McCormick & Company, Incorporated

Good morning. This is Patan Freha, VP of Investor Relations. Thank you for joining today's fourth quarter earnings call. To accompany this call, we've posted a set of slides on our IR website, ir.mccormick.com. With me this morning are Brendan Foley, Chairman, President, and CEO, and Marcos Gabriel, Executive Vice President and CFO. During this call, we will refer to certain non-GAAP financial measures. The nature of those non-GAAP financial measures and the related reconciliations to the GAAP results are included in this morning's press release and slides. In our comments, certain percentages are rounded. Please refer to our presentation for complete information. Today's presentation contains projections and other forward-looking statements. Actual results could differ materially from those projected. The company undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or other factors. Please refer to our forward-looking statement on slide two for more information. I will now turn the discussion over to Brendan.

Good morning, everyone, and thank you for joining us. McCormick's performance in 2025 demonstrated the strength and resilience of our business. We delivered differentiated, volume-led organic growth and shared gains, powered by sustained momentum from investing in our brands, expanding distribution, and driving innovation across our business. We achieved solid profitability gains in the first half of the year, However, rising costs in the second half related to the dynamic global trade environment pressured gross margins. Despite these headwinds, our disciplined cost management and efficiency initiatives kept us on track. As a result, we realized operating income, growth, and margin expansion for the full year, all while continuing to invest to drive future growth. We are executing with focus and discipline on what we can control and staying agile as we navigate external challenges. Our strategy continues to position McCormick for sustainable long-term value creation. Turning now to our results on slide four. In the fourth quarter, total organic sales increased by 2%, supported by growth in both consumer and flavor solutions. In global consumer, organic sales growth was driven by volume, which grew for the seventh consecutive quarter, as well as price contributions. In the Americas region, we delivered volume growth, even as pricing actions took effect, with elasticities coming in broadly in line with our expectations. Volume performance in EMEA remained solid with continued benefits from price. In Asia Pacific, organic growth was supported by strong and continued momentum in Australia and our China retail business. Importantly, we achieved a gradual full-year recovery in China consumer for the year as planned. Moving to flavor solutions, volumes declined for the global segment. our performance was impacted by customers' reset of inventory levels in Latin America, which we expect to be behind us in 2026. Volumes across the rest of the business were roughly flat and reflected softness in large CPG and branded food service customer volumes. These headwinds were mostly offset with growth from high-growth innovators, private label customers, and QSRs across the Americas and Asia Pacific. Turning to Profitability Fourth quarter gross margin was pressured by higher than expected inflation across our diverse basket of commodities, and we recognized more tariff costs than previously planned. It's important to note that pricing actions and CCI-driven productivity savings were delivered as planned. In addition, as expected, we continued to invest in the business, advancing our supply chain capabilities, innovation, and growth platforms. These investments continue to strengthen our foundation and reinforce our resilience. positioning us well for long-term success. Let's move to slide five, and let me highlight for the quarter some of the key areas of success. Across the global consumer segment, we have held or improved share across many core categories in key markets for the last six quarters. McCormick-branded volume consumption growth continues to outpace the broader edible category in the U.S. In EMEA, unit and dollar consumption increased continue to outpace branded and private label fast-moving consumer goods, or FMCG food. Let me provide some additional color, starting with spices and seasonings. We drove strong volume growth across all regions. In the U.S., we implemented pricing actions due to increased cost inflation. Elasticities, as well as share performance, were broadly in line with our expectations. Our performance in the U.S. was supported by innovations, most notably with our newest lineup of holiday finishing sugars, as well as growth in Gourmet Garden, our fresh convenience line. Importantly, our renovated McCormick Gourmet collection, highlighted by its countertop-worthy packaging, is now on shelf. As we transition the vast majority of the portfolio, velocities so far have exceeded our expectations, and we anticipate continuing to benefit from this renovation in 2026. In Canada, we continue to grow overall share in dollars, units, and volume In France and Poland, unit share growth in spices and seasonings are contributing meaningfully to EMEA's gains. Moving to recipe mixes, our performance in EMEA is strengthening. We drove unit and dollar share gains this past quarter as we expanded distribution with new customer wins in the U.K. In hot sauce, we are achieving good results. In the U.S., for the fourth consecutive quarter, we continue to drive unit share gains fueled by investments in brand marketing and innovation. We continue to improve total distribution points, or TDPs. In the Americas, we expanded TDPs with spices and seasonings, driving the majority of the growth. Across our business, we continue to gain distribution in high-growth, unmeasured channels like e-commerce, and we are expanding into social commerce in the U.S., a channel with significant growth opportunities. In flavor solutions, we continue to see strength in our technically insulated, high-margin product category, flavors. In flavors, in the Americas, we are expanding and diversifying our customer base by winning both high-growth innovators and private label customers. We're also seeing strong momentum in reformulation projects with larger customers and outperforming the industry across key categories, including beverages and better-for-you snack seasonings. Turning to QSRs, in the Americas, QSR volume performance remains strong, driven by continued innovation. In the Asia-Pacific region, specifically