Coty FY2026 Q4 Earnings Call - Transition Year Focus on Sell-Out and Gucci Restructuring

Chelsea, Conference Operator, Coty: Good morning and good afternoon, everyone. My name is Chelsea and I will be your conference operator today. At this time, I would like to welcome everyone to Coty’s fourth quarter fiscal 2026 question and answer conference call. As a reminder, this conference call is being recorded today, August 20, 2026, at 8:00 A.M. Eastern Time or 2:00 P.M. Central European Time. Please note that on August 19, at approximately 4:30 P.M. Eastern Time or 10:30 P.M. Central European Time, Coty issued a press release and prepared remarks webcast, which can be found on its investor relations website. On today’s call are Markus Strobel, Executive Chairman of the Board and Interim Chief Executive Officer, and Laurent Mercier, Chief Financial Officer. I would like to remind you that many of the comments today may contain forward-looking statements.

Please refer to Coty’s earnings release and the reports filed with the SEC where the company lists factors that could cause actual results to differ materially from those forward-looking statements. In addition, except where noted, the discussion of Coty’s financial results and Coty’s expectations reflect certain adjustments as specified in the non-GAAP financial measures section of the company’s release. With that, we will now open the line for questions. If you would like to ask a question at this time, please press star one on your telephone keypad. To remove yourself from the queue, you may press star two. Once again, that is star one to ask a question. Our first question will come from Filippo Falorni with Citi. Please go ahead.

Filippo Falorni, Analyst, Citi: Hi, good morning, everyone. Good afternoon.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Hi, Filippo.

Filippo Falorni, Analyst, Citi: Hi. I wanted to ask a bit about fiscal 2027. Obviously, you characterize the transition here, and the framework you provided in the prepared remarks was helpful. I would love to hear a bit more of your KPI internally that you are looking to achieve throughout this transition year. Maybe talk a little bit more about the potential sources of upside, both from a top line and profit standpoint, and any risks that you see as you think about this transition year. Thank you.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Okay. Yeah, Filippo, you probably know that in the last couple of quarters, our sell-out has been trailing below the category. Okay? Obviously, that has led to lower sell-in and has led to all some of the problems that we had. Our objective is to drive sell-out and to drive market share. This is new thinking for the organization. The organization was traditionally sell-in focused, and it takes some time to make this adaptation. We believe as we outlined in the first quarter, we probably see a similar trend that we have seen in the last two quarters, but then we want to sequentially improve that. We have some strong incremental innovation coming up. We have a more disciplined approach to spending. We are focusing fewer bets. We believe that this will, over time, decrease the sell-out gap versus the market.

Now, the question is how long this will take. I cannot answer you that today. If this catches on faster, that will be upside. If this takes longer, then we have got to manage. So far, we have tried to give a 50/50 balanced picture on that. It all depends on how fast can we drive sell-out, how fast can we drive market share. That is an important KPI for us. We have even changed all our bonus systems for fiscal 2027, where market share sellout is now a very important KPI, and that has not been the case before. We believe the whole organization will be focused on this, and we hopefully see some upside here. This is about sales. When we talk about EBITDA, obviously, reducing the decline rate we have seen in the last two quarters. Is there upside?

Yeah, that depends on how the Middle East is going to shape up, how oil prices are going to shape up. We have built in $20 million-$30 million of cost for an oil price between $90 and $100. This is getting better, might be getting a little bit better. Also, we are still waiting for a potential tariff refund, which is about $30 million that comes or comes not, depending when it comes. There is some upside. Of course, we keep working on future productivity and the cost savings effort on which we have delivered quite a good result in the last couple of years. That is my balanced view on this.

Filippo Falorni, Analyst, Citi: Great. Thank you very much.

Chelsea, Conference Operator, Coty: Thank you. Our next question will come from Javier Escalante with Evercore ISI. Please go ahead.

Javier Escalante, Analyst, Evercore ISI: Good morning, everyone, and Laurent, thank you very much for all the help. You are going to be missed. I have two questions on the presentation. One is if you can talk about what has happened in EMEA, excluding the Middle East. I believe that most of it is consumer brands in Europe, but if you can talk about why there is no improvement there, that would be helpful. Particularly on the consumer side, if you can walk us through what is the portfolio there beyond the core brands that you always talk about, more like the smaller brands, what is happening there. Moving into the U.S. is the second question. You made some comments about SKU reduction, and also there is some comments about capital spending related to marketing equipment.

