are winning in Hainan by quite a distance, and we are winning in markets like Japan, Thailand, and other places. So the outperformance by ELC in travel retail, parts of travel retail, along with China, is a significant encouragement we take for our business as we look forward.
Speaker #2: And one thing untold story Filippo , the basically double clicking . Stefan is the Here is ELC in the It is in channel .
Speaker #2: just to add quickly ,
Speaker #2: the . West where where we we had stated early on where Stefan had will said , in will win , we are winning there , we are winning in Hainan by quite a distance and we are winning in markets like Japan , Thailand and other places .
Speaker #2: So the outperformance by in ELC travel , retail , parts of travel , retail , with China along is the significant encouragement we take for our business as we look forward
Stéphane de La Faverie: Great. Thank you so much, guys. Thanks, Filippo.
Stéphane de La Faverie: Great. Thank you so much, guys. Thanks, Filippo.
Stéphane de La Faverie: Great. Thank you so much, guys. Thanks, Filippo.
Filippo Falorni: Great. Thank you so much, guys. Thanks, Filippo.
Rainey Mancini: The next question comes from Steve Powers with Deutsche Bank. Please go ahead.
Rainey Mancini: The next question comes from Steve Powers with Deutsche Bank. Please go ahead.
Rainey Mancini: The next question comes from Steve Powers with Deutsche Bank. Please go ahead.
Rainey Mancini: The next question comes from Steve Powers with Deutsche Bank. Please go ahead.
Speaker #5: Great . Thank you
Speaker #5: so much guys .
Speaker #1: Thanks , Filippo . .
[Analyst] (Deutsche Bank): Great, good morning. Thank you.
[Analyst] (Deutsche Bank): Great, good morning. Thank you.
[Analyst] (Deutsche Bank): Great, good morning. Thank you.
Steve Powers: Great, good morning. Thank you.
Speaker #3: The next question comes from Steve Powers with Deutsche Bank . Please go ahead .
Stéphane de La Faverie: Good morning, Steve.
Stéphane de La Faverie: Good morning, Steve.
Stéphane de La Faverie: Good morning, Steve.
Stéphane de La Faverie: Good morning, Steve.
[Analyst] (Deutsche Bank): Good morning. I wanted to pivot, if I could, to profitability in the quarter, which, as you highlighted, you know, was strong both on growth and operating margin. If I drill in on there a bit, though, you know, skincare delivered, you know, most of the upside, if not all of the upside. Fragrance was also, is also positive, but, you know, more in line, I think. I think on the other side of the coin was makeup, which, you know, is still, you know, essentially kind of operating at a break-even level. Maybe you could just talk about what you're seeing in that segment and how you see the progression of profitability, you know, you know, for makeup to contribute more as we go forward. Thank you.
[Analyst] (Deutsche Bank): Good morning. I wanted to pivot, if I could, to profitability in the quarter, which, as you highlighted, you know, was strong both on growth and operating margin. If I drill in on there a bit, though, you know, skincare delivered, you know, most of the upside, if not all of the upside. Fragrance was also, is also positive, but, you know, more in line, I think. I think on the other side of the coin was makeup, which, you know, is still, you know, essentially kind of operating at a break-even level. Maybe you could just talk about what you're seeing in that segment and how you see the progression of profitability, you know, you know, for makeup to contribute more as we go forward. Thank you.
[Analyst] (Deutsche Bank): Good morning. I wanted to pivot, if I could, to profitability in the quarter, which, as you highlighted, you know, was strong both on growth and operating margin. If I drill in on there a bit, though, you know, skincare delivered, you know, most of the upside, if not all of the upside. Fragrance was also, is also positive, but, you know, more in line, I think. I think on the other side of the coin was makeup, which, you know, is still, you know, essentially kind of operating at a break-even level. Maybe you could just talk about what you're seeing in that segment and how you see the progression of profitability, you know, you know, for makeup to contribute more as we go forward. Thank you.
Steve Powers: Good morning. I wanted to pivot, if I could, to profitability in the quarter, which, as you highlighted, you know, was strong both on growth and operating margin. If I drill in on there a bit, though, you know, skincare delivered, you know, most of the upside, if not all of the upside. Fragrance was also, is also positive, but, you know, more in line, I think. I think on the other side of the coin was makeup, which, you know, is still, you know, essentially kind of operating at a break-even level. Maybe you could just talk about what you're seeing in that segment and how you see the progression of profitability, you know, you know, for makeup to contribute more as we go forward. Thank you.
Speaker #6: Great . Good morning . Thank you . Good morning . Good morning . I wanted to pivot . If I could to profitability in the quarter which as you highlighted , was strong both on growth and operating margin .
Speaker #6: If I in on drill there a bit , though , skincare delivered . most You of the upside , if not all the upside know , was also was also positive .
Speaker #6: fragrance line , I think . I more in think on the But other side of the coin was makeup , which , you know , is still , you know , essentially kind of operating at even level .
Speaker #6: you could a break Maybe just talk you're seeing about what in that segment and you how see the progression of profitability . You know , for makeup to contribute more as we go forward .
Akhil Shrivastava: Thank you. Thank you, Steve. Couple of things. As we are looking to go to solid double-digit margin, we are looking to improve margins across the board, across categories, and across regions. Now, specifically answering your question on the makeup profitability this quarter, it was also impacted by the return we took on the innovation that is coming in Q3. So there is a temporary effect there, which understates makeup profitability for the quarter. However, your broader point on makeup profitability is very clear to us, and that, as Stéphane and I have communicated, this is an area where we believe we can have significantly better margins overall. No reason why it should be very dissimilar to other categories over a period of time.
Akhil Shrivastava: Thank you. Thank you, Steve. Couple of things. As we are looking to go to solid double-digit margin, we are looking to improve margins across the board, across categories, and across regions. Now, specifically answering your question on the makeup profitability this quarter, it was also impacted by the return we took on the innovation that is coming in Q3. So there is a temporary effect there, which understates makeup profitability for the quarter. However, your broader point on makeup profitability is very clear to us, and that, as Stéphane and I have communicated, this is an area where we believe we can have significantly better margins overall. No reason why it should be very dissimilar to other categories over a period of time.
Akhil Shrivastava: Thank you. Thank you, Steve. Couple of things. As we are looking to go to solid double-digit margin, we are looking to improve margins across the board, across categories, and across regions. Now, specifically answering your question on the makeup profitability this quarter, it was also impacted by the return we took on the innovation that is coming in Q3. So there is a temporary effect there, which understates makeup profitability for the quarter. However, your broader point on makeup profitability is very clear to us, and that, as Stéphane and I have communicated, this is an area where we believe we can have significantly better margins overall. No reason why it should be very dissimilar to other categories over a period of time.
Akhil Shrivastava: Thank you. Thank you, Steve. Couple of things. As we are looking to go to solid double-digit margin, we are looking to improve margins across the board, across categories, and across regions. Now, specifically answering your question on the makeup profitability this quarter, it was also impacted by the return we took on the innovation that is coming in Q3. So there is a temporary effect there, which understates makeup profitability for the quarter. However, your broader point on makeup profitability is very clear to us, and that, as Stéphane and I have communicated, this is an area where we believe we can have significantly better margins overall. No reason why it should be very dissimilar to other categories over a period of time.
Speaker #6: Thank you .
Speaker #2: Thank you , thank you , Steve , a couple of things we are as looking to go to solid double digit margin , we are looking to improve margins across board , across categories and across regions the .
Speaker #2: specifically Now , answering your question on the profitability , this quarter , it was also impacted the return we took on the by makeup innovation that is coming in quarter three .
Speaker #2: So there is a temporary effect there, which understates makeup profitability for the quarter. However, your broader point on makeup profitability is very clear to us.
Speaker #2: And as have communicated , Stefan and I this is an area where we believe we can have significantly margins better overall why it should reason dissimilar to , no over a categories be very period of time through the are work we doing on , our fixed right cost in these categories , PRP work on through the and through the acceleration , we are now even in this category , starting to see , on with the up of big double , launch wear of the improvement we and some are seeing coming profitability to this is improve .
Akhil Shrivastava: Through the work we are doing on right sizing our fixed cost in these categories, through the work on PRGP, and through the acceleration we are now starting to see, even in this category, on sales, and with the big launch coming up of Double Wear and some of the improvement we are seeing on makeup, we expect to see profitability to improve. But this is a key pillar that we are working on, Steve. In Q2, you did notice a little bit of a one-time due to the return we took on this innovation, but those are some of the salient points.
Akhil Shrivastava: Through the work we are doing on right sizing our fixed cost in these categories, through the work on PRGP, and through the acceleration we are now starting to see, even in this category, on sales, and with the big launch coming up of Double Wear and some of the improvement we are seeing on makeup, we expect to see profitability to improve. But this is a key pillar that we are working on, Steve. In Q2, you did notice a little bit of a one-time due to the return we took on this innovation, but those are some of the salient points.
Akhil Shrivastava: Through the work we are doing on right sizing our fixed cost in these categories, through the work on PRGP, and through the acceleration we are now starting to see, even in this category, on sales, and with the big launch coming up of Double Wear and some of the improvement we are seeing on makeup, we expect to see profitability to improve. But this is a key pillar that we are working on, Steve. In Q2, you did notice a little bit of a one-time due to the return we took on this innovation, but those are some of the salient points.
Akhil Shrivastava: Through the work we are doing on right sizing our fixed cost in these categories, through the work on PRGP, and through the acceleration we are now starting to see, even in this category, on sales, and with the big launch coming up of Double Wear and some of the improvement we are seeing on makeup, we expect to see profitability to improve. But this is a key pillar that we are working on, Steve. In Q2, you did notice a little bit of a one-time due to the return we took on this innovation, but those are some of the salient points.
Speaker #2: key But pillar that we are working on . On you did quarter two , Steve , in notice a little bit of a one time due to the return we took on this innovation , but those are the some of the salient points
Stéphane de La Faverie: But just one thing, Steve, on the makeup, because I think it's very important. Look, we've been always transparent. We have a lot more work to do on makeup, and we are with the team here in New York, and frankly, with all our teams around the world, we're continuing to just improve things. I'm not going to repeat what Akhil said, but a lot of things that we're doing in this moment in time related to our strategy on Beauty Reimagined is to expand distribution. We've entered TikTok Shop in the US with Clinique and M·A·C, which has allowed, actually, M·A·C to just already be in the market share game in the lead category, which is so important for M·A·C in the US. M·A·C has entered TikTok Shop in Germany.
Stéphane de La Faverie: But just one thing, Steve, on the makeup, because I think it's very important. Look, we've been always transparent. We have a lot more work to do on makeup, and we are with the team here in New York, and frankly, with all our teams around the world, we're continuing to just improve things. I'm not going to repeat what Akhil said, but a lot of things that we're doing in this moment in time related to our strategy on Beauty Reimagined is to expand distribution. We've entered TikTok Shop in the US with Clinique and M·A·C, which has allowed, actually, M·A·C to just already be in the market share game in the lead category, which is so important for M·A·C in the US. M·A·C has entered TikTok Shop in Germany.
Stéphane de La Faverie: But just one thing, Steve, on the makeup, because I think it's very important. Look, we've been always transparent. We have a lot more work to do on makeup, and we are with the team here in New York, and frankly, with all our teams around the world, we're continuing to just improve things. I'm not going to repeat what Akhil said, but a lot of things that we're doing in this moment in time related to our strategy on Beauty Reimagined is to expand distribution. We've entered TikTok Shop in the US with Clinique and M·A·C, which has allowed, actually, M·A·C to just already be in the market share game in the lead category, which is so important for M·A·C in the US. M·A·C has entered TikTok Shop in Germany.
Stéphane de La Faverie: But just one thing, Steve, on the makeup, because I think it's very important. Look, we've been always transparent. We have a lot more work to do on makeup, and we are with the team here in New York, and frankly, with all our teams around the world, we're continuing to just improve things. I'm not going to repeat what Akhil said, but a lot of things that we're doing in this moment in time related to our strategy on Beauty Reimagined is to expand distribution. We've entered TikTok Shop in the US with Clinique and M·A·C, which has allowed, actually, M·A·C to just already be in the market share game in the lead category, which is so important for M·A·C in the US. M·A·C has entered TikTok Shop in Germany.
Speaker #1: , just one thing , Steve , on the makeup , because I think it's very . And look , always transparent . We have a work to lot more do on makeup .
Speaker #1: And we are with the team New here in frankly , with all our York . teams around the And world , we're continuing to just improve things .
