... Great. So,
Everything is-
Done. We're done, right? And now, we break. Okay, great. So thank you so much for being here, and one more thing I just wanted to reference is the forward-looking statements disclosure, so everyone read this as we talk. Okay, so Stéphane, Mark, again, thanks so much for being here. The video just helped a lot with laying out the five pillars of Beauty Reimagined, which you first shared with everyone externally anyway, in February. And a lot of these things have been on par with things that we've written about, thinking this is what the company needs to do. It's only been seven months, but I would love it if you could maybe offer some perspective on which of these pillars you're kind of, where you're the furthest along, what maybe requires more time to see through.
And then Mark, I thought it'd be cool if you could offer some perspective on what Beauty Reimagined means in the Americas organization.
Thank you. Thank you for having us, like, you know, today to share, you know, the strategy. I think... Look, I would start by saying we are entering fiscal 2026 with momentum, and somebody wrote a very smart headline at the beginning of the year saying, "Be your own activist." And this is what we have been, you know, doing since I moved into the position. And you know, joking aside, you know, there was a lot of, like, you know, saying, "Are we going to be, as a team, to just do the level of transformation that the Estée Lauder company requires from a transformation?" I'll say across the five pillars, that we've made some progress.
I think the first one, which is certainly the most important part, is the ability now to move where the consumer is moving, and the first thing has been the consumer coverage, making sure that we put our brands where the consumer is, whether it's Amazon Premium Beauty Store in the U.S., but now also in Canada, in the U.K., and in Mexico more recently, Shopee in Southeast Asia, TikTok Shop around the world. That's allowed us, frankly, to just really change the trajectory of our market share, especially in the U.S., and China. That was the most important for me and the team to be able to say, "Is the strategy working?
Is this ability, after many, many years of market share loss in the Americas, to turn that around and to be now in market share gain?" And with the stabilization of China, not only stabilizing the business, but also going into market share gain. The one that certainly will take a little bit more time, but we are already seeing some green shoot, is innovation, because innovation, you don't turn it around in two minutes. Even though we've been saying that we're going to triple the innovation bringing to market in less than a year, breakthrough takes time. You know, it's just like, you know, bring something like we've done for Estée Lauder with longevity in less than six months to market. So you're going to see a lot more innovation.
On what I've committed for this fiscal year, we will be already north of 25% of the total business coming from innovation. And what I would say also, from an investment standpoint, I was very clear that we could have taken a very different position at the beginning, which was to say, "Cut the investment, drop to the bottom line, improve the overall margin." But the important thing was for us to reignite growth, to just get long-term, sustainable growth and reignite solid double-digit operating margins. So we are investing, but Mark will talk about it, we're investing a lot more efficiently than we've done it before, and also making sure that it's more balanced between the brand and the region, so making sure that we don't rely only on one geography and few brands and few products around the world.
Last but not least, PRGP, our transformation for the company, is going in the right way. It is difficult. It is transformative. It is the biggest operational transformation of the company history, but we're moving in the right direction, and I think we're seeing a lot more simplification as the video is highlighting it, and a lot more fast decision-making throughout the organization.
Yeah, from an Americas perspective, I think, you know, consumer-facing spend and investment, as well as consumer coverage, have been the two themes. We're super excited that we have gained market share, for the first time in a really long time, as Stéphane and I keep saying. And I think the momentum of that is giving us confidence in the pillars of the Beauty Reimagined strategy. And I think, you know, launching on Amazon, we've been very public. We have 11 brands on Amazon U.S., As Stéphane mentioned, we've launched Amazon Mexico, Canada, U.K., and we've developed this playbook that now, in the U.S., is being scaled across multiple different markets.
The stat I just looked up over the weekend as I was preparing is, our launches in the U.S., at the pace we were launching, we launched a new brand every five weeks. So we've gotten really good at this, and we've gotten to understand the platform. The other, you know, KPI that I would share is really giving us confidence in this decision, the brand halo impact that it is having, not just on the Amazon channel, but our business in other channels of uncertain, department stores, et cetera. So it's having this all boats rise impact in terms of the market. Moving a little bit to our media model, we have been very drastic with the changes we've made there. I'll be quite honest.