If you can talk about whether that pertains to the U.S., what does it mean for COVERGIRL, and if you can give us an update in terms of shelf reset heading into the fall. Thank you.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Okay, let me just unpack this. Probably for your first question, more European brands versus U.S. brands. We have started our Color the Future performance improvement program in the consumer business, basically in January, and that’s a version of Coty.Curated for consumer. We have started this program in the U.S. We have started all the interventions. We have been making a simpler lineup, more powerful innovation, but fewer SKUs that we ship in and all these kind of things on, since it’s U.S., mostly on brands like COVERGIRL and Sally Hansen. We see great traction. Both brands have reduced the gap versus the market substantially over the year. Sally Hansen is now even growing ahead of the market, even in value. We have been positively surprised by how quickly the interventions take on.

We also believe these interventions will help our EBITDA over time because part of our EBITDA decline on consumer beauty is returns, obsolescence. Because when the innovation is not selling, you get it back in the U.S. straight. If you’re selling less, more powerful things, and we have fewer SKUs on the shelf that are turning much more quickly, we’re going to have less excess and obsolescence as we move along. This is a very big part of our EBITDA building plan in consumer beauty. Having said that, we’ve started this program in the U.S., and now we are rolling it out to the rest of Europe. The last country we rolled out is the U.K. We see some good traction now on Rimmel, especially in the last month, where Rimmel is catching up with the category finally.

As a final step, in the next few weeks or months, we’re going to roll this out to our mostly European brands. These are brands like Max Factor and Bourjois, that are mostly prevalent in Central Europe and in parts of Western Europe. We have not implemented these interventions there yet, but they are about to come. I’m expecting that we’re going to see some improvements there as well. Coming back to the SKUs and the CapEx, you know that CapEx in makeup, in cosmetics, is very expensive. We’ve done a lot of improvements with procurement and in the work with our vendors to have great quality installations but at a lower price. Our CapEx is going down. When we look at the 20% SKU reduction on shelf, we don’t believe that it’s going to have any material impact on our sales.

In the contrary, that’s going to leave the space for the fast-turning SKUs. Because in the past, with an innovation not working, you’re putting a slow turner in, and the fast turner goes out of the shelf. That doesn’t make much sense. We’re very, very deliberate about that. We believe we’re going to see a continuous uptick in our consumer business over the next couple of months.

Javier Escalante, Analyst, Evercore ISI: Just to double-click, if you can comment on the shelf resets getting into the fall.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah.

Javier Escalante, Analyst, Evercore ISI: Do you think that the total facings to the consumer, in the U.S. for COVERGIRL and Sally Hansen is going to hold up, or how is it going to change?

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: No.

Javier Escalante, Analyst, Evercore ISI: The color in Europe was interesting, but I am more interested in the brands that you do not talk about. You used to have brands, at least that I remember, something called Astor, Manhattan, the brands that you do not talk-

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Oh, okay.

Javier Escalante, Analyst, Evercore ISI: what is happening to them? Thank you.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Oh, I am happily talking about them. I am coming back to your first question in a second. Happily talking about them. Astor, we still have that?

Javier Escalante, Analyst, Evercore ISI: Yeah.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: I do not think so. Astor.

Javier Escalante, Analyst, Evercore ISI: The brands that you.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah

Javier Escalante, Analyst, Evercore ISI: rarely talk about. Thank you.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah. Manhattan is basically the equivalent of Rimmel in Germany. Okay. It is the same portfolio, they are just called a Rimmel brand in Germany, Manhattan, but for historical reasons. In Europe, again, Manhattan, Max Factor, Bourjois, are all brands on which we are going to bring the interventions now. We have not done it on these brands in Europe yet. Okay? But it is coming. So we hopefully can replicate the U.S. success model. When it comes to shelf space and shelf resets, we have mostly managed to have stable shelf space. Shelf space is always under threat if your sell-out is not great. But the improvements we have seen in Q4, this is the time when shelf resets are being decided. We have lost a bit, we have gained a bit, but overall, we should be stable.