Speaker #1: going to repeat what Ikea said , but a lot of things that we doing in are this moment in time related to our strategy on beauty reimagine is to expand distribution .
Speaker #1: We've entered TikTok Shop in the US, and Clinique has already been allowed to just gain share in the category. Actually, MAC is so important to lead in the US market. MAC has entered TikTok Shop in Germany.
Stéphane de La Faverie: I said it again, we are about to enter, we are weeks away to enter Sephora US with MAC, which is going to be a big game changer for the brand, and we are working on more opportunities. Innovation is being ramping up. One other thing I've mentioned in my opening remark is the fast acceleration of the innovation coming in less than a year. Remember, I've committed to triple that. We're already exceeding our expectation this year. We were thinking about 16% of our innovation was going to come in less than a year, it's going to be 19%. The majority of this innovation is coming from makeup. Obviously, we can go much faster in makeup than we can do in the other categories. So we are going fast. We are deploying our makeup brand in the right distribution. We are rationalizing distribution.
Stéphane de La Faverie: I said it again, we are about to enter, we are weeks away to enter Sephora US with MAC, which is going to be a big game changer for the brand, and we are working on more opportunities. Innovation is being ramping up. One other thing I've mentioned in my opening remark is the fast acceleration of the innovation coming in less than a year. Remember, I've committed to triple that. We're already exceeding our expectation this year. We were thinking about 16% of our innovation was going to come in less than a year, it's going to be 19%. The majority of this innovation is coming from makeup. Obviously, we can go much faster in makeup than we can do in the other categories. So we are going fast. We are deploying our makeup brand in the right distribution. We are rationalizing distribution.
Stéphane de La Faverie: I said it again, we are about to enter, we are weeks away to enter Sephora US with MAC, which is going to be a big game changer for the brand, and we are working on more opportunities. Innovation is being ramping up. One other thing I've mentioned in my opening remark is the fast acceleration of the innovation coming in less than a year. Remember, I've committed to triple that. We're already exceeding our expectation this year. We were thinking about 16% of our innovation was going to come in less than a year, it's going to be 19%. The majority of this innovation is coming from makeup. Obviously, we can go much faster in makeup than we can do in the other categories. So we are going fast. We are deploying our makeup brand in the right distribution. We are rationalizing distribution.
Stéphane de La Faverie: I said it again, we are about to enter, we are weeks away to enter Sephora US with MAC, which is going to be a big game changer for the brand, and we are working on more opportunities. Innovation is being ramping up. One other thing I've mentioned in my opening remark is the fast acceleration of the innovation coming in less than a year. Remember, I've committed to triple that. We're already exceeding our expectation this year. We were thinking about 16% of our innovation was going to come in less than a year, it's going to be 19%. The majority of this innovation is coming from makeup. Obviously, we can go much faster in makeup than we can do in the other categories. So we are going fast. We are deploying our makeup brand in the right distribution. We are rationalizing distribution.
Speaker #1: I said it again, we are about to enter. We are about to enter weeks, US, with Sephora and MAC, which is going to be a big game changer for the brand, and we are on more of the opportunities working.
Speaker #1: Innovation is one other thing I've been ramping up. In my opening is the fast acceleration remarks of the innovation coming in less than a year.
Speaker #1: Remember , I've committed to triple that . We are already our . This year we expectations were thinking about 16% of our innovation was exceeding less than a come in The be 19% .
Speaker #1: majority of this innovation is coming from Make-Up . Obviously , we can go year . in faster It's can do in the other categories .
Stéphane de La Faverie: I think I also mentioned it in my prepared remarks, in terms of the freestanding store, to make sure that we are more profitable. We are going to have all the added benefit of the PRGP that continues to flow through, like, you know, the P&L this year and in fiscal 2027. Because while the PRGP ends at the end of this fiscal year, the execution of it will continue into fiscal 2027, fiscal 2027, and we will basically get some benefits. So we are on the path for recovery. It is true that skincare is growing faster because of the scale. We're very pleased with the progress that we are doing in fragrances.
Stéphane de La Faverie: I think I also mentioned it in my prepared remarks, in terms of the freestanding store, to make sure that we are more profitable. We are going to have all the added benefit of the PRGP that continues to flow through, like, you know, the P&L this year and in fiscal 2027. Because while the PRGP ends at the end of this fiscal year, the execution of it will continue into fiscal 2027, fiscal 2027, and we will basically get some benefits. So we are on the path for recovery. It is true that skincare is growing faster because of the scale. We're very pleased with the progress that we are doing in fragrances.
Stéphane de La Faverie: I think I also mentioned it in my prepared remarks, in terms of the freestanding store, to make sure that we are more profitable. We are going to have all the added benefit of the PRGP that continues to flow through, like, you know, the P&L this year and in fiscal 2027. Because while the PRGP ends at the end of this fiscal year, the execution of it will continue into fiscal 2027, fiscal 2027, and we will basically get some benefits. So we are on the path for recovery. It is true that skincare is growing faster because of the scale. We're very pleased with the progress that we are doing in fragrances.
Stéphane de La Faverie: I think I also mentioned it in my prepared remarks, in terms of the freestanding store, to make sure that we are more profitable. We are going to have all the added benefit of the PRGP that continues to flow through, like, you know, the P&L this year and in fiscal 2027. Because while the PRGP ends at the end of this fiscal year, the execution of it will continue into fiscal 2027, fiscal 2027, and we will basically get some benefits. So we are on the path for recovery. It is true that skincare is growing faster because of the scale. We're very pleased with the progress that we are doing in fragrances.
Speaker #1: we are going fast . We So are makeup than we makeup in the right brand deploying our distribution . We are rationalizing distribution .
Speaker #1: I also mentioned prepared I think it in my in terms of the to make store , sure remarks profitable and we are going to that we all the added benefit of PRP the are more year .
Speaker #1: And in fiscal 27 , while the because PRP through execution of it will continue that basically get some benefit . So we are on a It is true path for recovery .
Stéphane de La Faverie: I think makeup requires more scale, and this is why we are deploying our brand and accelerating innovation to be able to just resolve also this, this issue that we have with the makeup category. Thanks, Steve.
Stéphane de La Faverie: I think makeup requires more scale, and this is why we are deploying our brand and accelerating innovation to be able to just resolve also this, this issue that we have with the makeup category. Thanks, Steve.
Stéphane de La Faverie: I think makeup requires more scale, and this is why we are deploying our brand and accelerating innovation to be able to just resolve also this, this issue that we have with the makeup category. Thanks, Steve.
Stéphane de La Faverie: I think makeup requires more scale, and this is why we are deploying our brand and accelerating innovation to be able to just resolve also this, this issue that we have with the makeup category. Thanks, Steve.
Speaker #1: Skincare going because of the faster is scale. We're very pleased with progress that we the finances. I think makeup are doing in scale are is why we requires more our brand and accelerating innovation to be able to just resolve deploying.
Speaker #1: Also , this this , issue have with the category makeup that we . Thanks , Steve .
Rainey Mancini: The next question comes from Lauren Lieberman with Barclays. Please go ahead.
Rainey Mancini: The next question comes from Lauren Lieberman with Barclays. Please go ahead.
Rainey Mancini: The next question comes from Lauren Lieberman with Barclays. Please go ahead.
Rainey Mancini: The next question comes from Lauren Lieberman with Barclays. Please go ahead.
[Analyst] (Barclays): Thanks. Good morning, everyone.
[Analyst] (Barclays): Thanks. Good morning, everyone.
[Analyst] (Barclays): Thanks. Good morning, everyone.
Lauren Lieberman: Thanks. Good morning, everyone.
Stéphane de La Faverie: Morning, Lauren.
Stéphane de La Faverie: Morning, Lauren.
Stéphane de La Faverie: Morning, Lauren.
Stéphane de La Faverie: Morning, Lauren.
Akhil Shrivastava: Morning, Lauren.
Akhil Shrivastava: Morning, Lauren.
Akhil Shrivastava: Morning, Lauren.
Akhil Shrivastava: Morning, Lauren.
Speaker #3: The next from Lauren comes Lieberman with Barclays . Please go .
[Analyst] (Barclays): Wanted to ask a little bit about China. You called out not just the obviously strong results, but in the release, you talked about the period around 11.11 being a big component of that. So was curious if you could talk about the promotional environment around 11.11, what you're expecting in that regard for Chinese New Year. I think the market overall, lots of beauty players have talked about wanting the, wishing the environment to be less centered around those big selling moments and more balanced across the year. So just curious, sort of what you're doing to drive stronger, let's call it, like, everyday performance, and to generate excitement outside of those key, historically key holiday periods. Thanks.
[Analyst] (Barclays): Wanted to ask a little bit about China. You called out not just the obviously strong results, but in the release, you talked about the period around 11.11 being a big component of that. So was curious if you could talk about the promotional environment around 11.11, what you're expecting in that regard for Chinese New Year. I think the market overall, lots of beauty players have talked about wanting the, wishing the environment to be less centered around those big selling moments and more balanced across the year. So just curious, sort of what you're doing to drive stronger, let's call it, like, everyday performance, and to generate excitement outside of those key, historically key holiday periods. Thanks.
[Analyst] (Barclays): Wanted to ask a little bit about China. You called out not just the obviously strong results, but in the release, you talked about the period around 11.11 being a big component of that. So was curious if you could talk about the promotional environment around 11.11, what you're expecting in that regard for Chinese New Year. I think the market overall, lots of beauty players have talked about wanting the, wishing the environment to be less centered around those big selling moments and more balanced across the year. So just curious, sort of what you're doing to drive stronger, let's call it, like, everyday performance, and to generate excitement outside of those key, historically key holiday periods. Thanks.
Lauren Lieberman: Wanted to ask a little bit about China. You called out not just the obviously strong results, but in the release, you talked about the period around 11.11 being a big component of that. So was curious if you could talk about the promotional environment around 11.11, what you're expecting in that regard for Chinese New Year. I think the market overall, lots of beauty players have talked about wanting the, wishing the environment to be less centered around those big selling moments and more balanced across the year. So just curious, sort of what you're doing to drive stronger, let's call it, like, everyday performance, and to generate excitement outside of those key, historically key holiday periods. Thanks.
Speaker #7: Thanks . Good
Speaker #7: Thanks . Good
Speaker #7: everyone .
Speaker #1: Lauren . Good morning .
Speaker #2: Lauren ahead
Speaker #2: .
Speaker #7: bit ask a little morning China . question called You out not just obviously the strong but in the release you talked results , period around big 1111 being a component of that .
Speaker #7: So curious if you could was talk about the promotional environment around in that regard for you're New ? I think the expecting market overall , lots of beauty players have talked about the wishing the be environment could less centered around those big selling moments and more balanced the year .
Speaker #7: So just curious sort of what doing stronger . Let's call it like everyday drive performance and to generate excitement those outside of , historically key holiday key periods .
Stéphane de La Faverie: Oh, thank you, Lauren. It's obviously a very important, you know, discussion that we're having with the team. So yes, and thank you for acknowledging the very strong performance that we have had in China. I want to say it's now fourth consecutive quarter that we grew share in all four categories in China, and that's very important. And yes, the big period, like 11.11, like 6.18, are more promotional than others, but it is... These are highly concentrated level of sales. And the good news is that during this period, the Estée Lauder brand became, again, the number one prestige brand on Tmall and Douyin. La Mer is the number one brand in luxury on Tmall, and Jo Malone, the number one brand in prestige fragrances on Tmall.
Stéphane de La Faverie: Oh, thank you, Lauren. It's obviously a very important, you know, discussion that we're having with the team. So yes, and thank you for acknowledging the very strong performance that we have had in China. I want to say it's now fourth consecutive quarter that we grew share in all four categories in China, and that's very important. And yes, the big period, like 11.11, like 6.18, are more promotional than others, but it is... These are highly concentrated level of sales. And the good news is that during this period, the Estée Lauder brand became, again, the number one prestige brand on Tmall and Douyin. La Mer is the number one brand in luxury on Tmall, and Jo Malone, the number one brand in prestige fragrances on Tmall.
Stéphane de La Faverie: Oh, thank you, Lauren. It's obviously a very important, you know, discussion that we're having with the team. So yes, and thank you for acknowledging the very strong performance that we have had in China. I want to say it's now fourth consecutive quarter that we grew share in all four categories in China, and that's very important. And yes, the big period, like 11.11, like 6.18, are more promotional than others, but it is... These are highly concentrated level of sales. And the good news is that during this period, the Estée Lauder brand became, again, the number one prestige brand on Tmall and Douyin. La Mer is the number one brand in luxury on Tmall, and Jo Malone, the number one brand in prestige fragrances on Tmall.
