COTY

LLM Evaluations

Transcript Summary

In Coty’s Q3 fiscal 2026 earnings call, Interim CEO Markus Strobel and CFO Laurent Mercier discussed the company's strategic evolution under the Coty.Curated framework. The quarter was characterized by a sell-in vs. sell-out gap caused by geopolitical headwinds in the Middle East, high promotional intensity, and retail inventory adjustments in Europe. To drive long-term value, Coty is shifting toward a sell-out culture, emphasizing retail productivity through sharper bundles and reduced SKU counts to minimize obsolescence and returns. A significant highlight was the successful repositioning of CoverGirl in the U.S. to target the Gen X demographic, resulting in unit growth that exceeds the category average. Financially, Coty is managing oil-related inflationary pressures through strategic hedging while optimizing its portfolio by exiting the Orveda license and low-margin markets in Mexico and Southeast Asia. Management firmly denied rumors of divesting core Prestige licenses like Burberry or Hugo Boss, though they remain open to value-creative opportunities for the Gucci brand. For fiscal 2027, Coty aims to stabilize EBITDA and align supply metrics with consumer demand, leveraging a modernized marketing mix focused on social advocacy in a resilient global beauty market.

5-year share-count history (top 10 holders by peak, incl. exited) + price

Revenue Segments

Filing Risk Scores

Coty Inc.: Asset Fire Sales and Impairments Mask Operational Decay and Legal Landmines

Full Earnings Call Transcript — Q3 • 2026-05-06

Operator: 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 Third Quarter Fiscal 2026 Question-and-Answer Conference Call. As a reminder, this conference call is being recorded today, May 6, 2026, at 8:00 a.m. Eastern Standard Time or 2:00 p.m. Central European Time. Please note that on May 5, at approximately 4:30 p.m. Eastern Standard 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 reports filed with the SEC, where the company lists factors that could cause actual results to differ materially from these 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.
Operator: [Operator Instructions] Our first question will come from Filippo Falorni with Citi.
Filippo Falorni: First question, Markus, I was hoping you can elaborate on the sell-in versus sellout gap that you called out yesterday, both for Prestige and Consumer Beauty, different drivers there. But how should we think about it going forward into Q4 and as you start thinking about fiscal '27? And then one question for Laurent. On the margin side, can you provide some color on the exposure to oil and higher oil prices, both from a raw material standpoint but also from a distribution and logistical standpoint?
Markus Strobel: Yes. Thanks, Filippo. On your first question, I mean, first of all, on the Prestige side, it was good that we saw some sellout growth. Not much but it was good and we're happy about that. But the sell-in was trailing. There's basically 3 reasons behind this. #1 is the Middle East because when this hit us end of February, we basically couldn't sell anything in March. And Middle East for us is a mid-teens region, was growing very highly. So a good part of that sell-in problem is attributable to the Middle East. #2, we're still in a highly promotional environment, so -- which can be visible in the gross to net. And finally, what we also saw is that a lot of our European retailers stocked up quite a bit for the holiday, for the Christmas period and our sellout was not as high as they had intended it to be. So they were working down a little bit of inventory in Q3. So all these 3 factors combined led to that gap between sell-in and sellout. When it comes to consumer, first of all, the good news on consumer is that we have closed a bit the gap to the category, especially on Sally Hansen and on CoverGirl in the U.S. Actually, on both of these brands, we are now growing versus the market in unit volume and we are catching up in value. Now why have we not seen this in the sell-in? There is basically multiple reasons behind this. #1, we have basically decided to get our whole organization focused on sellout and market share. This is for us, a big cultural shift. So in the Q3, we sold in much slimmer, much sharper bundles because you sell in a big -- in the past, we sold in very big bundles, a lot of volume, problem with it, if it doesn't sell out, it comes back in returns and obsolescence. We avoided it this time. So we sold in less but we sold through much, much more. That's how we got up against the category. So this is a short-term effect of selling in less because we changed our strategy in the way we drive retail productivity. And #2, we also exited some smaller markets on the consumer business, especially on color cosmetics in Southeast Asia and in Mexico. And obviously, when you exit, you don't sell in. So we believe that long term, the focus on sellout and the sharper bundles and much more retail productivity will make us a stronger company. And over time, sell-in -- sellout will equal sell-in.