We do not see a big risk from losing shelf space or anything like this for the time being.

Chelsea, Conference Operator, Coty: Thank you. Our next question will come from Anna Lizzul with Bank of America. Please go ahead.

Anna Lizzul, Analyst, Bank of America: Hi. Good morning. Thank you so much for the question. Good afternoon as well.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Hi.

Anna Lizzul, Analyst, Bank of America: I was wondering if you could comment on the promotional environment here. You mentioned in FY 2026, it had been elevated throughout the year. I am just wondering as well, in terms of competitors’ actions here, we have seen some pricing reductions being taken and then pricing being elevated again. I am curious for your take on some of the competitor actions in the mass side in particular. Thanks so much.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah. On pricing, things are going a little bit back and forth. We have seen in Prestige, we have seen a lot of pricing competition in the key holiday season from October to December, but it has abated a bit ever since then, which actually is good. In Consumer, I think what all the companies are doing now, we have been doing, said, "Okay, instead of going up in price or down or being broad-based, but being much more searchable." Okay, what type of distances, what type of SKU can I support a higher price, and what kind of SKUs I cannot support a higher price, right? So that differentiation is, I think, going to help stabilize this pricing and promotion environment a little bit in the next couple of months.

Anna Lizzul, Analyst, Bank of America: Great. In terms of your strategic review for the Consumer Beauty business by the end of calendar 2026, is that really a hard deadline? Is that something you are working toward, but there is room to see if there is maybe not an agreement made by that time? I am curious on just how flexible you are there. Thank you.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah. I know I’m sticking my neck out on this 2026 thing. It is our very strong aspiration to get it done by then. At the end of the day, if the results are 10 times better, if we have another month, then yeah, of course, we would do that. But it is our intent to finish this by calendar 2026.

Chelsea, Conference Operator, Coty: Thank you. Our next question will come from Susan Anderson with Canaccord Genuity. Please go ahead.

Susan Anderson, Analyst, Canaccord Genuity: Hi. Good morning. Thanks for taking my questions. I guess maybe just to dig in a little deeper on the Consumer Beauty business, particularly the improvement you saw in the U.S. with COVERGIRL and Sally Hansen. I guess I am just curious, is that being driven by the better marketing, sharper price points? Are you guys being more promotional there or the new innovation? I guess maybe just a little bit of color on what is driving that, and then just the performance internationally versus the U.S. Thanks.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah. I think it is actually, on the contrary, it is less driven by promotion. It is more driven by equity building advertising, because on brands like COVERGIRL or Sally Hansen, we have been in and out of advertising over the years. But we have made a choice to concentrate our funds in really equity building advertising. We are back on television with COVERGIRL. As mentioned, you know that we are targeting Gen X. Gen X still watches television quite a lot. We are back nationally on air, and we are focusing our efforts on our two biggest franchises, which is Simply Ageless and LashBlast, and really focusing on the core. On COVERGIRL, it has really helped us dramatically to improve the sellout gap versus the category, and we are getting now very close. Same thing on Sally Hansen.

We are back on national advertising on Sally Hansen in the nail care category, coupled with some very good innovation, like our Insta-Dri innovation has found an extremely good reception. If I have to sum it up, I think where we are going with Coty.Curated and Color the Future, it is much more putting the money where we have a return and where we also have long-term equity building to drive our brands and drive our core franchises versus competing everywhere and in every SKU and so on. I would say focus and focus spending.

Susan Anderson, Analyst, Canaccord Genuity: Okay, good. Then just the performance internationally versus U.S., because I think you noted that.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah

Susan Anderson, Analyst, Canaccord Genuity: Mass body and skincare helped to drive the growth. I guess was that the Brazilian business as well? Thanks.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah. Brazil is also back to growth, which is where the skincare part comes from. Brazil had a bit of a wobble at the beginning of the year, but they are doing well now. They are back. The market is growing. We are growing, and we are about to grow share again in Brazil. That is going in the right direction. Again, Europe, I think I have mentioned on the question before, where we are not as far advanced yet in the implementation as we were in the U.S., but we see the U.S. working, and obviously we are going to replicate this in Europe. Good initial response on Rimmel in the U.K.