Stéphane de La Faverie: Oh, thank you, Lauren. It's obviously a very important, you know, discussion that we're having with the team. So yes, and thank you for acknowledging the very strong performance that we have had in China. I want to say it's now fourth consecutive quarter that we grew share in all four categories in China, and that's very important. And yes, the big period, like 11.11, like 6.18, are more promotional than others, but it is... These are highly concentrated level of sales. And the good news is that during this period, the Estée Lauder brand became, again, the number one prestige brand on Tmall and Douyin. La Mer is the number one brand in luxury on Tmall, and Jo Malone, the number one brand in prestige fragrances on Tmall.
Speaker #7: .
Speaker #1: Well , thank you It's obviously a very important , you , discussion know that we're having with the team . So And thank you for yes .
Speaker #1: Well , thank you It's obviously a very important , you , discussion know that we're having with the team . So And thank Lauren .
Speaker #1: We had performance that was very strong in China. I want to say it’s now the fourth consecutive quarter that we gained share in four categories in China.
Speaker #1: all And that's very yes , important . And the grew period like big 618 are more like than others . But these 1111 , highly concentrated level sales .
Speaker #1: all And that's very yes , important . And the grew period like big 618 are more like than others . But these 1111 , highly concentrated level of promotional And the good it is that during this period , the other became brand again Tmall .
Stéphane de La Faverie: So it is important for us to be present and to be strong during this moment because it allows us also to recruit a lot of consumers and retain them through the year. But the interesting thing, when you go into China, every day is a moment, okay? There's every day that there is a shopping festival of some sort. Obviously, Chinese New Year, we are about to enter; we are into it, because it starts on 15 February, and it's a little bit later this year. That's why there's a bit of disruption in the months of January. We have to look at January and February together. But it's actually traditionally a period that is less promotional. It is about more gifting. It is about more experience that we are bringing to the consumers.
Stéphane de La Faverie: So it is important for us to be present and to be strong during this moment because it allows us also to recruit a lot of consumers and retain them through the year. But the interesting thing, when you go into China, every day is a moment, okay? There's every day that there is a shopping festival of some sort. Obviously, Chinese New Year, we are about to enter; we are into it, because it starts on 15 February, and it's a little bit later this year. That's why there's a bit of disruption in the months of January. We have to look at January and February together. But it's actually traditionally a period that is less promotional. It is about more gifting. It is about more experience that we are bringing to the consumers.
Stéphane de La Faverie: So it is important for us to be present and to be strong during this moment because it allows us also to recruit a lot of consumers and retain them through the year. But the interesting thing, when you go into China, every day is a moment, okay? There's every day that there is a shopping festival of some sort. Obviously, Chinese New Year, we are about to enter; we are into it, because it starts on 15 February, and it's a little bit later this year. That's why there's a bit of disruption in the months of January. We have to look at January and February together. But it's actually traditionally a period that is less promotional. It is about more gifting. It is about more experience that we are bringing to the consumers.
Stéphane de La Faverie: So it is important for us to be present and to be strong during this moment because it allows us also to recruit a lot of consumers and retain them through the year. But the interesting thing, when you go into China, every day is a moment, okay? There's every day that there is a shopping festival of some sort. Obviously, Chinese New Year, we are about to enter; we are into it, because it starts on 15 February, and it's a little bit later this year. That's why there's a bit of disruption in the months of January. We have to look at January and February together. But it's actually traditionally a period that is less promotional. It is about more gifting. It is about more experience that we are bringing to the consumers.
Speaker #1: doing brand on la And the number the number one brand in one prestige Tmall . Malone , the number And Jo France's Prestige Timor .
Speaker #1: one brand in it is important for us to be present and to be strong during this moment allows us So also to recruit a lot of because it and retain consumers them through the But the interesting thing , when you go into , every a day is moment year .
Speaker #1: there's shopping festival or in sort there is a , obviously , Chinese some Year . We are enter . about to are into it starts on because it We February 15th bit later this and it's a little why there's a bit of year .
Speaker #1: Look at January. We have to add January together, but February—it's the month of actual period that is less. It's about, more traditionally, a gifting.
Stéphane de La Faverie: And that's what I mentioned, like, you know, earlier, when we had the question on travel retail, about also creating Retailtainment. So our team, both in Travel Retail China and in Mainland China, are laser focused in creating eventing VVIP reach to the consumer. So we depend less on the high promotionality of the two major shopping festivals, being 6.18 and 11.11. And there's plenty of others. There's, like, International Valentine's Day, there's Chinese Valentine's Day, there's Women's Day. I could go on and on on the number of events. We're also driving our freestanding store fleet. We're accelerating the number of freestanding stores in the market, and this is certainly the part of the distribution we've accelerated the most that allows us to just bring experience to the consumer, so we don't rely so much on the high traffic promotional moment.
Stéphane de La Faverie: And that's what I mentioned, like, you know, earlier, when we had the question on travel retail, about also creating Retailtainment. So our team, both in Travel Retail China and in Mainland China, are laser focused in creating eventing VVIP reach to the consumer. So we depend less on the high promotionality of the two major shopping festivals, being 6.18 and 11.11. And there's plenty of others. There's, like, International Valentine's Day, there's Chinese Valentine's Day, there's Women's Day. I could go on and on on the number of events. We're also driving our freestanding store fleet. We're accelerating the number of freestanding stores in the market, and this is certainly the part of the distribution we've accelerated the most that allows us to just bring experience to the consumer, so we don't rely so much on the high traffic promotional moment.
Stéphane de La Faverie: And that's what I mentioned, like, you know, earlier, when we had the question on travel retail, about also creating Retailtainment. So our team, both in Travel Retail China and in Mainland China, are laser focused in creating eventing VVIP reach to the consumer. So we depend less on the high promotionality of the two major shopping festivals, being 6.18 and 11.11. And there's plenty of others. There's, like, International Valentine's Day, there's Chinese Valentine's Day, there's Women's Day. I could go on and on on the number of events. We're also driving our freestanding store fleet. We're accelerating the number of freestanding stores in the market, and this is certainly the part of the distribution we've accelerated the most that allows us to just bring experience to the consumer, so we don't rely so much on the high traffic promotional moment.
Stéphane de La Faverie: And that's what I mentioned, like, you know, earlier, when we had the question on travel retail, about also creating Retailtainment. So our team, both in Travel Retail China and in Mainland China, are laser focused in creating eventing VVIP reach to the consumer. So we depend less on the high promotionality of the two major shopping festivals, being 6.18 and 11.11. And there's plenty of others. There's, like, International Valentine's Day, there's Chinese Valentine's Day, there's Women's Day. I could go on and on on the number of events. We're also driving our freestanding store fleet. We're accelerating the number of freestanding stores in the market, and this is certainly the part of the distribution we've accelerated the most that allows us to just bring experience to the consumer, so we don't rely so much on the high traffic promotional moment.
Speaker #1: It more experience that we is about are That's bringing to the when we earlier mentioned had the question on travel about promotional . retail So also our team , both creating travel China retail China , mainland , are laser Retailtainment .
Speaker #1: It more experience that we is about are That's bringing to the when we earlier mentioned had the question on travel about promotional . retail So also our team , both creating travel China retail China , mainland , are laser Retailtainment . and in creating , inventing the rich to the consumer .
Speaker #1: VIP we So depend on the high of the emotionality shopping festival being six , and 1111 . And there's plenty of others . There's like Valentine's Day , International there's Chinese Valentine's Day , there's Women's two major Day .
Speaker #1: I go on and could on on 18 events . We of also driving our We store fleet . number of accelerating the freestanding stores in the market .
Speaker #1: And this is freestanding part of the with distribution most allows us that experience consumer . to the So the high on traffic So much moment .
Stéphane de La Faverie: So I feel, look, we're in a good position. I mean, just to quote few result, we've gained in Q2, 22 basis points in skincare, 87 in makeup, 100 in fragrances, 85 in hair care. These are not small gains by any means. And frankly, that was not only driven by 11.11, but also the post-11.11, going into December in the preparation of Chinese New Year. So rest assured that we are laser focused on balancing the year, so we can continue to raise the consumer-facing spend in the markets, as well as really increasing the number of experience and connection we're creating with the consumers. But the momentum is good. I've been also very clear that China FY calendar 2025, we were lapsing two years of negative trend. The good news is that we've accelerated, and we've accelerated above the market.
Stéphane de La Faverie: So I feel, look, we're in a good position. I mean, just to quote few result, we've gained in Q2, 22 basis points in skincare, 87 in makeup, 100 in fragrances, 85 in hair care. These are not small gains by any means. And frankly, that was not only driven by 11.11, but also the post-11.11, going into December in the preparation of Chinese New Year. So rest assured that we are laser focused on balancing the year, so we can continue to raise the consumer-facing spend in the markets, as well as really increasing the number of experience and connection we're creating with the consumers. But the momentum is good. I've been also very clear that China FY calendar 2025, we were lapsing two years of negative trend. The good news is that we've accelerated, and we've accelerated above the market.
Stéphane de La Faverie: So I feel, look, we're in a good position. I mean, just to quote few result, we've gained in Q2, 22 basis points in skincare, 87 in makeup, 100 in fragrances, 85 in hair care. These are not small gains by any means. And frankly, that was not only driven by 11.11, but also the post-11.11, going into December in the preparation of Chinese New Year. So rest assured that we are laser focused on balancing the year, so we can continue to raise the consumer-facing spend in the markets, as well as really increasing the number of experience and connection we're creating with the consumers. But the momentum is good. I've been also very clear that China FY calendar 2025, we were lapsing two years of negative trend. The good news is that we've accelerated, and we've accelerated above the market.
Stéphane de La Faverie: So I feel, look, we're in a good position. I mean, just to quote few result, we've gained in Q2, 22 basis points in skincare, 87 in makeup, 100 in fragrances, 85 in hair care. These are not small gains by any means. And frankly, that was not only driven by 11.11, but also the post-11.11, going into December in the preparation of Chinese New Year. So rest assured that we are laser focused on balancing the year, so we can continue to raise the consumer-facing spend in the markets, as well as really increasing the number of experience and connection we're creating with the consumers. But the momentum is good. I've been also very clear that China FY calendar 2025, we were lapsing two years of negative trend. The good news is that we've accelerated, and we've accelerated above the market.
Speaker #1: rely . So I feel like we're in a good position just results . few We've to gained in quote Q2 , 22 basis points in skincare , we don't makeup , France , 87 in 85 in haircare are 100 in not small gains .
Speaker #1: any And These frankly , there was not only means . driven by but post also the December . In the preparation of Chinese New Year .
Speaker #1: So, rest assured that laser, we are focused on balancing the year so we can continue to raise the consumer-facing price in the market, as well as really increasing the number of experience connections we are creating with consumers.
Speaker #1: But the is momentum good the . I've been very that clear China also Calendar 25 , we were lapsing two years of negative trend .
Stéphane de La Faverie: The consumer sentiment is still subdued, but when we create the right experience, not only through promotion, we are able to convert them. So we are thinking that 2026, there's still a lot of opportunities, but we are now starting to lapse much stronger base of 2025 into 2026.
Stéphane de La Faverie: The consumer sentiment is still subdued, but when we create the right experience, not only through promotion, we are able to convert them. So we are thinking that 2026, there's still a lot of opportunities, but we are now starting to lapse much stronger base of 2025 into 2026.
Stéphane de La Faverie: The consumer sentiment is still subdued, but when we create the right experience, not only through promotion, we are able to convert them. So we are thinking that 2026, there's still a lot of opportunities, but we are now starting to lapse much stronger base of 2025 into 2026.
Stéphane de La Faverie: The consumer sentiment is still subdued, but when we create the right experience, not only through promotion, we are able to convert them. So we are thinking that 2026, there's still a lot of opportunities, but we are now starting to lapse much stronger base of 2025 into 2026.
Speaker #1: The good news we've accelerated and we've accelerated above the is that market . The sentiment is still subdued , but when we create the right experience , not only through promotion , we are able to are thinking So we that convert them .
Speaker #1: a lot of opportunities , but we are now 26 , lapse stronger much base of 25 into 26 .
Akhil Shrivastava: One thing just to add, Lauren, that our discount levels in China are coming down while we are driving this outstanding growth and outperformance of the market. So not only is, of course, sales coming, discounts are reducing, and then, of course, profitability is improving.