Laurent Mercier: Yes. So Filippo, I can take the second question on -- so Middle East, indeed, there are 2 implications on, of course, the top line margin. So Middle East is a mid-single digit net revenue for the company. And of course, the other impact is indeed on oil price. So what I can tell you, if you have to keep in mind some numbers is that roughly speaking, $1 impact from oil price is impacting our profit by $2 million. This is roughly the gross number. So this is before any intervention on productivity, change of sourcing or any other kind of activities or ultimately even pricing. So -- but just to have in mind. So now but the timing is -- there is some delay, #1, because we have inventories on components. #2, also that procurement team, they have also some hedging policy with our suppliers, which is also protecting suppliers and as a result is protecting us. So all in all, it means that we are protected against oil inflation roughly by the end of calendar year '26, okay? So this is the rough cut. And maybe just to conclude on this but indeed, what are the scope impacted. So #1 is freight. This has a impact on freight. And it's also on glass, obviously and this is where procurement teams are really finding, optimizing in terms of sourcing, okay, how we can avoid this impact. And #3, it's about components, when we have some plastic components, okay? So again, we are managing this very tightly. I mean the procurement teams have really demonstrated over the last years ability and agility to navigate this kind of volatility of inflation, was the case 3-4 years ago when there was a peak of inflation. So again, the teams are really full on and managing all these elements, while at the same time, of course, making sure that we keep always the top quality products.
Operator: Our next question will come from Olivia Tong with Raymond James.
Olivia Tong Cheang: Can you -- you mentioned retail destocking is mostly complete but promotional levels are obviously still higher than you'd like. And at least in the near term, Middle East is likely a continued headwind. So perhaps can you give us a better sense of when you expect that sell-in and sellout to converge? Is this a next 12 months endeavor? Or do you think it could potentially take longer? I understand your comments to Filippo about some of the actions that you're taking, particularly in Consumer Beauty but would love a little bit more detail on that. And then just longer term, can you talk about some more of the building blocks to get you closer to category growth and whether you may need to take even more drastic actions, particularly in Consumer Beauty to get you there?
Markus Strobel: Okay. I mean let me just start with how we get to category growth, both on Prestige and Consumer Beauty. And they're pretty similar, okay, because they both run under the Coty.Curated framework. So #1 is getting the right innovation out there and focusing on the right innovation. So what we have done already for fiscal '27, we have identified what is our best innovation, what is innovation that complements the brand that has a halo effect on the brand. And what are some small things that we have been doing in the past that we should not be doing at all. So we have cut our number of activities but we're going to make the innovation that we bring to market bigger, better and make sure it has a halo effect on the brand. So that's point #1. And we're doing this on Prestige. And we're also doing this on consumer because we already see now that some of our reduced bundles with bigger, better innovation, some of our items are far ahead of objectives, some of them 3x. So we've seen we can appeal much, much more to the consumer, get more traction. Second point is getting consumer engagement, improved consumer engagement. As I mentioned in the last call, by doing so many activities, we have invested a lot of money in creating assets or even have enough -- sufficient money to put these assets out there for consumers to see. So we're changing that, creating fewer assets, having more money in working media and especially focusing more on what we call advocacy, which is a modern way of doing marketing, influencers. We have been a bit slow on this one because we still had a very traditional marketing mix up until last year but we're catching up very quickly so that we believe that consumers will respond much, much more to offering. #3 and this is very important when you mentioned the sellout, and we are changing our whole company culture to sellout oriented. It used to be fairly sell-in oriented. But now we are -- for every innovation, for everything that we're doing, we're asking what is the sellout plan? What is the joint business planning with the retailer? Does it fit into the cadence of the retailers to have a really fully synchronized plan to drive sellout and then sell-in will follow. And #4 is on everything that we do, we put the ROI lens. Does it -- we have very good ROI measurements now of all our actions, of our media spending, marketing spending. And we're seeing everything what we do, does it move the needle? Yes or no. So across these 4 elements, which is basically Coty.Curated on both Prestige and consumer, we believe this is going to have a big impact over time. Now there will be -- we had a framework. We put out this framework in the last call, as you remember, we're putting into the market now. And hopefully, it will improve quite a bit in 2027. It's probably going to go much faster on the innovation side because we decided this already. It's going to go much faster on the ROI side because we have the data. Moving asset creation to working media is going to take a little bit more time because you need some lead time to do that and getting the whole organization that has been traditionally focused on sell-in, sellout oriented will also take a little bit more time. When everything comes together, we believe we will finally be in a position that sellout and sell-in kind of equate. And we have a very healthy business from which to grow and reduce the gap we have versus the market. We want to grow over time at least with the market. And in the long term, obviously, we want to outgrow the market.