Chelsea, Conference Operator, Coty: Thank you. Our next question will come from Stephen Powers with Deutsche Bank. Please go ahead.

Stephen Powers, Analyst, Deutsche Bank: Great. Thank you very much. Laurent, thanks from me as well, for your help over the years. Markus, I wanted to ask, you explicitly stated the goal of returning the underlying portfolio, excluding Gucci, to growth in FY 2028. There are a lot of balls in the air as we think about FY 2027, but I guess, I just wanted to get a better sense of your confidence around that goal and I guess, the key building blocks, the most critical assumptions, or the things that we should be looking for to develop over the course of 2027 to be able to hit that target.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah, I think there are, Steve, two or three points that are extremely important. One of them is for us, really the focus on our big brand franchises. Okay, and the role that every brand franchise plays in our portfolio. For example, our big global brands, Burberry, Hugo Boss, there’s no excuse if you don’t grow. So we’ve got to make these products grow. For us, one of the most important things, apart from focusing and spending the money on them, is to create more incremental innovation that creates a halo effect on the total business. We have not done that as successfully last year because our innovation has been performing well, but it was not incremental enough. It didn’t create a halo. I’ll give you one example on Hugo Boss, where we had a very good launch with BOSS Bottled Beyond.

I mean, one of the top two male launches of the year, doing very well, building share in the U.S., but it hasn’t driven up the total franchise. What we’re just in the process of doing, we have just launched, starting in travel retail, BOSS Bottled Beyond for Her, women, right? So we are creating a female business for Hugo Boss, which obviously by definition is going to be incremental. We have constructed it in a way and tested it and confirmed it in a way that every dollar that we spend on the female campaign has a halo effect on the male campaign as well. So, that’s what we’re trying, the way we look at our big brands and our innovation, to construct innovation better for incrementality and also better for the total halo effect. Then, playing our portfolio where the strengths are.

Again, big global brands, and then we have probably more regional brands at the moment in Marc Jacobs, where we are very strong in English-speaking countries, U.S., U.K., even Australia, where we have actually double-digit fragrance growth in the last six months. Now we are bringing the makeup, the cosmetics line on top. We are concentrating it on the markets where we can win with this proposition. It is all about focused investment, having a right to win, and incremental innovation that creates a halo effect.

Stephen Powers, Analyst, Deutsche Bank: Yes, very good. Okay. Thank you very much. If I could ask a follow-up.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah.

Stephen Powers, Analyst, Deutsche Bank: You mentioned efforts underway to develop plans to moderate the sales and profit impacts as we look to FY 2028 from the Gucci departure. I guess, how much of that planning is dependent on the rest of the portfolio resuming growth-

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah

Stephen Powers, Analyst, Deutsche Bank: as we just talked about, versus you being able to actually restructure some costs specifically to mitigate the financial impact through restructuring? How much is growth oriented-

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah

Stephen Powers, Analyst, Deutsche Bank: versus cost out, if that makes sense?

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah, what we are trying to do, I think on this one, we are trying to go with belt and suspenders. We are going to grow these brands. That is a big part of the building blocks. And we are also bringing in new brands like Swarovski, Etro, next year. But we want to make sure, and this is our intention, that our cost savings program, restructuring program alone can give it a gas. That is our intention, okay? Because if we achieve that and we bring the growth on top of our big global brands, I think then we are going to be in very good shape, right? So it is a belt and suspender approach, and hopefully all these activities are going to add up to more than what we need. Because in the end, you always get a little bit less, and then it is going to be good.

That is our approach. You will hear more about our restructuring program in the next few months, because we also still working on the study for the consumer business. There are a lot of interdependencies. We just want to come to the market once and say, "This is it. This is what we are going to do," and then it is execution.

Chelsea, Conference Operator, Coty: Thank you. Our next question will come from Olivia Tong with Raymond James. Please go ahead.

Olivia Tong, Analyst, Raymond James: Great. Thanks. I am not sure how much you can share, but can you give us an update on the strategic review of Consumer Beauty that you expect to be done by calendar year-end? In the past, you had flagged that Brazil would be a cleaner exit, potentially, versus the U.S. business.