Akhil Shrivastava: One thing just to add, Lauren, that our discount levels in China are coming down while we are driving this outstanding growth and outperformance of the market. So not only is, of course, sales coming, discounts are reducing, and then, of course, profitability is improving.
Akhil Shrivastava: One thing just to add, Lauren, that our discount levels in China are coming down while we are driving this outstanding growth and outperformance of the market. So not only is, of course, sales coming, discounts are reducing, and then, of course, profitability is improving.
Akhil Shrivastava: One thing just to add, Lauren, that our discount levels in China are coming down while we are driving this outstanding growth and outperformance of the market. So not only is, of course, sales coming, discounts are reducing, and then, of course, profitability is improving.
Speaker #2: And one thing just to add , Lauren , that our levels discount coming down are while we are driving this outstanding out growth and outperformance of the market .
Stéphane de La Faverie: And we are doing the same in travel retail China. Also, we are just like, you know, cutting the discount, the retailers also. And in the midst of this transition with the new retailers, this is obviously like, you know, conversation to just make sure that there's less discount in the market, and we drive more conversion through experience going forward. All the channel is evolving to be much more experiential, which I think is a good thing for the long term of our brands.
Stéphane de La Faverie: And we are doing the same in travel retail China. Also, we are just like, you know, cutting the discount, the retailers also. And in the midst of this transition with the new retailers, this is obviously like, you know, conversation to just make sure that there's less discount in the market, and we drive more conversion through experience going forward. All the channel is evolving to be much more experiential, which I think is a good thing for the long term of our brands.
Stéphane de La Faverie: And we are doing the same in travel retail China. Also, we are just like, you know, cutting the discount, the retailers also. And in the midst of this transition with the new retailers, this is obviously like, you know, conversation to just make sure that there's less discount in the market, and we drive more conversion through experience going forward. All the channel is evolving to be much more experiential, which I think is a good thing for the long term of our brands.
Stéphane de La Faverie: And we are doing the same in travel retail China. Also, we are just like, you know, cutting the discount, the retailers also. And in the midst of this transition with the new retailers, this is obviously like, you know, conversation to just make sure that there's less discount in the market, and we drive more conversion through experience going forward. All the channel is evolving to be much more experiential, which I think is a good thing for the long term of our brands.
Speaker #2: not So only is of course sales coming , discounts are reducing . And then of course profitability is improving .
Speaker #1: same in travel And we are also . We are just like cutting the discount . The retailers also . And in of this the midst with the new retailers , this is obviously like in a conversation to just make is less discount in the market .
Speaker #1: same in travel And we are also . We are just like cutting the discount . The retailers also . And in of this the midst with the new retailers , this is obviously like in a conversation to just make is less discount in the sure that there And we drive China more conversion going forward .
Speaker #1: experience through channel is evolving to be much more experiential , which I think is a good thing for the term of our brands .
Rainey Mancini: The next question comes from Rupesh Parikh with Oppenheimer. Please go ahead.
Rainey Mancini: The next question comes from Rupesh Parikh with Oppenheimer. Please go ahead.
Rainey Mancini: The next question comes from Rupesh Parikh with Oppenheimer. Please go ahead.
Rainey Mancini: The next question comes from Rupesh Parikh with Oppenheimer. Please go ahead.
[Analyst] (Oppenheimer): Good morning, and thanks for taking my question. So I just wanted to go back to the North America segment. I was hoping to get more color just in terms of some of the dynamics between sell-in and sell-out, and whether you expect that gap to be improved as you... or, or closed as you exit the fiscal year? Thank you.
[Analyst] (Oppenheimer): Good morning, and thanks for taking my question. So I just wanted to go back to the North America segment. I was hoping to get more color just in terms of some of the dynamics between sell-in and sell-out, and whether you expect that gap to be improved as you... or, or closed as you exit the fiscal year? Thank you.
[Analyst] (Oppenheimer): Good morning, and thanks for taking my question. So I just wanted to go back to the North America segment. I was hoping to get more color just in terms of some of the dynamics between sell-in and sell-out, and whether you expect that gap to be improved as you... or, or closed as you exit the fiscal year? Thank you.
Rupesh Parikh: Good morning, and thanks for taking my question. So I just wanted to go back to the North America segment. I was hoping to get more color just in terms of some of the dynamics between sell-in and sell-out, and whether you expect that gap to be improved as you... or, or closed as you exit the fiscal year? Thank you.
Speaker #3: The comes from question Parikh Rupesh with next Oppenheimer . ahead .
Speaker #8: Good morning and thanks for taking my just question . wanted to go So I back to the North America segment . I was hoping to get more just in color
Speaker #8: dynamics the selling and sell and whether you terms of some of gap to be improved as you or close as you exit the fiscal year .
Akhil Shrivastava: So, Rupesh, thank you. And, when we did Q1, we did have a significant gap, which we talked about on the call. We had about 5-point gap, and Stéphane and I had said that this gap should reduce. In Q2, this gap has significantly reduced and should continue to be lower than where we were in Q1. We do expect an ongoing gap of a couple of points, mainly driven by the fact that as we move to these online platforms, some of the media that we are investing, which is the ANP on these channels, gets a reduction from sales line versus an OpEx line. So this is not-- this doesn't impact profitability, it's simply the arrangement or the contract, which reduces sales.
Akhil Shrivastava: So, Rupesh, thank you. And, when we did Q1, we did have a significant gap, which we talked about on the call. We had about 5-point gap, and Stéphane and I had said that this gap should reduce. In Q2, this gap has significantly reduced and should continue to be lower than where we were in Q1. We do expect an ongoing gap of a couple of points, mainly driven by the fact that as we move to these online platforms, some of the media that we are investing, which is the ANP on these channels, gets a reduction from sales line versus an OpEx line. So this is not-- this doesn't impact profitability, it's simply the arrangement or the contract, which reduces sales.
Akhil Shrivastava: So, Rupesh, thank you. And, when we did Q1, we did have a significant gap, which we talked about on the call. We had about 5-point gap, and Stéphane and I had said that this gap should reduce. In Q2, this gap has significantly reduced and should continue to be lower than where we were in Q1. We do expect an ongoing gap of a couple of points, mainly driven by the fact that as we move to these online platforms, some of the media that we are investing, which is the ANP on these channels, gets a reduction from sales line versus an OpEx line. So this is not-- this doesn't impact profitability, it's simply the arrangement or the contract, which reduces sales.
Akhil Shrivastava: So, Rupesh, thank you. And, when we did Q1, we did have a significant gap, which we talked about on the call. We had about 5-point gap, and Stéphane and I had said that this gap should reduce. In Q2, this gap has significantly reduced and should continue to be lower than where we were in Q1. We do expect an ongoing gap of a couple of points, mainly driven by the fact that as we move to these online platforms, some of the media that we are investing, which is the ANP on these channels, gets a reduction from sales line versus an OpEx line. So this is not-- this doesn't impact profitability, it's simply the arrangement or the contract, which reduces sales.
Speaker #8: Thank you .
Speaker #2: So Please go , Rupesh , thank you . And our when we when we one , we did quarter did have a significant gap which we talked about on the call .
Speaker #2: had about We . And Stefan and I had said should reduce this gap in quarter two . This gap has significantly reduced and should lower than continue to where we Q1 .
Speaker #2: were in We be do of a expect a couple of points , mainly driven by the fact we that as move to these platforms , some of the media that we investing are , which is the amp on these channels , is gets a reduction sales line versus an OpEx from line .
Akhil Shrivastava: So when these channels are in growth mode year-over-year, that mix causes that. The other factor has been inventory, where we have made significant progress. So our inventory, frankly, everywhere in the world, are lower or in line with where we need it to be, including in North America. Now, North America is, of course, a shifting retail landscape, so we have to constantly manage it. But what we are seeing is a clear improvement and difference between retail growth and net growth. And I also wanted to follow up on Bonnie's comment earlier, which is that: Look, North America, Q1 was down. Q2 is a positive, and we said full year would be flattish, which means the rest of the years after Q1 should be positive for North America. So we and that's what we are working towards.
Akhil Shrivastava: So when these channels are in growth mode year-over-year, that mix causes that. The other factor has been inventory, where we have made significant progress. So our inventory, frankly, everywhere in the world, are lower or in line with where we need it to be, including in North America. Now, North America is, of course, a shifting retail landscape, so we have to constantly manage it. But what we are seeing is a clear improvement and difference between retail growth and net growth. And I also wanted to follow up on Bonnie's comment earlier, which is that: Look, North America, Q1 was down. Q2 is a positive, and we said full year would be flattish, which means the rest of the years after Q1 should be positive for North America. So we and that's what we are working towards.
Akhil Shrivastava: So when these channels are in growth mode year-over-year, that mix causes that. The other factor has been inventory, where we have made significant progress. So our inventory, frankly, everywhere in the world, are lower or in line with where we need it to be, including in North America. Now, North America is, of course, a shifting retail landscape, so we have to constantly manage it. But what we are seeing is a clear improvement and difference between retail growth and net growth. And I also wanted to follow up on Bonnie's comment earlier, which is that: Look, North America, Q1 was down. Q2 is a positive, and we said full year would be flattish, which means the rest of the years after Q1 should be positive for North America. So we and that's what we are working towards.
Akhil Shrivastava: So when these channels are in growth mode year-over-year, that mix causes that. The other factor has been inventory, where we have made significant progress. So our inventory, frankly, everywhere in the world, are lower or in line with where we need it to be, including in North America. Now, North America is, of course, a shifting retail landscape, so we have to constantly manage it. But what we are seeing is a clear improvement and difference between retail growth and net growth. And I also wanted to follow up on Bonnie's comment earlier, which is that: Look, North America, Q1 was down. Q2 is a positive, and we said full year would be flattish, which means the rest of the years after Q1 should be positive for North America. So we and that's what we are working towards.
Speaker #2: So this is this doesn't impact not profitability . Simply the arrangement or the contract , which reduces sales . So when these channels are in growth mode year on year mix causes that .
Speaker #2: So this is this doesn't impact not profitability . Simply the arrangement or the contract , which reduces sales . So when these channels are in growth mode year on year mix causes that , that has been where we have inventory made significant progress .
Speaker #2: So our inventory, frankly, everywhere in the world, are lower or where we are in line to be, need it North America.
Speaker #2: including in America is , of course , a shifting retail landscape . So we have to manage . But it what we seeing is are improvement difference between in retail growth and growth .
Speaker #2: a clear And I also wanted to on Bonnie's comment is that earlier , which look , net North America first down follow up .
Speaker #2: Second quarter is a positive . said full year would And we means the rest of the year quarter one should be positive constantly America .
Akhil Shrivastava: So, of course, when we combine Q1 net sales growth, which was a negative, we had the full year flat. North America trends are also improving and should Q2 to Q3 to Q4, we expect more in positive versus flat, including Q1, the full year was flat. Hopefully, that clarifies-
Akhil Shrivastava: So, of course, when we combine Q1 net sales growth, which was a negative, we had the full year flat. North America trends are also improving and should Q2 to Q3 to Q4, we expect more in positive versus flat, including Q1, the full year was flat. Hopefully, that clarifies-
Akhil Shrivastava: So, of course, when we combine Q1 net sales growth, which was a negative, we had the full year flat. North America trends are also improving and should Q2 to Q3 to Q4, we expect more in positive versus flat, including Q1, the full year was flat. Hopefully, that clarifies-
Akhil Shrivastava: So, of course, when we combine Q1 net sales growth, which was a negative, we had the full year flat. North America trends are also improving and should Q2 to Q3 to Q4, we expect more in positive versus flat, including Q1, the full year was flat. Hopefully, that clarifies-
Speaker #2: So and we working are So of course when towards . combine quarter one net sales growth , which was a negative , we had the full year flat .
Speaker #2: So North America trends are also improving . And should should a quarter two to quarter , to quarter four . expect more in versus flat including three The full one .
[Analyst] (Oppenheimer): Great. Thank you for that.
[Analyst] (Oppenheimer): Great. Thank you for that.
[Analyst] (Oppenheimer): Great. Thank you for that.
Rupesh Parikh: Great. Thank you for that.
Akhil Shrivastava: Thanks.
Akhil Shrivastava: Thanks.
Akhil Shrivastava: Thanks.
Akhil Shrivastava: Thanks.
[Analyst] (Oppenheimer): Thank you.
[Analyst] (Oppenheimer): Thank you.
[Analyst] (Oppenheimer): Thank you.
Rupesh Parikh: Thank you.