It needed a bit of a revolution in how we were thinking about it, and we broke the funnel, the traditional funnel, up into two parts, demand generation and demand capture. I think in the past, we were really good at demand capture and focusing on, you know, the ROI that we could get there, but we really maybe took our eye off the ball from a demand capture perspective, and so, not only launching on Amazon from a megaphone perspective, and it being the world's largest media platform, it's also allowed us to sort of think differently about how we create demand generation for our brands, not only from just a voice, but narrative and equity and new product launches.
The other interesting stat I'll share is the two brands we launched on TikTok Shop a couple of weeks ago, both MAC and Clinique.
... Our search term of Clinique doubled on Amazon within 10 days of launching on TikTok Shop, and so there's this very different ecosystem that is now really in this market around how you have to think about distribution decisions, but then also the media amplification that all of those can drive. It's not just, did you launch in a certain store or a certain outlet, and so we've really harnessed, I think, the power of both TikTok Shop and Amazon to reinvent our media model in a way that's allowing us to acquire new consumers, and then also have a really big halo impact on our total business, not just our Amazon business. Okay, great. Let's keep going on innovation.
Yeah.
So, in beauty, like you said, it takes time to build an innovation pipeline. But at the same time, everything you've been talking about is about the need to be faster, generally. So how do you ensure you aren't cutting corners?
Yeah
... in the important area of new product development, breakthrough innovation? And one of the things that we think about and have heard about from other beauty players is that there just hasn't been a lot of breakthrough innovation, real molecule technology in beauty in a very long time.
Yeah, I think the first thing that we have to say, like, first of all, we don't cut corners. We're finding some efficiencies, because one thing we'll never mortgage is quality and performance of the innovation that we're going to bring to market. To a certain extent, I agree with you. There's been, like, a lack of true innovation coming to market. There's been a lot of renovation of known products with some enhancement to it. But I think recently, when you look at what we've done with Estée Lauder and Re-Nutriv, surfing on the wellness trend and bringing the first true longevity beauty product, that has had, like, a resounding success in many places around the world. And we intend to. We look at innovation in two buckets.
One, which is really the big breakthrough innovation, and which requires a lot more investment from R&D and time to development, which I call almost the advanced technology, and then there's the on-trend innovation. You need to be there, where the conversation is happening at a moment in time, and for that, what we found, actually, the efficiency we've built through AI has been absolutely amazing. When I say that we're going to triple the innovation that we bring to market in less than a year, it's not by cutting corners, it's by simply building efficiency. Just to give you two really important stats. On product, you need stability. You need roughly six months of stability. Now, I can get six months of stability view in 72 hours.
Now, it's not that I'm just not doing the six-month stabilities, but after 72 hours, I have a 95% plus guarantee of what is going to be the outcome. So I can trigger purchase of components or materials and et cetera, without taking risk, which allows to reduce the time of development. The second thing is also, we've used AI to reduce the critical failure of engineering of new packaging, because we want to bring new packaging. It's not only new molecule, but it's also delivery form, new packaging, how you bring it. There's a risk of packaging failure. It exists in the industry. We've reduced by 94% the critical risk by simply using AI and doing it throughout the company.
So cutting corners is actually building efficiency via AI that reduce the risk, increase the predictability of the result, that allows us to just bring more product to market. And you've seen product like the new Clinique uncertain that we're bringing, or the Double Wear concealer that has become the number one makeup launch this year by a brand that is turning eighty years old next year. So our ability to just bring new innovation faster to market at a higher impact, you're going to see more of that going forward.
Great. We've also noticed, and it was highlighted in the video, but an emphasis on more accessible price points-
Yeah
... when it comes to products that you've launched, particularly over the last year. So how should we think about it? Is it about attracting new consumers to your brands, or is there an element of repositioning some of your brands and giving... and in the backdrop of a beauty market, where you've had some high-quality new entrants at different price points than was the case historically?