Just a little bit of more color there would be great. Thank you.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah. We mentioned in the past that obviously Brazil is very ring-fenced, and it would be easier in isolation, but we are not looking for necessarily the clean and easy. We are looking for the best solution that creates the most value for us. So we keep working on the strategic review as a total, including everything in consumer.

Olivia Tong, Analyst, Raymond James: Got it. Thanks. Then, you just mentioned to Steve about the plan with respect to Gucci and absorbing the incremental cost, and how you will look at cost overall. But now that we know that it is a low double-digit percentage of sales with healthy profit, can you give us a sense on some of the specific actions you are going to take to minimize the overhead challenges? Presumably, some of that cost may go to L’Oréal, but maybe not very much. I understand that you will be satisfying inventory for a period of time, but just given that they probably do not need a ton of hand-holding in this category beyond the initial inventory, what can be done?

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah. I would imagine they don’t take too much hand-holding. You probably got that right. I think first of all, we are super happy with the deals we made with Kering, because it was our objective, and we did it on our terms. It was really our objective to get full compensation of a year of profit and cash. We wanted to get funds that help us to pay down debt, and we wanted to also get some money back after the restructuring, plus we wanted to solve the inventory question. All of these things have been addressed. That is why we are happy with that deal. When it comes to our fixed cost saving, there is obviously quite a chunk of money in allocated overhead. Okay?

Because the way you have to look at the business is that, in Prestige, we have a scaled R&D organization, we have a scaled manufacturing, distribution organization, and we also have our central lead team, all the corporate functions, they are all working for Prestige. With a brand in the low double-digit teams, that is quite a sizable money. We are looking at a very serious restructuring program that will encompass our go-to-market setup, manufacturing and distribution network, a continuous delayering of the organization, which we have started anyway to get to faster decision-making, more agility, and of course, also a right sizing of our central organization, to reflect, initially, lower sales.

Chelsea, Conference Operator, Coty: Thank you. Our next question will come from Sydney Wagner with Jefferies. Please go ahead.

Sydney Wagner, Analyst, Jefferies: Hi, thanks for taking our question. You have now built market share into the FY 2027 incentive structure to help reinforce the sellout culture. How are you thinking about making sure that doesn’t inadvertently encourage chasing volume promotionally in a market that is already quite competitive? Just curious what guardrails you have in place so the comp structure and the margin discipline stay aligned. Thank you.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Yeah. Our total bonus structure, which I am not going to go into the details, probably it will take me half an hour to explain this, has market share as a big KPI, but there is also a sales component, and there is an EBITDA component. There is a very strong EBITDA component. We cannot just willy-nilly do promotion to increase sales, well, it comes at the expense of profit, right? I think the way it is calibrated, I think then we have done a decent job to put the guardrails already into the design of the program. And why we believe this is superior is when you just focus on sales, especially then, end of the year, end of the quarter, people are starting selling stuff in that does not sell out, then you get exactly to these wide swings in inventory that we want to avoid.

We want to have sellout growth, but sellout growth then pretty much in line with sell-in, so that we get out of these inventory swings. Okay?

Chelsea, Conference Operator, Coty: All right. Thank you. Our next question will come from Andrea Teixeira with JPMorgan. Please go ahead.

Andrea Teixeira, Analyst, JPMorgan: Thank you all, and good morning. Lohan, I want to extend also my gratitude and wish you well. Just thinking of what you discussed about the Consumer Beauty brands, you obviously had said that you want to maximize returns and make bigger bets, but you also mentioned that some of the European brands you want to also reinvest, like Bourjois, I think you mentioned Manhattan and Max Factor, if I am not mistaken. Just to make sure that we understand, and layering that with that strategic review for Consumer Beauty in the middle of this kind of promotional environment. I was just wondering how to think through the end of the calendar year, which is your first half, how we should be thinking of that improvement. And in terms of, I believe you mentioned the number of SKUs that you are going to be taking out.

Is that something you implement, and what is the timeline for that?