Speaker #2: quarter year was positive flat . Hopefully that clarifies . We
Rainey Mancini: The next question comes from Dara Mohsenian with Morgan Stanley. Please go ahead.
Rainey Mancini: The next question comes from Dara Mohsenian with Morgan Stanley. Please go ahead.
Rainey Mancini: The next question comes from Dara Mohsenian with Morgan Stanley. Please go ahead.
Rainey Mancini: The next question comes from Dara Mohsenian with Morgan Stanley. Please go ahead.
Speaker #8: Thank you .
[Analyst] (Morgan Stanley): Hey, good morning. So I just wanted to follow up on the US. Could you give us a sense now that calendar 2025 is in the books, how much of your business has shifted more to the, what you characterize as higher growth channels, versus the percent of mix that's maybe in some of the heritage channels that aren't performing as well? And just give us an update on where you stand in the brand evolution, as you move some of the brands, towards, increasingly towards these higher growth channels, and just where we stand in that evolution and, and what the plans are going forward.
[Analyst] (Morgan Stanley): Hey, good morning. So I just wanted to follow up on the US. Could you give us a sense now that calendar 2025 is in the books, how much of your business has shifted more to the, what you characterize as higher growth channels, versus the percent of mix that's maybe in some of the heritage channels that aren't performing as well? And just give us an update on where you stand in the brand evolution, as you move some of the brands, towards, increasingly towards these higher growth channels, and just where we stand in that evolution and, and what the plans are going forward.
[Analyst] (Morgan Stanley): Hey, good morning. So I just wanted to follow up on the US. Could you give us a sense now that calendar 2025 is in the books, how much of your business has shifted more to the, what you characterize as higher growth channels, versus the percent of mix that's maybe in some of the heritage channels that aren't performing as well? And just give us an update on where you stand in the brand evolution, as you move some of the brands, towards, increasingly towards these higher growth channels, and just where we stand in that evolution and, and what the plans are going forward.
Dara Mohsenian: Hey, good morning. So I just wanted to follow up on the US. Could you give us a sense now that calendar 2025 is in the books, how much of your business has shifted more to the, what you characterize as higher growth channels, versus the percent of mix that's maybe in some of the heritage channels that aren't performing as well? And just give us an update on where you stand in the brand evolution, as you move some of the brands, towards, increasingly towards these higher growth channels, and just where we stand in that evolution and, and what the plans are going forward.
Speaker #3: The next question comes from Dara Mohsenian with Stanley . Morgan ahead
Speaker #3: .
Speaker #9: Hey good morning . So I just wanted to follow on the up . Can you give us a sense now that calendar 25 is in the books , how much of your has business more the to what you shifted characterize as higher channels growth versus the mix ?
Speaker #9: percent of That's maybe in heritage channels that aren't well . some of the And just give us an update on where you stand in the brand evolution as you move some of the performing as towards towards these higher growth channels and just where in that evolution and plans are going increasingly what the forward .
Stéphane de La Faverie: Yeah. No, thank you. Thank you, Dara, for the question. So look, in North America, you know, today, and I think we've mentioned it, we are continuing to decrease the penetration of department store in our total business. That's your question, and today it's like, you know, at 30% or less. Frankly, it is way less on some brands. Obviously, Lauder, Clinique, and MAC are still brands that have, like, a higher penetration in the department store than other brands that have a very limited penetration. We are, as demonstrated, increasing really fast our penetration to the online players like Amazon and now TikTok Shop. We have, we've moved a lot of brands. We have 12 brands in the US, on Amazon US.
Stéphane de La Faverie: Yeah. No, thank you. Thank you, Dara, for the question. So look, in North America, you know, today, and I think we've mentioned it, we are continuing to decrease the penetration of department store in our total business. That's your question, and today it's like, you know, at 30% or less. Frankly, it is way less on some brands. Obviously, Lauder, Clinique, and MAC are still brands that have, like, a higher penetration in the department store than other brands that have a very limited penetration. We are, as demonstrated, increasing really fast our penetration to the online players like Amazon and now TikTok Shop. We have, we've moved a lot of brands. We have 12 brands in the US, on Amazon US.
Stéphane de La Faverie: Yeah. No, thank you. Thank you, Dara, for the question. So look, in North America, you know, today, and I think we've mentioned it, we are continuing to decrease the penetration of department store in our total business. That's your question, and today it's like, you know, at 30% or less. Frankly, it is way less on some brands. Obviously, Lauder, Clinique, and MAC are still brands that have, like, a higher penetration in the department store than other brands that have a very limited penetration. We are, as demonstrated, increasing really fast our penetration to the online players like Amazon and now TikTok Shop. We have, we've moved a lot of brands. We have 12 brands in the US, on Amazon US.
Stéphane de La Faverie: Yeah. No, thank you. Thank you, Dara, for the question. So look, in North America, you know, today, and I think we've mentioned it, we are continuing to decrease the penetration of department store in our total business. That's your question, and today it's like, you know, at 30% or less. Frankly, it is way less on some brands. Obviously, Lauder, Clinique, and MAC are still brands that have, like, a higher penetration in the department store than other brands that have a very limited penetration. We are, as demonstrated, increasing really fast our penetration to the online players like Amazon and now TikTok Shop. We have, we've moved a lot of brands. We have 12 brands in the US, on Amazon US.
Speaker #1: Yeah , no , thank you . Thank you for question . So look , in North America , you know , today and I think we've mentioned it , we are continuing decrease the to penetration of department our total store in business .
Speaker #1: That's your question . today it's like 30% or less . Frankly , it is way less than some brands . at Obviously loader clinic and Mac are still brands that And higher a penetration in have like the department store than other brands that have a very limited distribution .
Speaker #1: We are penetration as as demonstrated . really Increasing penetration to the fast . Our online Amazon . players like TikTok shop . We moved a lot of brands .
Stéphane de La Faverie: So this is really outstanding to have been able to just move that quickly in the channel. Again, M·A·C is moving into Sephora, but we have really strong partnership with, like, you know, Ulta and with many of our brands there. So, like, you know, the penetration of specialty multi is increasing, the penetration of the online player is increasing. The penetration of our direct-to-consumer business is also increasing, especially our brand.com, but also freestanding stores in luxury fragrances. You know, we've opened some stores, and we are planning to open more in the future, as the consumer, the luxury consumer, is gravitating towards, even in the US, towards more experienced, unique, unique brand proposition selling environments.
Stéphane de La Faverie: So this is really outstanding to have been able to just move that quickly in the channel. Again, M·A·C is moving into Sephora, but we have really strong partnership with, like, you know, Ulta and with many of our brands there. So, like, you know, the penetration of specialty multi is increasing, the penetration of the online player is increasing. The penetration of our direct-to-consumer business is also increasing, especially our brand.com, but also freestanding stores in luxury fragrances. You know, we've opened some stores, and we are planning to open more in the future, as the consumer, the luxury consumer, is gravitating towards, even in the US, towards more experienced, unique, unique brand proposition selling environments.
Stéphane de La Faverie: So this is really outstanding to have been able to just move that quickly in the channel. Again, M·A·C is moving into Sephora, but we have really strong partnership with, like, you know, Ulta and with many of our brands there. So, like, you know, the penetration of specialty multi is increasing, the penetration of the online player is increasing. The penetration of our direct-to-consumer business is also increasing, especially our brand.com, but also freestanding stores in luxury fragrances. You know, we've opened some stores, and we are planning to open more in the future, as the consumer, the luxury consumer, is gravitating towards, even in the US, towards more experienced, unique, unique brand proposition selling environments.
Stéphane de La Faverie: So this is really outstanding to have been able to just move that quickly in the channel. Again, M·A·C is moving into Sephora, but we have really strong partnership with, like, you know, Ulta and with many of our brands there. So, like, you know, the penetration of specialty multi is increasing, the penetration of the online player is increasing. The penetration of our direct-to-consumer business is also increasing, especially our brand.com, but also freestanding stores in luxury fragrances. You know, we've opened some stores, and we are planning to open more in the future, as the consumer, the luxury consumer, is gravitating towards, even in the US, towards more experienced, unique, unique brand proposition selling environments.
Speaker #1: We have 12 brands in the US on US . So Amazon , really outstanding to have this is to just been able move that quickly channel .
Speaker #1: Again , Mac is in the into Sephora , but we have really strong partnership with Ulta and with many of our brands there .
Speaker #1: So like the penetration of specialty increasing is penetration of the online is player increasing the penetration of our dyke to consumer business is also increasing , especially our brand.com , but also stores in luxury pharmacies .
Speaker #1: You know , we've freestanding opened some stores and we are planning to open more in the future as the consumer , the luxury consumer is gravitating towards , even in the US , towards more experience .
Stéphane de La Faverie: So, we are really on the right path, you know, Dara, to just, like, you know, being able to just, like, you know, make this move and to be less and less dependent. Now, I want to be very clear, the department store remain a very important and strategic channel for some of our brands, and we are working with our partners, all the way from, like, you know, Macy's to Bloomingdale's to, like, you know, even Saks, in this moment in time, to just make sure that we capture, you know, the consumer. We have very strong position, often leading position in these department stores, and we need to just protect it. But at the same time, we are clearly stated as part of our Beauty Reimagined, that we are moving where the consumer is moving.
Stéphane de La Faverie: So, we are really on the right path, you know, Dara, to just, like, you know, being able to just, like, you know, make this move and to be less and less dependent. Now, I want to be very clear, the department store remain a very important and strategic channel for some of our brands, and we are working with our partners, all the way from, like, you know, Macy's to Bloomingdale's to, like, you know, even Saks, in this moment in time, to just make sure that we capture, you know, the consumer. We have very strong position, often leading position in these department stores, and we need to just protect it. But at the same time, we are clearly stated as part of our Beauty Reimagined, that we are moving where the consumer is moving.
Stéphane de La Faverie: So, we are really on the right path, you know, Dara, to just, like, you know, being able to just, like, you know, make this move and to be less and less dependent. Now, I want to be very clear, the department store remain a very important and strategic channel for some of our brands, and we are working with our partners, all the way from, like, you know, Macy's to Bloomingdale's to, like, you know, even Saks, in this moment in time, to just make sure that we capture, you know, the consumer. We have very strong position, often leading position in these department stores, and we need to just protect it. But at the same time, we are clearly stated as part of our Beauty Reimagined, that we are moving where the consumer is moving.
Stéphane de La Faverie: So, we are really on the right path, you know, Dara, to just, like, you know, being able to just, like, you know, make this move and to be less and less dependent. Now, I want to be very clear, the department store remain a very important and strategic channel for some of our brands, and we are working with our partners, all the way from, like, you know, Macy's to Bloomingdale's to, like, you know, even Saks, in this moment in time, to just make sure that we capture, you know, the consumer. We have very strong position, often leading position in these department stores, and we need to just protect it. But at the same time, we are clearly stated as part of our Beauty Reimagined, that we are moving where the consumer is moving.
Speaker #1: brand unique proposition , Unique , environment . So we are really on the right in . You path know , to just like , you know , being able to like , you know , make just this move to be less and less dependent .
Speaker #1: Now I and the very clear , department store remains a very important and strategic channel for some of our brands . And we are working with our partners way from all the Macy's to Bloomingdale's to like , even in this moment in time to just make sure that we capture , you know , the very consumer .
Speaker #1: strong , often position We have leading position in this department stores . And we need to just protect it . But at the same time , we are clearly stated as part of our reimagined that we are moving where the consumer is beauty moving .
Stéphane de La Faverie: There is, like, you know, no, no decision there. So, so I feel good. We have-- That's why we've been able to just, maintain our market share. And frankly, most of the volume growth that we have had and the gain in volume is coming from the high growth channels. A lot of this growth, it's not hard to just see that it's also coming from the high and very strong performance of The Ordinary that is in high double-digit growth in this market. That is 100% in high growth channel. And this is actually one of the strengths of being brand, from La Mer to The Ordinary, that are positioned in all these channels, being able to just capture the consumer where they are.
Stéphane de La Faverie: There is, like, you know, no, no decision there. So, so I feel good. We have-- That's why we've been able to just, maintain our market share. And frankly, most of the volume growth that we have had and the gain in volume is coming from the high growth channels. A lot of this growth, it's not hard to just see that it's also coming from the high and very strong performance of The Ordinary that is in high double-digit growth in this market. That is 100% in high growth channel. And this is actually one of the strengths of being brand, from La Mer to The Ordinary, that are positioned in all these channels, being able to just capture the consumer where they are.