Operator: Our next question will come from Sydney Wagner with Jefferies.
Sydney Wagner: So just curious on -- we're encouraged to hear some of the progress early from CoverGirl. Which of those strategic steps do you think are most repeatable outside of the U.S.? And then we are seeing several mass retailers developing and broadening their beauty offerings. So can you talk about how you think about where the Coty brands fit into that evolving mass retail environment and kind of how your strategy fits around there?
Markus Strobel: Yes. I found it quite interesting, when we look at CoverGirl and Sally Hansen, we had a lot of failed efforts in the last couple of years to position the brands where the brands don't fit. I think at one point in time, we tried to turn CoverGirl into the ultimate Gen Z brand. That didn't really work because this was not credible for the consumer. And each time when I go see a retailer in the United States but also in Europe, they always say, please, please, please, can anybody do something for Gen X, because Gen X women have money, they're ready to spend it but nobody talks to them and nobody has an offering for them. So basically, what we're doing, what we've done with CoverGirl, we made CoverGirl, again, the -- in the process of making the penultimate Gen X brand and retailers really support us in this. What this means, the way we're going to market, we need to have a good mix of advocacy. As I just mentioned, we've got to improve that but also some traditional media to focus on the core properties, Simply Ageless, Lash Blast, all these kind of things that people know, that people trust in. So where we bring innovation on these existing franchises versus news, news, news, all the time. And I think that it's highly appreciated that helps us now to actually get much closer with CoverGirl to the category. And we're actually outgrowing the category at the moment in terms of units in the U.S. And I believe this model is also applicable outside of the U.S. We're going to apply this on Rimmel in the U.K. and on some of our other properties like Bourjois and Max Factor in Europe.
Operator: Our next question will come from Oliver Chen with TD Cowen.
Oliver Chen: Regarding the focus on the sellout culture, what does that mean in terms of your systems and/or capabilities or working capital and what you're thinking that requires? It sounds like it's quite prudent. And then as you mentioned earlier, Markus, on the promotional environment that you're seeing as well as the European accounts being overstocked, how long might that persist? Or what are you monitoring in terms of the relationship of what you're seeing there relative to guidance? And lastly, Laurent, on the A&CP shift, was that planned? Or was that in relation to what you were seeing in the marketplace?
Markus Strobel: Okay. In terms of sellout culture, which is obviously like probably the more difficult part because culture change is usually more difficult and takes a bit longer than strategy change. What we're doing is, we're trying to implement this in all parts of the organization. So when we do a business review, we're basically what are the selling plans? What is the retailer plan? How we can engage with the retailer? Has the retailer verified these plans? So they can start asking the right questions but also personally on the top level, connecting with the right retailers, which we're doing. And #2 is we will also, as we move forward, putting some on the -- these metrics into our evaluation system. If you put market share, right, into your way -- into way -- how you evaluate the organization, you see a shift to -- on sellout almost immediately. So I think it's a mix of putting it into our performance metrics, KPIs, measure it and drive it home with the organization every single day. But also building the capability for joint business planning with retailers, not just selling it in and hope it sells with top line media but having the right plan every time. It's much easier to have the right plan. If you go back to the curation, if you have fewer, bigger initiatives because you can focus on that to make the right plan versus throwing out too many things where you just don't have the bandwidth and the capacity to do the right plan. So I think this is going to help us quite a lot. When it comes to retailer inventory, again, we said before that we don't think there is any more -- much more structural destocking in the trade. Structural destocking means retailers are in general, dramatically reducing their inventory or their days on hand. We don't see that at the moment. It was just for us that all our Christmas sellout was not as great as we wanted. Now -- and we've worked through that in the first quarter. Now as you go into the next holiday period, which is Mother's Day and Father's Day, we're obviously much more attuned to that. And now that we get into the sellout culture, I think we will be better in sellout and sellout and inventory will be much closer correlated than what they have been -- what they were in the past. So I think it's going to get better over time. Laurent?
