A：The key achievements include reigniting growth with organic sales rising 3%, significantly expanding operating margin, and committing to the biggest organizational transformation in the company's history to become faster and more agile. Stephan de la Fay, President and CEO, is proud of the company's progress towards becoming the best consumer-centric, prestige beauty company with diversified, balanced, and sustainable growth drivers.

A：The PRGP, or Profit and Growth Plan, is the company's strategy that has been approved and is now focused on accelerating growth. It involves deploying the one ELC operating model to enable the entire organization to execute their strengths, which include deepening investment in brand desirability, leveraging AI-driven consumer insights for innovation, and maintaining focus on the core business while pursuing specific brand acquisitions.

A：The company has made significant organizational changes, such as improving the retail organization and bringing in new talent across the company. These changes have led to a more efficient team with fewer layers, less silos, clarity of roles, and greater accountability, creating a truly empowered organization. This is contributing to the company's confidence in accelerating growth and rebuilding profitability.

A：Reported sales for fiscal 2026 rose 5%, with organic sales growing 3%. The company had positive sales performance every quarter, significantly exceeded initial outlook from last August, and实现了 robust benefits from the PRGP more quickly than anticipated.

A：The company's organic sales growth figures for different brand categories were as follows: Skincare delivered 4% organic sales growth, while makeup performance was stabilized and showed an improvement in organic sales trends. Tom Ford, MAC, La Mer, and Estée Lauder joined the list of billion-dollar brands, and the Ordinary is quickly ascending towards this milestone with organic sales growth of 10%.

A：Each region contributed to the overall organic sales growth with positive results across the board. Mainland China led the growth with broad-based script organic sales growth. In Asia Pacific, global travel retail returned to growth due to investments in experiential retail across mainland China and Korea. The US, UK, Ireland, and Korea also showed improvements in organic sales trend despite disruptions, and the company gained volume share in the UK and Ireland.

A：The online channel performance was outstanding, with organic sales rising double digit, driving strong prestige beauty share gain across many markets including China and the US. Online sales reached a milestone of 40% of reported sales, marking an increase of 3 percentage points from fiscal 2025 to an all-time record.

A：The commitments made regarding Beauty Rema included creating transformative innovation and restoring sales growth, accelerating speed to market, and launching breakthroughs in commercial innovation across every category. The results delivered were an acceleration of best-in-class consumer coverage, faster innovation to market, increased consumer facing investment, streamlining of the fixed cost base, and revitalization of the spirits business.

A：For fiscal 27, plans include further diversifying growth across product categories and geographies, with a focus on accelerating growth in North America. This entails expanding more brands into high growth channels across more markets, launching a larger and broader innovation pipeline, increasing consumer facing investment, particularly in priority emerging markets, and increasingly benefiting from the new One ELK operating model.

A：The progress in implementing the One ELK operating model and modernizing capabilities includes the launch of MAC US 1 on Shopify, the first deployment in an online and in-store initiative across brands worldwide in fiscal 27. The company has transitioned about 80% of expected roles, standardized select processes, and established AI-enabled technologies for service delivery and productivity. The new unified global media model is advancing with speed, facilitating the use of AI for real-time personalization in campaigns, and expanding collaboration with Meta.

A：The highlights of the fiscal 26 results include strong execution against the strategy of Beauty Reimagined, with growth in organic sales, operating margin improvement, diluted EPS growth, and net cash flows from operations. These results were driven by strategic and disciplined actions to focus on organic sales growth, transform the operating model, improve the cost structure, and create operating leverage. Specifically, the company saw broad-based growth in organic sales across all product categories and geographic regions, with a strong performance in the fourth quarter. Margins showed significant improvement, with gross and operating margins expanding notably.

A：The expected outlook for fiscal 27 is to accelerate organic sales growth and deliver stronger adjusted operating profitability. The company expects organic net sales growth in the range of 3 to 5%, with stronger sales growth anticipated in the first half of the year due to earlier innovation and improving retail trends. While the impact from the conflict in the Middle East could affect the second half, based on current knowledge, it is not expected to be material to the fiscal 27 results.

A：The expected effective tax rate is in the range of approximately 33% to 34%, and diluted EPS is expected to range between $3.10 and $3.35, with a weighted average share count of approximately 368 million shares.

A：Net cash flows from operating activities are expected to be between $1.3 and $1.4 billion. Factors that will affect it include higher restructuring payments and increased working capital needs to support growth.

A：Fiscal 27 results are expected to be reported on August 4.

A：The company plans to improve profitability by further optimizingSG&A costs and executing savings from PRGPS ramp-up. Improvements are expected across segments, particularly in categories like makeup, hair care, and fragrance. Sequential improvement is anticipated in all segments, both geographic and category-wise, as the company progresses towards its profitability targets.