Stéphane de La Faverie: There is, like, you know, no, no decision there. So, so I feel good. We have-- That's why we've been able to just, maintain our market share. And frankly, most of the volume growth that we have had and the gain in volume is coming from the high growth channels. A lot of this growth, it's not hard to just see that it's also coming from the high and very strong performance of The Ordinary that is in high double-digit growth in this market. That is 100% in high growth channel. And this is actually one of the strengths of being brand, from La Mer to The Ordinary, that are positioned in all these channels, being able to just capture the consumer where they are.
Stéphane de La Faverie: There is, like, you know, no, no decision there. So, so I feel good. We have-- That's why we've been able to just, maintain our market share. And frankly, most of the volume growth that we have had and the gain in volume is coming from the high growth channels. A lot of this growth, it's not hard to just see that it's also coming from the high and very strong performance of The Ordinary that is in high double-digit growth in this market. That is 100% in high growth channel. And this is actually one of the strengths of being brand, from La Mer to The Ordinary, that are positioned in all these channels, being able to just capture the consumer where they are.
Speaker #1: There is like no decision . There . So , so , so I feel good . We have . That's why able to we've been just maintain our market share frankly and , most of the volume growth that we and the in gain have had volume is coming from the high growth channels , a lot , it's not hard growth to just see that it's also coming from the high and very performance of strong the ordinary that in high double digit growth in this market .
Speaker #1: That is 100% in high is channel growth . And this is actually one of the strengths having brand to the ordinary that are positioned in all these channels .
Speaker #1: That is 100% in high is channel growth . And this is actually one of the strengths having brand to the ordinary that are positioned in all these formula Being able to just capture consumer where the they are .
[Analyst]: Thanks, all.
[Analyst]: Thanks, all.
[Analyst]: Thanks, all.
Stéphane de La Faverie: Thanks, all.
Rainey Mancini: The next question comes from Chris Carey with Wells Fargo. Please go ahead.
Rainey Mancini: The next question comes from Chris Carey with Wells Fargo. Please go ahead.
Rainey Mancini: The next question comes from Chris Carey with Wells Fargo. Please go ahead.
Rainey Mancini: The next question comes from Chris Carey with Wells Fargo. Please go ahead.
Speaker #1: Thanks all .
Stéphane de La Faverie: Hey, Chris.
Stéphane de La Faverie: Hey, Chris.
Stéphane de La Faverie: Hey, Chris.
Stéphane de La Faverie: Hey, Chris.
Speaker #3: The question comes next from Carey with Wells Chris Fargo . Please go ahead .
[Analyst] (Wells Fargo): Hi, good morning, everyone.
[Analyst] (Wells Fargo): Hi, good morning, everyone.
[Analyst] (Wells Fargo): Hi, good morning, everyone.
Chris Carey: Hi, good morning, everyone.
Stéphane de La Faverie: Morning, Chris.
Stéphane de La Faverie: Morning, Chris.
Stéphane de La Faverie: Morning, Chris.
Stéphane de La Faverie: Morning, Chris.
[Analyst] (Wells Fargo): I wanted to ask about Europe. We've seen some stabilization into sequential improvement in the market. Can you just expand about, you know, state of the union and, and specifically comment on the UK and, and your outlook for the market in the medium term?
[Analyst] (Wells Fargo): I wanted to ask about Europe. We've seen some stabilization into sequential improvement in the market. Can you just expand about, you know, state of the union and, and specifically comment on the UK and, and your outlook for the market in the medium term?
[Analyst] (Wells Fargo): I wanted to ask about Europe. We've seen some stabilization into sequential improvement in the market. Can you just expand about, you know, state of the union and, and specifically comment on the UK and, and your outlook for the market in the medium term?
Chris Carey: I wanted to ask about Europe. We've seen some stabilization into sequential improvement in the market. Can you just expand about, you know, state of the union and, and specifically comment on the UK and, and your outlook for the market in the medium term?
Speaker #10: Hey , Chris .
Speaker #11: Hi . Good morning everyone . Chris , I wanted to ask about Europe . We've seen some stabilization in the sequential improvement in the market .
Stéphane de La Faverie: Yeah, no. Thank you, Chris. Thank you for noticing the sequential improvement. Europe is a tale of multiple cities. You know, obviously, our region is UK, and I want to remind everybody, it's like, you know, Europe is the UK and is obviously the emerging market. So if I look at the sequential improvement that we are seeing in the total area, is really coming from the emerging market, but also from the UK, going back into positive territory into the last quarter. I've said it multiple times, the UK, we were actually not where we should have been. We are still have a lot of work to do, but at least we are moving in the right direction. Europe consumer sentiment is still very subdued.
Stéphane de La Faverie: Yeah, no. Thank you, Chris. Thank you for noticing the sequential improvement. Europe is a tale of multiple cities. You know, obviously, our region is UK, and I want to remind everybody, it's like, you know, Europe is the UK and is obviously the emerging market. So if I look at the sequential improvement that we are seeing in the total area, is really coming from the emerging market, but also from the UK, going back into positive territory into the last quarter. I've said it multiple times, the UK, we were actually not where we should have been. We are still have a lot of work to do, but at least we are moving in the right direction. Europe consumer sentiment is still very subdued.
Stéphane de La Faverie: Yeah, no. Thank you, Chris. Thank you for noticing the sequential improvement. Europe is a tale of multiple cities. You know, obviously, our region is UK, and I want to remind everybody, it's like, you know, Europe is the UK and is obviously the emerging market. So if I look at the sequential improvement that we are seeing in the total area, is really coming from the emerging market, but also from the UK, going back into positive territory into the last quarter. I've said it multiple times, the UK, we were actually not where we should have been. We are still have a lot of work to do, but at least we are moving in the right direction. Europe consumer sentiment is still very subdued.
Stéphane de La Faverie: Yeah, no. Thank you, Chris. Thank you for noticing the sequential improvement. Europe is a tale of multiple cities. You know, obviously, our region is UK, and I want to remind everybody, it's like, you know, Europe is the UK and is obviously the emerging market. So if I look at the sequential improvement that we are seeing in the total area, is really coming from the emerging market, but also from the UK, going back into positive territory into the last quarter. I've said it multiple times, the UK, we were actually not where we should have been. We are still have a lot of work to do, but at least we are moving in the right direction. Europe consumer sentiment is still very subdued.
Speaker #11: Can you just expand about State of the Union and, specifically, on the UK comment for the EMEA market in the medium term?
Speaker #1: Yeah , no , thank Chris you , . Thank you for noticing . The second the sequential improvement . Europe is a multiple You know , I cities .
Speaker #1: obviously our region is I want to UK . everybody in Europe is remind the UK and is obviously the emerging market . So if I look at the sequential improvement that seeing we are the total area is really coming emerging markets , but for from the from the going into back into positive territory , into last quarter .
Speaker #1: I've said multiple it times , the U.K. , we actually not where we should have been . We have a work to do , still but at lot of least we are are the right direction .
Stéphane de La Faverie: We've seen a lot of challenges in France, in Germany, to name, like, you know, a few markets, but at the same time, actually really strong performance in markets like Spain or Italy, where we are gaining share in fragrances. And, you know, this region of the world is highly penetrated in the category of perfume, so it's very good for us to be able to demonstrate that we are able to just gain market share in this category. So we have a lot of work to do. I'm actually pleased with the beginning of momentum that we are getting into the UK, and many of the playbook that we've used in the US, we are applying to the UK. We've moved some of our brands into the Amazon platform in the UK. We are rationalizing distribution. We are accelerating the work we are doing with specialty multi.
Stéphane de La Faverie: We've seen a lot of challenges in France, in Germany, to name, like, you know, a few markets, but at the same time, actually really strong performance in markets like Spain or Italy, where we are gaining share in fragrances. And, you know, this region of the world is highly penetrated in the category of perfume, so it's very good for us to be able to demonstrate that we are able to just gain market share in this category. So we have a lot of work to do. I'm actually pleased with the beginning of momentum that we are getting into the UK, and many of the playbook that we've used in the US, we are applying to the UK. We've moved some of our brands into the Amazon platform in the UK. We are rationalizing distribution. We are accelerating the work we are doing with specialty multi.
Stéphane de La Faverie: We've seen a lot of challenges in France, in Germany, to name, like, you know, a few markets, but at the same time, actually really strong performance in markets like Spain or Italy, where we are gaining share in fragrances. And, you know, this region of the world is highly penetrated in the category of perfume, so it's very good for us to be able to demonstrate that we are able to just gain market share in this category. So we have a lot of work to do. I'm actually pleased with the beginning of momentum that we are getting into the UK, and many of the playbook that we've used in the US, we are applying to the UK. We've moved some of our brands into the Amazon platform in the UK. We are rationalizing distribution. We are accelerating the work we are doing with specialty multi.
Stéphane de La Faverie: We've seen a lot of challenges in France, in Germany, to name, like, you know, a few markets, but at the same time, actually really strong performance in markets like Spain or Italy, where we are gaining share in fragrances. And, you know, this region of the world is highly penetrated in the category of perfume, so it's very good for us to be able to demonstrate that we are able to just gain market share in this category. So we have a lot of work to do. I'm actually pleased with the beginning of momentum that we are getting into the UK, and many of the playbook that we've used in the US, we are applying to the UK. We've moved some of our brands into the Amazon platform in the UK. We are rationalizing distribution. We are accelerating the work we are doing with specialty multi.
Speaker #1: . Consumer Europe sentiment is still subdued . We've very seen a lot of challenges in France , in Germany to few markets , but at the same time actually really strong performance in markets a Spain or Italy , where we are gaining share in .
Speaker #1: And , this , France's you know , world is highly penetrated in the category of of the very good to be for us able to demonstrate that we are able this region to just in this market share category .
Speaker #1: So we have a gain lot of work to do . I'm actually with the of beginning momentum pleased that we are getting into the U.K.
Speaker #1: , and many playbook we've of the that used in the US , we are the U.K. we've some of our moved brands into the Amazon applying to U.K.
Stéphane de La Faverie: We've had really great support and great performance at Sephora UK. Obviously, like, you know, Boots, our historical partner, to name a few. So great, great momentum. And frankly, where I am the most excited, based on the new organization we've put in place, are the emerging markets. Our priority emerging market, they developed double-digit growth into the quarter, which is a sequential improvement, and it's driven by Turkey, by Middle East, by Thailand, and even mid-single-digit in India. That is such a very strategic market for us. So I think it's a tell, of, Chris, of so many different cities, and stories, sorry, like, you know, about, like, you know, this very complex region. But again, it's moving in the right direction. More work to do, but the team is laser focused on activating with excellence all the launches.
Stéphane de La Faverie: We've had really great support and great performance at Sephora UK. Obviously, like, you know, Boots, our historical partner, to name a few. So great, great momentum. And frankly, where I am the most excited, based on the new organization we've put in place, are the emerging markets. Our priority emerging market, they developed double-digit growth into the quarter, which is a sequential improvement, and it's driven by Turkey, by Middle East, by Thailand, and even mid-single-digit in India. That is such a very strategic market for us. So I think it's a tell, of, Chris, of so many different cities, and stories, sorry, like, you know, about, like, you know, this very complex region. But again, it's moving in the right direction. More work to do, but the team is laser focused on activating with excellence all the launches.
Stéphane de La Faverie: We've had really great support and great performance at Sephora UK. Obviously, like, you know, Boots, our historical partner, to name a few. So great, great momentum. And frankly, where I am the most excited, based on the new organization we've put in place, are the emerging markets. Our priority emerging market, they developed double-digit growth into the quarter, which is a sequential improvement, and it's driven by Turkey, by Middle East, by Thailand, and even mid-single-digit in India. That is such a very strategic market for us. So I think it's a tell, of, Chris, of so many different cities, and stories, sorry, like, you know, about, like, you know, this very complex region. But again, it's moving in the right direction. More work to do, but the team is laser focused on activating with excellence all the launches.
Stéphane de La Faverie: We've had really great support and great performance at Sephora UK. Obviously, like, you know, Boots, our historical partner, to name a few. So great, great momentum. And frankly, where I am the most excited, based on the new organization we've put in place, are the emerging markets. Our priority emerging market, they developed double-digit growth into the quarter, which is a sequential improvement, and it's driven by Turkey, by Middle East, by Thailand, and even mid-single-digit in India. That is such a very strategic market for us. So I think it's a tell, of, Chris, of so many different cities, and stories, sorry, like, you know, about, like, you know, this very complex region. But again, it's moving in the right direction. More work to do, but the team is laser focused on activating with excellence all the launches.