Laurent Mercier: Yes. So Oliver, I will take -- just maybe to build on -- and your first question about the working capital, I would like to build on this also to make clear that as part of the Coty.Curated and again, this focus on sellout, I mean, there are also some strong benefits on cash and working capital because, of course, by focusing on the big SKUs, reducing the tail, it has some implication on inventory and on working capital. So that's one and it's part really of the discussion. And #2, when we say focus on sellout culture, it's also behind this and is also to have a very strong focus on forecast accuracy, really understand better the dynamic with the retailers. And again, by doing this, is really to be much more efficient on our inventory and also on excess and obsolescence. So it's really a big element and that's also what you -- you saw that -- what procurement implementing alliance progress -- project, which is really about streamlining of supplier ecosystem. So it's also another benefit as part of this particular thing. So that's very important. And it has indeed concrete implication on top line, on the gross margin and also on the working capital and the cash. So now I go to your last question on A&CP. First of all, I want to remind that our level of A&CP in Q3 is flat, okay, which means that even in terms of percentage, it has increased, okay? So it's really that there is no cut or drastic reduction and it's part of our tight monitoring that we are implementing. When we say focus, it's, of course, focusing on the big bets but it's also focusing on where we are seeing strong ROI. And this is also the analysis and the decision we made during the Q3 that -- we believe that we need to preserve and we need to invest more for the A&CP and indeed Mother's Day and Father's Day are really A&CP, especially for Prestige. And this is a conscious decision that we made during the quarter, say, okay, let's reserve some money from Q3 because we are in a good place. And then we allocate this money where we are seeing, in fact, a strong ROI. So that's really part of the new dynamic, okay, not to be absolutely stuck on some decisions made 3 months ago. We are seeing how things are evolving. And when we have to make the decision to reallocate some money, we do it. So it's absolutely conscious decision.
Operator: Our next question will come from Susan Anderson with Canaccord Genuity.
Alec Legg: Alec Legg on for Susan. I guess how should we think about the exit of Orveda and then also some of the brands from smaller markets? And then when should we expect, I guess, Orveda exit to occur? And can you give any details on how large that business was?
Markus Strobel: Well, let me put it that way. Orveda, we have started transitioning out of Orveda since February, basically. We have reserved for all these costs in our Q2 already. We're executing this at the moment, which means closing some of these big boutiques. Some of them might be taken over by the previous licensor. We're still working on that. We think we're going to be out more or less completely by the end of this fiscal year. So come June, July, August, we should be out of that business and can reallocate some of that spending that we have on this business on our core fine fragrance brands. The size of the business, we don't break out individual brands but you can imagine it was not huge, to say the least. So that is Orveda. And from the other brands, you mentioned mostly the consumer business where we exited some smaller markets because they're just not economical. We cannot create any scale or make any money or have any ROI. And with our new ROI culture, we will continue some of these but will not be -- it will not be dramatically pronounced because the volume per market there is fairly small. We will focus in Consumer Beauty on our most important franchises, CoverGirl, Rimmel, Sally Hansen, Max Factor. We've got to win in North America. That's job #1. We've got to win on Rimmel in the U.K. That's job #2. And then we got to win in Europe of the rest of our portfolio, job #3, in that priority.
Alec Legg: That's really helpful. And then just a quick follow-up. Are you able to quantify the tariffs you paid over the last year? And any insight on if there's a chance for getting refunds on that?
Markus Strobel: Yes, Laurent.
Laurent Mercier: Yes, indeed. So roughly, it's about $30 million impacting the P&L this year. And of course, I mean, we are looking carefully at any opportunity to refund and depending how situation is evolving, okay, if -- when and if we can do it, of course, this is something we will contemplate to helping with our P&L.
Operator: Our next question will come from Charles Scotti with Kepler.
Charles-Louis Scotti: Two questions from me, please. The first one, you mentioned that the competitive environment remains very intense. Could you provide more details on this and who is putting pressure on pricing and in which regions? And more broadly, do you think that similarly to the luxury industry, consumers are starting to push back against perfumes price increases and could prices eventually start to decline at some point? Or could you push more on smaller formats to add up to a lower purchasing power? And then second question, there have been many media rumors suggesting that you could dispose of certain licenses to other industry players in order to accelerate your deleveraging. I think these rumors have since been denied but do you have any comment on this topic? And regarding Gucci more specifically, you previously seemed open to a disposal ahead of the license maturity. Could you give us an update on this matter, please?