I think it's a fantastic question. I think it's both, Lauren, and I think the reality is that we in a post-COVID era, I think a lot of like the beauty products have increased dramatically their price of brands around the world. So in some instances, allow us, and the decision we're taking this year, is to reposition some product. You've seen the new foundation of MAC Studio Fix, that we've decreased the price. We've relaunched the DDML with a new SPF product in Europe, where we decreased also the price, and we're seeing the moment we do that, a lot more consumer that we are re-engaging with the brand.
I think on this one, it's more like a lapsed consumer, but new innovation, we are also conscious that there's a lot of pressure on the consumers around the world, that it is in China, or in the U.S., in Europe, in the emerging market. Being able to bring smaller sizes or innovation at the right price point allows us to win. Again, the example that I used earlier of the Clinique uncertain at less than $50, positioned in the right channel, has allowed us to just, like, you know, bring back a lot of consumers to the brand, and position Clinique to consistently be in market share growth.
So you're going to see, we have a strategy, a clear strategy of where the growth exists by price band, today, by category, sub-category, brand, and I'm very clear with the team, unless we play in 70 to 80 to 90% of where the growth is at the right price point, we don't go. And the other key thing which we've put in place, all innovation that we're bringing to market needs to be accretive to the category or the brand that we are going to play in. So it's the right price point with the right accretiveness to recruit new consumer and to re-engage lapsed consumers that we may have lost over the years.
Okay, great. Time to talk about China. We made it 15 minutes. Forget it. Both just over the next 12 months and also medium to long term. First, just a very simple question, and then we'll get into maybe the more interesting. But, you've talked about the maturing of China, making it a more predictable market. I just want to know what you're assuming for growth for China in the medium term, beyond the mid-single digits you've talked about for the fiscal year, and kind of what underpins that assumption?
I think, look, we, like you said, we just guided to mid-single digit. For us, we want to gain market share. So I, I believe, like, you know, the Chinese market is maturing and is stabilizing to a low single digit for the market in the moment where we are. Obviously, predicting what will happen in the next two to three years in China in the current context, before even the new program of President Xi Jinping that will be announced in March, is a little bit presumptuous, like, you know, to do it. But what I'm really encouraged is our ability quarter over quarter to gain market share and do it in a way that is more balanced. Again, it is not just the Estée Lauder brand and the La Mer brand. La Mer continues to be market share gain.
Lauder is back into positive, but we are seeing Tom Ford in makeup, Jo Malone. Le Labo has been absolutely a runaway success, and uncertain. A few months ago, we've launched The Ordinary in exclusivity with Sephora. That is already a top ten brand in Sephora in China, and now we are rolling out a new platform like Tmall. So we are diversifying our portfolio to be able to gain market share and to deploy at the top of the luxury, but also at the entry of prestige in China.
Okay. What can you tell us about the competitive environment currently in China, just local versus multinational brands and promotionality in the market?
I think there's been a lot of focus on, like, you know, the disruption of the market. Will the local brand disrupt, like, you know, the work that the international brand? And I think it is true that in the post-COVID era, we've seen a rapid acceleration of the local brand, which is not dissimilar to what we've experienced in Korea and in Japan, or frankly, we are also experiencing in India as we speak. But the difference is, it's interesting, in the last six months, the international brand are growing faster than the local brands, and they're growing faster through the top tier of like, you know, the luxury, meaning like Estée Lauder, Re-Nutriv, La Mer, Le Labo, but also Clinique now, which we haven't talked a lot in China, is in double-digit growth, thanks to some product that we've tailored and designed for the market.
I think you have a rebalancing of the market where, you know, depending on the data, anywhere between 30%-40% of the market is in the hand of a local brand, which still basically leaves anywhere between, like, you know, 50-60% plus in the hand of the international brand. The exciting data also in China, there's still an excess of 100-200 million consumers that are going to graduate to the middle class between now and 2030, and our ability to capture this consumer, having been in China for more than 30 years, is high. We have the credibility. We know how the market works. 99% plus of my team in China is Chinese, knows the ecosystem that is becoming increasingly complex, and I think we have the right tools to win in this market now.