Speaker #1: where , rationalizing platform in the distribution , we are accelerating the work we are doing Multi . We've had with really support and great at Sephora great U.K.
Speaker #1: obviously , like , you know , boots are specialty partner to name a few . great great So frankly where momentum and I am the most excited based on the new organization we've put in place are the emerging priority ?
Speaker #1: Emerging markets markets . Our digit growth into quarter , which is a sequential improvement , and it's driven by Middle Turkey , by East , by Thailand , and even mid single digit in India .
Speaker #1: That is such a very strategic market for us . So I a think it's tell . Of Chris of so many different cities and stories .
Speaker #1: Sorry . Like , you know about these very you know , complex region . But again it's moving in the in the right direction .
Stéphane de La Faverie: I think things from Clinique to Lauder innovation that are coming in the second half of this fiscal year are so important for this region. You know, Double Wear is the leading foundation in many of these markets, and we expect, you know, a lot of things from this launch and hopefully some continuous sequential improvement in this geography.
Stéphane de La Faverie: I think things from Clinique to Lauder innovation that are coming in the second half of this fiscal year are so important for this region. You know, Double Wear is the leading foundation in many of these markets, and we expect, you know, a lot of things from this launch and hopefully some continuous sequential improvement in this geography.
Stéphane de La Faverie: I think things from Clinique to Lauder innovation that are coming in the second half of this fiscal year are so important for this region. You know, Double Wear is the leading foundation in many of these markets, and we expect, you know, a lot of things from this launch and hopefully some continuous sequential improvement in this geography.
Stéphane de La Faverie: I think things from Clinique to Lauder innovation that are coming in the second half of this fiscal year are so important for this region. You know, Double Wear is the leading foundation in many of these markets, and we expect, you know, a lot of things from this launch and hopefully some continuous sequential improvement in this geography.
Speaker #1: More work to do . But the team is focused laser on activating with all the excellence And I launches . think things from cleaning to loader innovation that are coming in the this second half of year fiscal are so important for this region and double where is the leading foundation in many of these markets .
Speaker #1: And we you lot of know , a things from this launch and hopefully some sequential improvement , continuous sequential improvement in the in this geography .
Rainey Mancini: The next question comes from Peter Grom with UBS. Please go ahead.
Rainey Mancini: The next question comes from Peter Grom with UBS. Please go ahead.
Rainey Mancini: The next question comes from Peter Grom with UBS. Please go ahead.
Rainey Mancini: The next question comes from Peter Grom with UBS. Please go ahead.
[Analyst] (UBS): ... Great. Thank you. Good morning, everybody.
[Analyst] (UBS): ... Great. Thank you. Good morning, everybody.
[Analyst] (UBS): ... Great. Thank you. Good morning, everybody.
Peter Grom: ... Great. Thank you. Good morning, everybody.
Speaker #3: Next question comes from Graham with Peter UBS. Please go ahead.
Stéphane de La Faverie: Morning.
Stéphane de La Faverie: Morning.
Stéphane de La Faverie: Morning.
Stéphane de La Faverie: Morning.
[Analyst] (UBS): Hey, good morning. So I was hoping to just get a sense on kind of the top line trajectory in the back half of the year and just the expectation for higher growth in the fourth quarter versus the third quarter. Can you maybe frame the difference you would expect between the quarters? And I guess, as we think about the fourth quarter, are there still some of these disruptions or repositioning changes that will be impacting growth? And I ask this more in context around the exit rate and maybe how this should inform our view on the top line trajectory as we look out to 2027. Thanks.
[Analyst] (UBS): Hey, good morning. So I was hoping to just get a sense on kind of the top line trajectory in the back half of the year and just the expectation for higher growth in the fourth quarter versus the third quarter. Can you maybe frame the difference you would expect between the quarters? And I guess, as we think about the fourth quarter, are there still some of these disruptions or repositioning changes that will be impacting growth? And I ask this more in context around the exit rate and maybe how this should inform our view on the top line trajectory as we look out to 2027. Thanks.
[Analyst] (UBS): Hey, good morning. So I was hoping to just get a sense on kind of the top line trajectory in the back half of the year and just the expectation for higher growth in the fourth quarter versus the third quarter. Can you maybe frame the difference you would expect between the quarters? And I guess, as we think about the fourth quarter, are there still some of these disruptions or repositioning changes that will be impacting growth? And I ask this more in context around the exit rate and maybe how this should inform our view on the top line trajectory as we look out to 2027. Thanks.
Peter Grom: Hey, good morning. So I was hoping to just get a sense on kind of the top line trajectory in the back half of the year and just the expectation for higher growth in the fourth quarter versus the third quarter. Can you maybe frame the difference you would expect between the quarters? And I guess, as we think about the fourth quarter, are there still some of these disruptions or repositioning changes that will be impacting growth? And I ask this more in context around the exit rate and maybe how this should inform our view on the top line trajectory as we look out to 2027. Thanks.
Speaker #12: Great. Thank you. Good morning, everybody.
Speaker #12: Great . Thank you . Good morning everybody .
Speaker #6: Good Good
Speaker #6: morning .
Speaker #12: morning So I was hoping to just get a sense on kind of the top line half of And just the year . trajectory the expectation for higher in the fourth growth versus the quarter third quarter .
Speaker #12: morning So I was hoping to just get a sense on kind of the top line half of And just the year . trajectory the expectation for higher in the fourth growth versus the quarter in the back difference ?
Speaker #12: You the would expect maybe Can you between the quarters ? we think guess as about the fourth quarter . Are still some of these disruptions or repositioning changes that will be impacting growth ?
Speaker #12: And I and this I ask more in around context the exit rate and should our maybe view on the top line trajectory as we look out to 27 .
Akhil Shrivastava: Yeah, thanks. Thanks, Peter. So essentially, look, we had a strong first half, plus 3%. Right at the beginning of the year, we had telegraphed that we would have a back half in Asia, especially in both in China and Travel Retail, will be anniversary-ing more larger basis. So we had said that at the beginning of the year. It was a part of our guidance, which we had communicated. Now, to your point around back half, like Stéphane said, we expect to see continued mid-single growth in China or better, but some of this is the stimulus that the Chinese economy had, which is anniversary-ing. Our goal is to outperform that market, but we expect market itself to take a little bit of a backstep from the double-digit type growth we put together. That's one.
Akhil Shrivastava: Yeah, thanks. Thanks, Peter. So essentially, look, we had a strong first half, plus 3%. Right at the beginning of the year, we had telegraphed that we would have a back half in Asia, especially in both in China and Travel Retail, will be anniversary-ing more larger basis. So we had said that at the beginning of the year. It was a part of our guidance, which we had communicated. Now, to your point around back half, like Stéphane said, we expect to see continued mid-single growth in China or better, but some of this is the stimulus that the Chinese economy had, which is anniversary-ing. Our goal is to outperform that market, but we expect market itself to take a little bit of a backstep from the double-digit type growth we put together. That's one.
Akhil Shrivastava: Yeah, thanks. Thanks, Peter. So essentially, look, we had a strong first half, plus 3%. Right at the beginning of the year, we had telegraphed that we would have a back half in Asia, especially in both in China and Travel Retail, will be anniversary-ing more larger basis. So we had said that at the beginning of the year. It was a part of our guidance, which we had communicated. Now, to your point around back half, like Stéphane said, we expect to see continued mid-single growth in China or better, but some of this is the stimulus that the Chinese economy had, which is anniversary-ing. Our goal is to outperform that market, but we expect market itself to take a little bit of a backstep from the double-digit type growth we put together. That's one.
Akhil Shrivastava: Yeah, thanks. Thanks, Peter. So essentially, look, we had a strong first half, plus 3%. Right at the beginning of the year, we had telegraphed that we would have a back half in Asia, especially in both in China and Travel Retail, will be anniversary-ing more larger basis. So we had said that at the beginning of the year. It was a part of our guidance, which we had communicated. Now, to your point around back half, like Stéphane said, we expect to see continued mid-single growth in China or better, but some of this is the stimulus that the Chinese economy had, which is anniversary-ing. Our goal is to outperform that market, but we expect market itself to take a little bit of a backstep from the double-digit type growth we put together. That's one.
Speaker #12: Thanks .
Speaker #2: Yeah , thanks . Thanks , Peter . So look , we essentially , had a strong first half plus 3% right at the beginning of the year .
Speaker #2: We had telegraphed that we would have back half in Asia, especially in both China travel retail, and it will be on anniversary of larger bases.
Speaker #2: So we had more was a part of our will guidance which we had communicated . Now , to your point around half back , like Stefan said , we see expect to growth continued in mid-single China or better .
Speaker #2: but some But of this is the stimulus that the Chinese economy had , which is anniversary . Our goal is to outperform that market , but expect market itself to take a little we a back step from the from bit of the double digit type growth .
Akhil Shrivastava: Secondly, the other point is that when you look at our APAC and TR segment, you see that the largest base period was Q3. So we do see a little bit of that in the Q3 to Q4 phasing. And then, as we communicated, there is this transition, which Stéphane and I talked about, of retailers, which is not a longer term item, to your point around exit rates, but it's a transition where one retailer takes business from another. You have ordering transition that goes on. So these are the main things that impact slightly in the back half. Of course, as we exit the year, our expectation is that we had said beauty market would be 2 to 3 this year. That was including travel retail, which has been challenged.
Akhil Shrivastava: Secondly, the other point is that when you look at our APAC and TR segment, you see that the largest base period was Q3. So we do see a little bit of that in the Q3 to Q4 phasing. And then, as we communicated, there is this transition, which Stéphane and I talked about, of retailers, which is not a longer term item, to your point around exit rates, but it's a transition where one retailer takes business from another. You have ordering transition that goes on. So these are the main things that impact slightly in the back half. Of course, as we exit the year, our expectation is that we had said beauty market would be 2 to 3 this year. That was including travel retail, which has been challenged.
Akhil Shrivastava: Secondly, the other point is that when you look at our APAC and TR segment, you see that the largest base period was Q3. So we do see a little bit of that in the Q3 to Q4 phasing. And then, as we communicated, there is this transition, which Stéphane and I talked about, of retailers, which is not a longer term item, to your point around exit rates, but it's a transition where one retailer takes business from another. You have ordering transition that goes on. So these are the main things that impact slightly in the back half. Of course, as we exit the year, our expectation is that we had said beauty market would be 2 to 3 this year. That was including travel retail, which has been challenged.
Akhil Shrivastava: Secondly, the other point is that when you look at our APAC and TR segment, you see that the largest base period was Q3. So we do see a little bit of that in the Q3 to Q4 phasing. And then, as we communicated, there is this transition, which Stéphane and I talked about, of retailers, which is not a longer term item, to your point around exit rates, but it's a transition where one retailer takes business from another. You have ordering transition that goes on. So these are the main things that impact slightly in the back half. Of course, as we exit the year, our expectation is that we had said beauty market would be 2 to 3 this year. That was including travel retail, which has been challenged.
Speaker #2: We together . Secondly , the other point is that look at That's one . APAC and our TR segment , see that you the largest base put period quarter three .
Speaker #2: So we do see a little bit of that in the quarter three to quarter four . Phasing . And then as we communicated there is this transition which Stefan and I talked about of retailers , which a is not longer term item .
Speaker #2: To your point exit rates , but around where one retailer business from takes ordering transition that goes So these are the main that that impact it's a slightly in the back half .
Speaker #2: as we Of course , exit the year , our expectation is we had that beauty market would be year , that was 2 to 3 this said challenged as travel bases of period .
Akhil Shrivastava: As travel retail bases of that period, beauty market itself should be better, assuming other things remain the same in the West, and China continues to do mid-single. Our goal, our stated mission very clearly is, which we are demonstrating in China, US, and Japan, is that we want to start leading these markets in a very clear way, which we are already doing unquestionably in China, Japan, and parts of emerging markets. So, so I think that is basically what is underlying our back half guide, and then, of course, what you should expect going forward.
Akhil Shrivastava: As travel retail bases of that period, beauty market itself should be better, assuming other things remain the same in the West, and China continues to do mid-single. Our goal, our stated mission very clearly is, which we are demonstrating in China, US, and Japan, is that we want to start leading these markets in a very clear way, which we are already doing unquestionably in China, Japan, and parts of emerging markets. So, so I think that is basically what is underlying our back half guide, and then, of course, what you should expect going forward.