Markus Strobel: Okay. Okay. I have to make -- this is 3 questions, I have to make sure I don't forgot them, one by one, in terms of the price. First of all, I mean, you got to know that the beauty market is extremely resilient. We saw again 5% growth in the market in Q3 and both 5% on Prestige and 5% on the mass. So basically, the consumer is shopping across a very, very wide price spectrum. And so far, we have seen an amazing resilience of the consumer out there. Yes, there is a bit of -- everybody is fighting for market share. So there is a lot of promotion in the market but that has more to do with, yes, building sellout and market share than it has to do with absolute price levels. So we believe we're still in good shape when it comes to the resilience of the consumer, at least we haven't seen anything negative yet. On the rumors that you may have heard that we will be divesting anything in our Prestige portfolio, I can say here for everybody, very clear that there is no truth to this. We categorically deny this. There is no plans whatsoever. We're very, very happy with our portfolio. We're very, very happy with our brands on the Prestige side. And each of them has an important role to play for us in the future. And if you go to the specific article, our Burberry and Hugo Boss, our biggest brands, they are our global brands and we love them and we continue to strongly build them in the future, okay? Very, very clear, no doubt about that. And when it comes to Gucci, yes, obviously, we are open to everything, to an early exit if it creates value for us. We need to create value for us and for our shareholders. And if anything becomes clear and fixed, we will obviously notify the public as -- based on our requirements, okay? Nothing to report here at the moment. We'll keep you posted.
Operator: Our next question comes from Andrea Teixeira with JPMorgan.
Andrea Teixeira: Markus, you and Laurent, you both talked about like going back to the SKU, about the SKU rationalization, brand rationalization, Consumer Beauty. This has been obviously a very long journey. And I just wanted to see what inning you are in terms of that, if -- how many more iterations of that you think you need? And then related to that on the cost side, I think you talked about returns or obsolescences impacting your numbers. How -- again, how we should be thinking where these margins will land? And how long do you think you're going to take as you focus, to your point, more in the sellout vis-a-vis the sell-in? It seems to me that you're going to have to incurring something, kind of restructuring those brands and making sure that you get the best returns on those.
Markus Strobel: Yes. Well, I think in terms of getting the innovation to a place where it really makes sense for shelf and retail productivity. I mean in the past, you probably know that we put out such a big innovation bundle every spring and every fall that we almost like crowded out productive SKUs on the shelf. So it's a double whammy. You have stuff out there that doesn't sell and you have lost some productive SKUs. And if you add it all up, it's all coming back to you in either returns or obsolescence, okay? And we're still suffering from the hangover of that. But this quarter, Q3 was the first time where we are breaking that cycle. And we're going to break the cycle even more in the fall bundle, which is going to be sharper. And the most important thing, it's not like just reducing the number of properties. It's actually important to bring properties out there that resonate with the consumer. So we're going to be much more consumer-based, much more trend-based, trying to meet the market in creating some of these trends. And the first results we have seen now and are really, really good. I mean we have some of the innovations are really far above our expectations and they help actually to build market share in volume but also catching up very much in value now to the market with actually a much smaller number of bundle and a much smaller number of SKUs, much more efficient model. It's probably going to take us 1, 2, 3 iterations with those bundles to work through that and see the full effects as we will see less and less obsolescence over time. But give us a few quarters and you will see the effects of this. Laurent, that was the second part. Go ahead on...
Laurent Mercier: Yes. I think on -- when we were talking about E&O and I think is really to build on this and what we were referring before. I think it's really important you look at all these initiatives really from an end-to-end element or cycle. It's not just one bucket about reducing the number of SKUs but it's how we can be very precise. And again, it will have some implication on forecast accuracy, on inventory and E&O indeed today. This is -- as you saw in the Q3, it's really an element which is hurting our gross margin in Prestige but also in Consumer Beauty. So by reducing this and to give the example, reducing the bundle, it's indeed a way that we are reducing inventory. We reduced E&O but also we will reduce the returns that we get from retailers. So this will flow into the -- into P&L. And also there are also currently some, let's say, exceptional elements. Markus was referring to some markets that we are closing in Consumer Beauty because they are not profitable. It also triggers, I would say, as a short term that sometimes it's impacting -- we need to cut some inventory here and it's hurting E&O or even in some cases, we have some returns. So these are also some exceptional costs that as time goes, will disappear. And then on the other hand, we get really the benefit from this -- from the decision. So it takes time. But again, it's really part of a very consistent plan and it will be visible in the gross margin improvement.