Okay, great. You mentioned a few other emerging markets in that answer. So I'm curious to talk about your strategy for accelerating growth in those other emerging markets. Where's areas of particular focus, and how should we think about the profitability of these markets and investment needs? Like, where do you have significant scale, but you're already quite profitable, and others where it's more of a time to build?
I think we can tag team-
Yeah
With Amber on this one, having her part of, like, you know, Latin America and the emerging market. But I would say the emerging market is critical and central to our strategy, and I've been very vocal on the fact that I'm not yet happy of what is the penetration of emerging market. In total, about 10% of our global business is in emerging market, the largest market being India, and obviously Southeast Asia is growing very fast, but still very small. We are nurturing this market. I want the, at least in the foreseeable future, that the sum of the emerging market to be at least mid-double digit, like 15, 16% penetration to the total business, led by India. Now, you've asked the question of profitability. This market tends to be very profitable. A lot of growth from...
Accretive from the growth and from the bottom line, but they require a lot more investment. They require different strategy. For instance, in India, one of the winning strategy has been the deployment of small sizes across our brands, like it's a small Double Wear, a small ANR, a small DDDML, because the ability for consumer to get access to a luxury product is still limited. In India, 90% of the market is still mass, 10% is prestige. Prestige is growing faster, but it's very limited, the number of consumer. So our ability to bring the luxury product at a more affordable price point, the future innovation is going to be critical for us, like, you know, to win in the market. But we are committed. We just approved a massive investment in India to really accelerate the market, because the market has tremendous momentum.
As you may know, also, we have a minority in Forest Essentials in India, which is one of the largest brand, at least from an DT system, but it is actually the largest prestige brand in India, and we are working with our partners there to just, like, you know, continue to expand our presence. So a lot of potential-
Yeah
... unequally in Latin America.
Yeah, from a Latin America perspective, it's really about sort of where the consumer is from a distribution standpoint. So looking at both Mexico and Brazil, Mercado Libre, Amazon, Ulta is entering the Mexico market, and so, we're really encouraged by, you know, the early signals we've seen, both from an Amazon Mexico perspective, but then also, some of the new platforms that have emerged that our brands are already on. So overall, I think it's a, it's a great growth engine that I think we're excited to invest in. Sorry, one more question. So looking at your outlook for the company, Stéphane, over the next twelve months, what markets, categories, channels, where do you feel the most confident, versus where do you think there's risk to your outlook as it stands today?
It's a very good question because the world is not growing at the same speed of all the category at the same speed. What I'm really encouraged is how robust the U.S., market is in this moment in time. Not only us being able to gain market share, but the market continues to be very strong, and I think it's linked to the fact that beauty, especially luxury beauty, is still affordable luxury, and a lot of people are gravitating towards it.
While they may not be able to just buy new homes or new cars because interest rates are still very high, but like this little luxury, the famous thing that Leonard Lauder used to call the Lipstick Index, in this moment of high or subdued consumer confidence, I think luxury beauty tends to perform, you know, greater than many other consumer good category or other luxury good company. China, I'm encouraged about the stabilization, if we can just get as an industry and us as a company to continue to gain market share, and the early signal of July and August are extremely strong about our performance in China, so we're very excited about it. Where I think there's a little bit more risk is continental Europe, and especially Northern Europe. Think about France, Germany, the U.K. There is a rapid slowdown of, like, you know, consumption.
I think, you know, consumer confidence is also very subdued. We have a lot more work also to do as a company, and the playbook that we've created for the U.S., and China, we are in the process of deploying it in this market. Because the truth is that when you understand the ecosystem that now we are creating and operating under in the U.S., with Amazon, TikTok, the department store, specialty, multi, it's not dissimilar to what is happening in the U.K. and in many of the continental Europe market. But we need to make sure that we deploy it, we invest, and we're consistent. But the consumer confidence is a little bit worrying. On the other hand, you have also markets like Japan that have been absolutely a bright spot of the luxury industry, and we've been gaining market share.