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: No, I think here we go. Again, when we look at the investment profile and how we run in DCB in U.S., we are investing into advertising, equity building. We intend to do this in Europe as well, but again, we are behind in Europe. No matter what the outcome of the strategic review is, this is the right thing to do. This is the way we create value. We have a better business, we create value for ourselves, so we create value for somebody else, and that value will be reflected at one point in time. What we are doing, I think is spot on, and it is going to put us in a better position in any scenario. When it comes to the SKUs, it is basically part of the shelf resets that happen in spring and in fall. That is when we are going to be executing this.

In the next few months now.

Andrea Teixeira, Analyst, JPMorgan: Have you quantified? That is helpful, because, to be fair, this is happening for the last decade, right? This is natural for a lot of the CPGs, in particular in beauty. You are going to always have to take down as you layer innovation.

What is different now, and what is the actual percentage of SKUs that you are taking out, and how much you are losing shelf space? I am assuming that comes at a cost of losing shelf space.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: I think this is not necessarily directly related. It can be at times, but it does not have to. Because at the end of the day, every retailer is also interested to have turns on the shelf of high volume SKUs. So, if you take a slow moving SKU out and then suddenly you negotiate for two facings on the fast moving SKU, this helps everybody, helps the manufacturer and helps the retailer. So it is a very detailed, fine-tuned discussion, retailer by retailer, almost like store by store, to have the right assortment for the retailer and have the right assortment for the store, because what you want to see is turns on the shelf, right? Products that do not turn are not helpful for anybody. Thank you.

Chelsea, Conference Operator, Coty: Thank you. We have one more question in the queue, this one from Oliver Chen with TD Cowen. Please go ahead.

Julia Shlansky, Analyst, TD Cowen: Thank you for taking the question. This is Julia Shlansky on for Oliver Chen. I am curious, as you think about the upcoming innovation calendar, how important is the ongoing recovery in travel retail versus realizing the full potential of those launches in terms of versus what you are seeing in domestic and specialty channels? Thank you.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Excuse me, can you just say that again? Because I have just had a very bad connection for a second here. I just come to the other side of the table to the microphone.

Julia Shlansky, Analyst, TD Cowen: Yes.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Can you just ask the question again? I am sorry. Yeah.

Julia Shlansky, Analyst, TD Cowen: Yes, apologies. As you think about the upcoming innovation calendar, how important is the recovery in travel retail to realizing the potential of those launches versus what you are seeing in domestic and specialty channels?

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: No, I think travel retail is an important channel for us because travel retail is not only there to create sales, travel retail is there to create the image. That is why we have, like I told you in the example with BOSS for Her, we started in travel retail because you can get amazing space. The travel retailers see their stores, especially in the airports, more as drawing consumers in. In the past, when things in the airport were cheaper than domestic, people went in there for the price. That is no longer the case. Now they go in there for the entertainment, for the in-store presence, for what is happening in the store. If you come with launches in travel retail, you can get amazing placement because you are helping the retailer to stop the travelers and get them into the store.

In return, it gives you a very good image because you do not have two or three SKUs on the shelf. You have a big display or a very nice stand with beauty consultants and so on and so on. I think travel retail for us is important, and travel retail for us is actually growing nicely.

Julia Shlansky, Analyst, TD Cowen: Great. Thank you for the color.

Chelsea, Conference Operator, Coty: Thank you. We have now reached our allotted time for questions, so I would like to turn the call back over to our speakers for any additional or closing remarks.

Markus Strobel, Executive Chairman and Interim Chief Executive Officer, Coty: Before we wrap things up, let me just reiterate a few points and just be very clear. We had good improvements this quarter, but we are obviously not satisfied at all with our current level of performance. We know what it takes to make it better. We have strong brands, leading positions in attractive categories, and a clear framework to strengthen execution. While we have given guidance for Q1 only, we are targeting to be above $50 fiscal year 2027 EBITDA and free cash flow close to fiscal 2026 levels. Our priorities are straightforward, improve sell-out, close the gap to market, strengthen profitability. We are implementing the changes needed to achieve those objectives, and we will continue to act with focus and urgency. Thank you for your continued interest in Coty, and thank you for joining us today. Have a great rest of your day.

Chelsea, Conference Operator, Coty: Thank you. This brings us to the end of today’s meeting. We appreciate your time and participation, and you may now disconnect.