A：The organic sales growth forecast for the upcoming fiscal year is 3 to 5%. Factors that influence it include timing and dynamics around travel retail shipments, and the stabilization of certain areas of business, such as high-end retail, as well as inventory levels which have been affected by visibility into first-half shipments. The company aims to achieve a balanced growth across different geographies, particularly focusing on North America as part of the beauty reimagined strategy.

A：The recent trends in travel retail include double-digit growth in the fourth quarter, specifically in Hainan, but also in other regions such as Korea, Hong Kong, Southeast Asia, and the Americas. This is helping to offset headwinds in the Middle East. The retail is strong, and the company is managing inventory to meet demand.

A：The management of the Asia ecosystem in travel retail has been transformed with a new leadership team, including a strong pipeline on innovation in the first half, strategic deployment of brands, and acceleration of experiential retail activities in the east and west. Coordination between mainland China and travel retail China is managed through regular meetings between leaders to ensure alignment and activities are conducted in a coordinated model.

A：The company expects higher growth in the first half of the year compared to the second half, which is a result of increased innovation and new product launches in the first half. This strategy is designed to achieve the full-year guidance of 5% growth.

A：The improved market share and brand rankings in mainland China are attributed to fundamental market understanding, consistent quarterly gains in market share, strong overall market growth, significant innovation, and tailored execution. The company is number one in retail sales growth and has a substantial presence across various platforms including department stores, freestanding stores, and online (now over 50% of the business in China). The company is also shifting towards less reliance on promotions and more on value proposition to recruit new consumers and sustain strong investment in the market.

A：Currently, 30% of the company's global innovation is directed towards the Chinese market, which is a result of the ramp-up of activities from their R&D center in Shanghai.

A：The company's execution against priorities was outstanding, resulting in an organic sales increase at the high end and an operating margin that was well ahead of the midpoint guidance set a year ago.

A：The strong financial performance was driven by outstanding execution of PRGB, continued progress in reducing non-consumable costs, and diversifying growth across the business. North America showed positive net sales and retail results, the China business achieved consistent share growth, and travel retail returned to positive results as the year ended.

A：The company actively managed the uncertain macro environment by executing well against guidance and mitigating a significant part of the impact of tariffs. The result was a strong beat on gross margin despite the challenges.

A：The outlook for the coming year is a 3 to 5% sales growth, with a more diversified growth pattern. North America is expected to accelerate, makeup sales will also accelerate, and East will lead while West will build on its prior trend.

A：The company is building scenario planning for sales volatility, similar to what was done in fiscal year 26. This, along with the improved cost structure and consistent execution, is providing significant sales leverage. The company is also streamlining operations to generate more sales leverage and is confident in its ability to replicate and accelerate past successes.

A：The 5% organic sales growth in North America was driven by a sequential improvement quarter over quarter, finishing on a high note in Q4. The impact of timing of shipments was minimal as the quarter's performance was retail-driven and not significantly affected by prior or next quarter growth. The market experienced faster growth due to June activities, but the company was able to accelerate with the market.

A：The indicators of success in North America include sequential growth, regaining volume share gain, and market share gains in various brands and销售渠道. The company plans to continue this momentum in fiscal 27, focusing on channels like social commerce and growing distribution of prestige brands, as well as strong online and offline consumer experiences.

A：The company is excited about all channels in North America, particularly in China, and aims to delight consumers regardless of the channel. The objective is to create a right experience for the consumer online, in specialty, multi, direct to consumer, and in department stores.

A：A new launch between the 'Behind the Load' brand in France called Glimmer is being shipped as we speak. Clinique Skincare has also had new innovations with the new smart cream CRM tapping into like pdrm.

A：The biggest opportunities for return to growth in the makeup category include leveraging leading positions with brands like Mac and Clinique, addressing past challenges, and creating a strong performance in makeup which is expected to improve sales trends and profitability. The confidence in returning to growth is bolstered by the strategic focus on these brands and channels where makeup consumers are active, along with innovation such as the blockbuster lip stain by Mac.

A：The strategy for the makeup category includes accelerating the business with leading brands such as Mac and Clinique. Mac is mentioned as having a strong acceleration due to an ecosystem created from social commerce to specialty multi-department stores and freestanding stores. Clinique is positioned as the number one brand in makeup in the US.

A：To optimize distribution and reallocate to more profitable channels, the company is rationalizing its distribution, which includes closing significant freestanding stores in Mac around the world. This pivot is being made to focus on channels like social commerce and specialty multi-department stores.

A：Post-transformational M&A, priorities include continued focus on cost efficiencies, which have been instrumental in this year's margin expansion. The company aims to use cash to drive down debt and ensure CapEx is fully funded. Dividends will also be considered, along with deleveraging the balance sheet. The company will look for opportunities to improve cash returns and is focused on building a stronger balance sheet. As the company streamlines costs and improves efficiency, it realizes more sales leverage, which contributes to increased profitability and sustainable growth.