But Japan has basically very quickly reduced. The yen gets stronger. There's less physical tourism happening. There was also some phenomenon this summer where there was, like, rumors of earthquake and et cetera, which frankly, we've seen a dramatic reduction of the tourism in Japan, which have hurt a little bit, like, you know, consumption. So I think it's overall about rebalancing, positive on the U.S., and China, which happens to be the two largest beauty market in the world, which is good, but some challenges in more continental Europe and more mature market in Asia, which we still have some work to do.
Okay. In your guidance, at the lower end of the range, you'd be below market. So I'm just curious, is that being part of the guidance range? Is that about share loss, or is it about shipments versus consumption and continued de-stock? Just-
Yeah. I want, for everybody here, to differentiate, especially in this year of transition, because still fiscal 2026 is a year of transition for us, and I want to disconnect share loss that is a retail KPI versus what we guide, which is net sales. We've guided 0 to 3, but our retail is stronger than our net because we're still rebalancing a little bit of the retail to growth to net by optimizing inventory. Remember, the first big commitment that Akhil and the team made to all of you is, like, you know, rebalancing the inventory in travel retail, and that was the commitment that I made in February at the first call, and say by the end of the fiscal year, we will be back to the right level of inventory. Promise made, promise kept.
We are, like, in the right place, and we've reduced dramatically the penetration of travel retail. That being said, we still have pockets around the world, especially in North America, where the inventory, we're still working through it and create a bit of a disconnect between the retail and the net. But our commitment is to gain share in retail and hopefully by time, reducing the gap between the retail and the net to just be able to make sure that the retail and the net are a reflection of our market share gain.
Okay, great. Amber, I wanted to talk about channel mix in North America, both sales and margin, but sales online, I think, are roughly a third of North America, but slower growth and less profitable channels still account for the majority of sales in the market, so I guess, what are the implications of these smaller but higher-margin online businesses growing faster? Is it net accretive to growth, I mean, is and profitability anytime soon? I just sort of timeline for thinking about the drag from department stores and other channels that are similarly challenged versus the really dynamic nature of the online business.
Yeah. From a growth perspective, I think there's still a very real customer that loves our department store business, and we want to protect that experience for her. Of course, then I think the expansion of our brands into other channels that are faster-growing, that I think are acquiring a younger consumer, has been part of the mix that has also been missing in the past, that we've since shored up. From a profitability standpoint, it's in line with other channels. Our new distribution and our more faster-growing ones, I would say, is in line, so we, from a profitability standpoint, are fine. The thing I think is so interesting is, there's obviously going to be a natural migration of consumers finding these different platforms as they emerge, right?
Five years ago, no one was buying anything on TikTok, and here we all are, so I think there's going to be a slow drip of the mix channel. It's not gonna be something overnight that all of a sudden you're, you know, re-engineering things to have to respond to it, but I think it's important for us to still remember that how do we continue to optimize and be efficient with our department store channel that is very important and big for us, while also investing in these emerging channels that are still providing a new consumer outlook for us?
Okay. So but as we look forward, I mean, is it two years before North America returns to growth mode just because of the weight of the decline, protecting and respecting the customer that wants to shop in department stores, but there's also just a reality of the department store industry?
Yeah, I'm not prepared to give a sort of exact-
Okay
... timeline, but I think we are encouraged by the total market growth we are seeing at a retail level, to Stéphane's point, on market share gains, that is giving us optimism that I think that it's balancing out.
July, I'm sure some of you have access to Circana, was very strong. The market was strong, and we were even stronger, and the one data point that will remind everybody we've guided is outside of China and travel retail, we say the rest of the world will have sequential improvement-
Yeah
... and end up in positive, low single-digit growth by the end of the fiscal year, and from there, we continue to just, like, you know, build on strides.