Operator: Our next question will come from Bonnie Herzog with Goldman Sachs.
Bonnie Herzog: I had a couple of questions on your FY '27. First, how should we think about the impact from the Middle East? Is the 2- to 3-point headwind that you expect in F -- Q4 a good proxy? And then could you provide a little more context of these pressures and maybe investments to support your launches in the year? Ultimately, is it reasonable to assume continued EBITDA declines? Or could EBITDA start to flip positive?
Laurent Mercier: Yes. Thank you, Bonnie, for the question. I think we agree on -- in your question that there are a lot of moving pieces. So is -- we always made clear that we operate in an environment where there is a lot of volatility. And indeed, currently, the geopolitics is bringing, of course, some additional volatility. So on Middle East and I think like all of us and we read the news every day, as you understand the big number, so mid-single-digit percentage of the size of Coty as a whole. Indeed, it's a very strong fragrance business and also very dynamic. So indeed, it's creating a headwind. Now you need really to understand that within Middle East, there are different dynamics. The channel, which is the most impacted is travel retail, which, of course, given the circumstances is drastically reduced. Also in Emirates because you have a lot of tourists and currency, of course, this is very -- to the minimum. But on the other hand, you have markets like Saudi, which are pretty well protected. So we need to understand these dynamics. We are monitoring as we go. And also, we are managing the P&L equation and the investment and the spending of the region according to how the situation is evolving and we have a very good team on site and very close to all the actions and really the agility. So we'll keep you posted. But of course, we are making sure that we are managing this very closely within our equation. So now on your second question, again and again, the big focus and it brings all the discipline in the organization is a focus on sellout. So this is really what will drive the performance and the improvement. Of course, at some moment, it will be visible in the sell-in but that's really a matter of discipline that Markus shared loud and clear. So gradually improve our sellout to reduce the gap versus the category which is resilient. And of course, is really -- our goal is really indeed to improve our EBITDA year-on-year trend over the course of fiscal year '27. So that's for sure. At the same time and we've been very clear, we need to manage potential inflation, which is the first question from oil increase. And also, we've been very clear in the presentation that there are also some short-term benefits that also will create some headwind next year. But again, the trend -- the organic trend is, we need to improve sellout and of course, we need to improve the trend of our EBITDA trajectory.
Operator: Our last question will come from Anna Lizzul with Bank of America.
Anna Lizzul: I know you talked a bit about the promotional environment here being a bit elevated. I was wondering if you could comment more on both the Prestige and Consumer Beauty lines of business and when you expect this to better normalize?
Laurent Mercier: Indeed, yes, we are seeing some promotion being more elevated. So indeed coming from specific actors, specific retailers. I think this is something that I will not call as a major change versus what we observed in the previous quarters and what we flagged. But we are always making sure that we are protecting our brands, we are protecting our innovation and indeed that we are not playing that game. I will insist also and you saw in the Consumer Beauty presentation that we have been also very cautious in terms of price increase versus most of our competitors. And you see that in fact, our sellout in units especially in the U.S. is growing. So this is very encouraging. And it really helps also to avoid playing this kind of promotionality game. So again and you see tangible results in the sellout improvement in CoverGirl in [indiscernible]. So we are managing this very closely, managing really all the revenue management approach. So again, so this is the way we are looking at it. When it will normalize, I can tell you on our side, we stay very disciplined on this. And then on how our peers want to play that game, of course, this is a question that you can raise with them. But again, we stay very disciplined, managing the revenue management in a very targeted way.
Markus Strobel: So we'll -- just let me do -- just a final closing comment. Obviously, we are not -- no -- to be honest, we're not where we want to be yet where we want to be but we're improving. And I think Q3 demonstrated our ability to protect profitability and cash flow while taking first concrete steps to strengthen execution across the business. Coty.Curated is the framework that's guiding the shift, sharpening our priorities, simplifying our operating model and scaling what works. With sustained focus and disciplined execution, we are confident Coty is well positioned to deliver more consistent profitable growth and the long-term value creation. And I want to use this opportunity again to thank all Coty employees around the world who are working very hard to make this happen and especially our colleagues in the Middle East are doing a tremendous job under a high state of high uncertainty. So thank you very much.
Operator: Thank you, ladies and gentlemen. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.