Akhil Shrivastava: As travel retail bases of that period, beauty market itself should be better, assuming other things remain the same in the West, and China continues to do mid-single. Our goal, our stated mission very clearly is, which we are demonstrating in China, US, and Japan, is that we want to start leading these markets in a very clear way, which we are already doing unquestionably in China, Japan, and parts of emerging markets. So, so I think that is basically what is underlying our back half guide, and then, of course, what you should expect going forward.
Akhil Shrivastava: As travel retail bases of that period, beauty market itself should be better, assuming other things remain the same in the West, and China continues to do mid-single. Our goal, our stated mission very clearly is, which we are demonstrating in China, US, and Japan, is that we want to start leading these markets in a very clear way, which we are already doing unquestionably in China, Japan, and parts of emerging markets. So, so I think that is basically what is underlying our back half guide, and then, of course, what you should expect going forward.
Speaker #2: retail Beauty market itself should be better , other things assuming the same in West and China continues to mid-single and then our goal , stated that China , in US , in Japan , is that we want to start leading markets in a very clear way , which we are these already doing China and , unquestionably , in Japan , in parts of emerging markets .
Stéphane de La Faverie: Yeah, Peter, I want to be very clear that there's no misunderstanding from anybody. We are going for the top end of the new guidance that we are giving, both in top line and bottom line for this fiscal year, okay? So that's very clear. That's the mission that we have. We're going for it. Obviously, we are giving ourself a range because of like, you know, volatility that we all have, you know, to manage.
Stéphane de La Faverie: Yeah, Peter, I want to be very clear that there's no misunderstanding from anybody. We are going for the top end of the new guidance that we are giving, both in top line and bottom line for this fiscal year, okay? So that's very clear. That's the mission that we have. We're going for it. Obviously, we are giving ourself a range because of like, you know, volatility that we all have, you know, to manage.
Stéphane de La Faverie: Yeah, Peter, I want to be very clear that there's no misunderstanding from anybody. We are going for the top end of the new guidance that we are giving, both in top line and bottom line for this fiscal year, okay? So that's very clear. That's the mission that we have. We're going for it. Obviously, we are giving ourself a range because of like, you know, volatility that we all have, you know, to manage.
Stéphane de La Faverie: Yeah, Peter, I want to be very clear that there's no misunderstanding from anybody. We are going for the top end of the new guidance that we are giving, both in top line and bottom line for this fiscal year, okay? So that's very clear. That's the mission that we have. We're going for it. Obviously, we are giving ourself a range because of like, you know, volatility that we all have, you know, to manage.
Speaker #2: So, so I— that is basically what is underlying our back half guide. And then, of course, what you should expect, think forward.
Speaker #1: Yeah . And Peter , I want to be very clear that there's no misunderstanding from anybody . We are going top for the of the new we are giving , both top line and bottom line for this fiscal year .
Speaker #1: Okay . So very clear . mission that's that we have . We're for it . going Obviously we are giving ourselves a range because of volatility that That's the know , to manage frankly .
Stéphane de La Faverie: You know, frankly, being able to deliver this very strong first six months of the year with the amount of volatility that we have had and consumer sentiment being subdued, I think I'm really proud, frankly, of what our team has done, and I think it's showing the momentum that we have on Beauty Reimagined, and I think should give you the confidence that, on the long term, we are in the right trajectory. We are accelerating, we are doing the right thing, and we are rebalancing also our growth between geographies, between brands, and frankly, we're putting the one operating ecosystem in place for us to just be much more agile.
Stéphane de La Faverie: You know, frankly, being able to deliver this very strong first six months of the year with the amount of volatility that we have had and consumer sentiment being subdued, I think I'm really proud, frankly, of what our team has done, and I think it's showing the momentum that we have on Beauty Reimagined, and I think should give you the confidence that, on the long term, we are in the right trajectory. We are accelerating, we are doing the right thing, and we are rebalancing also our growth between geographies, between brands, and frankly, we're putting the one operating ecosystem in place for us to just be much more agile.
Stéphane de La Faverie: You know, frankly, being able to deliver this very strong first six months of the year with the amount of volatility that we have had and consumer sentiment being subdued, I think I'm really proud, frankly, of what our team has done, and I think it's showing the momentum that we have on Beauty Reimagined, and I think should give you the confidence that, on the long term, we are in the right trajectory. We are accelerating, we are doing the right thing, and we are rebalancing also our growth between geographies, between brands, and frankly, we're putting the one operating ecosystem in place for us to just be much more agile.
Stéphane de La Faverie: You know, frankly, being able to deliver this very strong first six months of the year with the amount of volatility that we have had and consumer sentiment being subdued, I think I'm really proud, frankly, of what our team has done, and I think it's showing the momentum that we have on Beauty Reimagined, and I think should give you the confidence that, on the long term, we are in the right trajectory. We are accelerating, we are doing the right thing, and we are rebalancing also our growth between geographies, between brands, and frankly, we're putting the one operating ecosystem in place for us to just be much more agile.
Speaker #1: all And you know being deliver this guidance that very first six months of the year with the strong amount of that we and have had consumer sentiment being volatility I really frankly , of what think I'm has done .
Speaker #1: And I think it's showing the momentum that we have on beauty . proud , Reimagine . And I think should give you the confidence that on the long term , we are in the right our team trajectory .
Speaker #1: We are are doing accelerating , we we are thing , and rebalancing the right our also , between growth between brands . And frankly , geographies , the we're putting one operating ecosystem in place for just be us to much more in this .
Stéphane de La Faverie: In this midst of time, we are refreshing our long-range plan, and you can expect us, when we come at the end of the fiscal year in August, that we will give you more visibility of our mid- to long-term growth. But I've also said it, and I'll repeat it today, our objective past this transition year is to gain market share. That's what we are doing, this transformation. This is why we are diversifying our goal. This is why we're simplifying the ways of working. We've brought a lot of new partner in the house today. We've talked about Accenture. We've talked in the past about Shopify.
Stéphane de La Faverie: In this midst of time, we are refreshing our long-range plan, and you can expect us, when we come at the end of the fiscal year in August, that we will give you more visibility of our mid- to long-term growth. But I've also said it, and I'll repeat it today, our objective past this transition year is to gain market share. That's what we are doing, this transformation. This is why we are diversifying our goal. This is why we're simplifying the ways of working. We've brought a lot of new partner in the house today. We've talked about Accenture. We've talked in the past about Shopify.
Stéphane de La Faverie: In this midst of time, we are refreshing our long-range plan, and you can expect us, when we come at the end of the fiscal year in August, that we will give you more visibility of our mid- to long-term growth. But I've also said it, and I'll repeat it today, our objective past this transition year is to gain market share. That's what we are doing, this transformation. This is why we are diversifying our goal. This is why we're simplifying the ways of working. We've brought a lot of new partner in the house today. We've talked about Accenture. We've talked in the past about Shopify.
Stéphane de La Faverie: In this midst of time, we are refreshing our long-range plan, and you can expect us, when we come at the end of the fiscal year in August, that we will give you more visibility of our mid- to long-term growth. But I've also said it, and I'll repeat it today, our objective past this transition year is to gain market share. That's what we are doing, this transformation. This is why we are diversifying our goal. This is why we're simplifying the ways of working. We've brought a lot of new partner in the house today. We've talked about Accenture. We've talked in the past about Shopify.
Speaker #1: midst of we are time , refreshing And our range long plan . And you can expect agile us when at the end of the year in fiscal August , that will give you we more we come visibility of mid to long term growth .
Speaker #1: But I've also repeated it, and it's our objective today. Our goal this transition year is to gain market share. That's what we're doing.
Speaker #1: This what we are is transformation . This why we are diversifying This growth . are is why we ways of working . our simplifying the We've brought a lot of partners new We've in-house today .
Stéphane de La Faverie: We have great partners like Google, Microsoft, and so many others that are helping us to really act with speed and agility, and let alone all the PRGP, where the savings will continue to flow through this year and into next year and create a lot more efficiency. So I feel really good about what we've done in this first year of Beauty Reimagined. The momentum in the first half is strong. Even the retail sales, ex Travel Retail at +4, leaders believe that we are gaining market share in many, many markets, as demonstrated in China, in the US, in volume, and so on and so forth. So I feel good. We are going for it.
Stéphane de La Faverie: We have great partners like Google, Microsoft, and so many others that are helping us to really act with speed and agility, and let alone all the PRGP, where the savings will continue to flow through this year and into next year and create a lot more efficiency. So I feel really good about what we've done in this first year of Beauty Reimagined. The momentum in the first half is strong. Even the retail sales, ex Travel Retail at +4, leaders believe that we are gaining market share in many, many markets, as demonstrated in China, in the US, in volume, and so on and so forth. So I feel good. We are going for it.
Stéphane de La Faverie: We have great partners like Google, Microsoft, and so many others that are helping us to really act with speed and agility, and let alone all the PRGP, where the savings will continue to flow through this year and into next year and create a lot more efficiency. So I feel really good about what we've done in this first year of Beauty Reimagined. The momentum in the first half is strong. Even the retail sales, ex Travel Retail at +4, leaders believe that we are gaining market share in many, many markets, as demonstrated in China, in the US, in volume, and so on and so forth. So I feel good. We are going for it.
Stéphane de La Faverie: We have great partners like Google, Microsoft, and so many others that are helping us to really act with speed and agility, and let alone all the PRGP, where the savings will continue to flow through this year and into next year and create a lot more efficiency. So I feel really good about what we've done in this first year of Beauty Reimagined. The momentum in the first half is strong. Even the retail sales, ex Travel Retail at +4, leaders believe that we are gaining market share in many, many markets, as demonstrated in China, in the US, in volume, and so on and so forth. So I feel good. We are going for it.
Speaker #1: Accenture . We've talked about about talked in the past Shopify . partners great like Google and so many others that helping us are really with speed act and agility and let alone all to prep where the the savings continue to flow through year .
Speaker #1: into And next year and lot more efficiency . create a , Microsoft , So I really feel good about what we've done in first year of beauty the momentum in the first half strong is .
Speaker #1: retail the sales Even travel ex at We have retail gaining that we are market believe share in many , demonstrated in China US , , in the in volume and so forth .
Speaker #1: retail the sales Even travel ex at We have retail gaining that we are market believe share in many , demonstrated in China US , , in the in volume and so forth . and so on I So good we are going markets as going for the top of the guidance the , and that's mission that every single of the this the companies for we're going today .
Stéphane de La Faverie: We're going for the top of the guidance, and that's the mission that we, every single of the employees of the Estée Lauder Companies have today, and we're going for it.
Stéphane de La Faverie: We're going for the top of the guidance, and that's the mission that we, every single of the employees of the Estée Lauder Companies have today, and we're going for it.
Stéphane de La Faverie: We're going for the top of the guidance, and that's the mission that we, every single of the employees of the Estée Lauder Companies have today, and we're going for it.
Stéphane de La Faverie: We're going for the top of the guidance, and that's the mission that we, every single of the employees of the Estée Lauder Companies have today, and we're going for it.
Rainey Mancini: That concludes today's question and answer session. If you were unable to join the entire webcast, a playback will be available at 1:00PM Eastern today through 19 February. Please visit the investors section of the company's website to view a replay of the webcast. That concludes today's Estée Lauder conference call. I would just like to thank you all for your participation, and wish you all a good day.
Rainey Mancini: That concludes today's question and answer session. If you were unable to join the entire webcast, a playback will be available at 1:00PM Eastern today through 19 February. Please visit the investors section of the company's website to view a replay of the webcast. That concludes today's Estée Lauder conference call. I would just like to thank you all for your participation, and wish you all a good day.
Rainey Mancini: That concludes today's question and answer session. If you were unable to join the entire webcast, a playback will be available at 1:00PM Eastern today through 19 February. Please visit the investors section of the company's website to view a replay of the webcast. That concludes today's Estée Lauder conference call. I would just like to thank you all for your participation, and wish you all a good day.
Rainey Mancini: That concludes today's question and answer session. If you were unable to join the entire webcast, a playback will be available at 1:00PM Eastern today through 19 February. Please visit the investors section of the company's website to view a replay of the webcast. That concludes today's Estée Lauder conference call. I would just like to thank you all for your participation, and wish you all a good day.
Speaker #1: have And it
Speaker #3: That
Speaker #3: and answer question session today's . If you were
Speaker #3: unable to join the entire webcast , . a playback will
Speaker #3: unable to join the entire webcast , . a playback will we available today through 1 p.m. be February 19th . visit the investor the website to view replay of the a webcast concludes Estee today's that conference company's Lauder call would like to thank you all section of .