Yeah. Perfect. Okay. Mark, I wanted to go back to one of the five pillars, is reimagining the way we work. Can you talk a little bit or just give some examples of how the new organization structure in the Americas makes the business more agile?
Yeah, you know, I'll use the Amazon example as a sort of fresh one. The way that we were structured before was lots of different brands that were sort of siloed and making independent decisions, and when you launch on a platform like Amazon, it becomes really hard to look at how the platform is operating and not inherently compete with yourself across different brands. Because you might have one brand bidding on a search term and another at the same, and blindly not knowing that they're sort of bidding or bringing cost per clicks up. And so when we built the team, we were very intentional about saying we still very much hold to our core brand lead as a core part of who we are.
But we have to look channel-agnostic as well to make sure that we are leaning into the strengths of how we do that, and then also creating agility and speed and empowering the team that's running that business to not have to trip over each individual brand to get decisions. And so, I would say, one, the way that we built that team was a key difference. It's the only team in our organization that is sort of channel vertically necessarily than brand. And second, the amount of pass-off taxes that we have gotten rid of with just the elimination of the coordination, I think it's really refreshing, and, you know, we were saying in another meeting before, there's obviously a hard part of the layoffs that have been very real on a human level.
But I think the momentum the team is feeling of just the, like, "I'm empowered to make decisions," and the speed in which they've then been able to do that, has been really, really great. You know, another silly example is, you know, Taylor clearly announced a new album, and she's in her Eras era, and many of our brands wanted to respond, and before, we would've had to get creative approval, and who's posting what, and it would've taken us weeks, and, within a matter of days, brands had posts up on social media on, you know...
The Clinique Happy brand did a cute little thing on, you know, our orange era, and so there's just that. That's a real example that in the last two weeks we've been able to really just say, "No, like, the North America region is gonna respond to cultural moments," and having the team agility and structure has really allowed us to do that.
I think, Lauren, one thing to not underestimate the change that we've made by the beginning of this fiscal year, of the accountability of where the P&L is in the organization, has made tremendous changes, and moving the P&L responsibility from the brand, we were a brand-led organization, now we're consumer-centric, and moving the P&L closer to where the business, where it's happening, allows Amber and Tara in North America or the rest of the commercial leader to be able to flex and to move resources, frankly, at the speed of what the consumer is asking for it. Before, I was always joking, like, "It's not fair to ask the Estée Lauder brand to be able to just decide how to allocate the fund in India from New York City.
It's just, like, impossible to do it." Now, the more you put the resources closer to the consumer, the more agility and efficiency you create, and at the same time, you recenter the brand to create the best innovation, the best commercial activation, and so on, and to pass it on to just the region to execute with excellence.
Okay. Definitely. M&A. So, Stéphane, sorry, I'm curious-
I'm leaving.
Right, we gotta move it. But just curious to hear your perspective. You know, on the fourth quarter call, you did talk about engaging external advisors to review the portfolio. Just, you know, a little clarity, are we looking at culling products? Are we thinking about getting into new categories? Are we thinking about divesting brands? But maybe to frame a little bit for us what this is about.
So, like, to your question, I think I just want to clarify a little bit when we said, like, you know, external advisors. They are bankers that we've like, you know, hired to just help us, like, you know, look at our portfolio. And I've been very clear, even in February, in my first call, that we are in every year, in a cycle where we are looking at the strategy of the brand. Will this given brand fit with the new Beauty Reimagined strategy? Is this brand in the right channel? Do they have the right innovation, the right investment, and so on and so forth? And I'm really committed to continue to invest in the highest return, you know, for the company on the get-go, and I think we need to recognize that portfolio have to evolve.
Within the brand, the portfolio of product needs to evolve, but that I think we've been very good over time, and we've demonstrated with the improvement in gross margin, and the systematic reduction of inventory has also come from the rationalization of product and SKUs, where you don't have the profitability or the return. We just cut, and we move on, and we bring new innovation. But the truth is that we may have to do some evolution, and so once we have more detail, we'll obviously, like, you know, make it public, and we'll announce it, but this is, like, the process where we are in at this moment in time.
Okay, great. Margins and reinvestment. So also on the last call, you were very clear that within the PRGP, G stands for growth. We quoted you in our note. I almost made it the title.
Almost.
Almost. It was a debate. But you're gonna focus on reinvesting to fuel growth, right? Eventually ahead of the market, but that requires investment. So how are you just balancing this, you know, or how do you achieve the healthy balance between investing to reinvest and reinvigorate top line, but at the same time, to be restoring and building margin?
Look, what we are, what we're trying to do at, like, this moment in time. Think about in fiscal 2025, we've declined by 8%. Three years of constant decline and margin erosion. We've guided 0% to 3%. The math are simple. We need this 8-point to 11-point swing into one fiscal year, and at the midpoint from a adjusted operating margin, we said we were going to improve by 165 basis points, and that's after absorbing more than $100 million of tariff and mitigating more than half of that before that. So there's a lot of things that we're going to do at the same time, so...
But it was important that the PRGP. It was very clear there was no other path but to invest, invest in just market share gain and putting really our brand at the forefront, frankly, of, like, you know, the consumer mind. Because when you look at it objectively, and from a brand health and brand desirability, most of our brand, if not all of them, are very top rank in many markets around the world. The visibility of some of them, because we had mortgaged investment on the top of the funnel, or what we call now the demand generation, was not sufficient. We were very good in China, we were not good enough in the U.S., not good enough in Europe, so we had to just put the investment.
Now, what you're seeing from us, with the improvement of gross margin, with the efficiency that we are trying to build with the PRGP and continue to build throughout this fiscal year, I really believe that we're in a position to start building a lot more leverage. So while it was a necessary thing to just put more investment, you're going to see us now going more into a mode of creating more efficiency in the investment that we are doing, rather than necessarily saying, "We need to just, like, you know, continue to invest ahead of the sales," which we may have to do in some pocket and in some geographies, like the emerging market. I really believe that we need to fuel the market there to just propel the acceleration in this market.
It is important, but think about now, the P&L of the Estée Lauder Companies this year and going forward is going to be built for a lot more leverage going forward. Once the market resumes with a more steady and better growth than what it is today, and we will be in a consistent market share gain.
Okay, great. So just to wrap up, hopefully, you both come back next year. And so-
With pleasure, if we are invited.
We're sitting here... You'll be invited, trust me. So after you've put this date in your calendar, just what would you say success looks like for you? You know, one or two things that might derail where you stand in the turnaround, but what do you think we'll be talking about a year from now?
I think in a year from now, we'll be able to just, like, prove more consistently market share gain.
Mm-hmm
... beyond the U.S., and China, I think with the consolidation of the great work we've done. Obviously, like, continuing to gain market share in Japan, even though there's a slowdown in the market. I want to turn around the overmature market, the acceleration of the emerging market. We've talked about it. But I think ultimately, what I'm laser focused on with the team is to create an operating model that is give us the agility, the speed of execution, and the maximum potential leverage for growth, and to build solid double-digit operating margin for the years to come. The few things that could derail all of that are more external factors. You know, there's not a day. We were just talking about it at the beginning of the conference, where there's no end to the amount of volatility.
If I had known that my first position as CEO had to deal with so much volatility in the world, I would still have taken the job, but it is just, like, mind-blowing what is happening from different geographic consumers and et cetera. And we are facing that with determination, but frankly, like, you know, today, yesterday, the tariff was not a thing, then it became a thing, then now they may be, you know, challenged again. So just managing all of that is actually the only thing that takes your eye off the ball of just driving the business, and we are conscious about it, but we are operating in this new environment, which I think is the new norm, so we just have to just get used to it and just, like, move forward.
I think Beauty Reimagined. I have all the confidence this is the right strategy to just put back the company in the rightful place that it deserve, which is at the top.
Okay, great. Perfect place to end. Thank you so much for joining us. Please join me in thanking Estée.