in China and Southeast Asia, our customers' new products and promotions continue to drive strong volume growth. In the NBA, QSR volume performance continues to stabilize. Let me now touch on some areas where we are seeing pressure. Starting with global consumer. In recipe mixes, our base business remains strong with continued consumer loyalty and growth across many product lines. competitive activity in the U.S., particularly within the Mexican flavor category, tempered overall share performance. We expect these trends to gradually improve as we launch new innovation, expand distribution, and continue to build momentum behind our authentic Mexican brands, like Cholula, and supported by strong brand marketing investments. In mustard, where we have performed well for the majority of the year, in the fourth quarter, the category declined in dollars and units in the U.S., Precious Mustard trailed the category and share performance was impacted by the timing of certain promotions, which we expect to normalize as we continue to execute on our plans in 2026. These include continued focus on innovation, increased brand marketing investments, expanding distribution, as well as strategic partnerships. Outside of the U.S., in Canada, we continue to drive dollar and unit share gains in Mustard for the fifth consecutive quarter. In EMEA, most notably in Poland, we drove unit and dollar share gains in mustard for the last three quarters. Moving to flavor solutions. In flavors in the Americas and EMEA, some of our large CPG customers continue to experience softness and volumes within their own businesses. We expect these trends to stabilize as we continue to work with our customers on product innovation, as well as with new customers. In branded food service, food traffic remains soft. which is impacting customer volumes. We continue to see growth in certain channels, particularly with non-commercial customers. This includes places of employment, hospitals, and colleges and universities. Now that we have covered the quarter, I would like to reflect on our performance for the fiscal year on Flight 6. When we set our goals for 2025 last January, market conditions were very different. Although the external environment proved more challenging than anticipated, particularly with respect to cost pressures. We achieved many of our objectives, especially on the top line, and continue to strengthen the fundamentals of our business. I am proud of the results our teams delivered and the discipline with which we executed, even as the external landscape evolved. While we achieved our top-line goals, our bottom line came under pressure. Inflation, commodity cost volatility, and the macro environment created incremental costs that impacted our margins. Despite this, we made deliberate choices to continue investing in our brands, capabilities, and people, decisions that strengthen our long-term competitiveness and position us well for sustained growth. Our focus remains clear, sustaining our strong top line, strengthening profitability, delivering strong cash flow, investing in growth, funding shareholder returns through dividends, and further strengthening our balance sheet. We position McCormick for long-term success. A few highlights for the year. We delivered sales growth at the midpoint of our constant currency guidance, driven by positive volume. Our consumer segment delivered another year of industry-leading volume-led growth, up 2% for 2025, as we continue to expand and win in high-growth channels where consumers are increasingly shopping. Our flavor solutions segment continued to show resilience despite soft industry trends, reflecting the strength of our capabilities and customer partnerships. We continued to prioritize investment in our business while driving margin improvement, particularly in flavor solutions, where we made meaningful progress in expanding operating margins despite a challenging cost environment. We generated strong cash from operations and continued to de-lever, reducing our leverage ratio, while also continuing to fund our growing dividends and capital investments. In terms of M&A, we further strengthened our global flavor leadership with the acquisition of a controlling interest in our long-standing joint venture, Bacoma de Mexico. Lastly, At the end of 2025, our Board of Directors authorized a 7% increase in the quarterly dividend, marking the 102nd year of continuous dividend payments and 40 years of consecutive annual increases. This reinforces our recognition as a dividend aristocrat and reflects our longstanding commitment to returning cash to shareholders. Our performance reflects McCormick's strength, resilience, and solid foundation. Beginning in 2024, we set a clear path for volume growth. and have now delivered two years of consistent results. With our strong brands, effective strategies, and continued investment, we remain positioned to deliver sustainable growth and profitability. We've built momentum, and we intend to carry that forward into 2026. On slide seven, let me now share our current view on the state of the consumer and considerations for 2026. The environment across our key markets is marked by volatility and continued pressure from inflation, geopolitical and trade uncertainty, and threat of rising unemployment. And overall consumer confidence remains low. Consumers, especially low- to middle-income households, continue to make more frequent trips to the store while purchasing fewer units per trip, a trend that was evident at the start of the year and accelerated through the fourth quarter. In addition, consumers continue to stretch meals across multiple occasions and seek affordable ways to prepare fresh, home-cooked meals. The consumer continues to show resilience by increasing their demand for value and behaviors that enable them to stretch their budget. These behaviors reinforce the importance of flavor in everyday cooking, with herbs and spices continuing to lead center store unit consumption. Health and wellness trends continue to gain momentum. Consumers are preparing healthier, more affordable meals at home while exploring new flavors and culinary creativity. Perimeter and scratch cooking categories are outperforming, while high-carb and high-sugar foods, along with alcohol, are declining. High-protein and better-for-you claims are driving purchase trends across retail and food service. In addition, convenience paired with flavor exploration remains an area where consumers are willing to pay more. E-commerce continues to accelerate, and social commerce is also reshaping how consumers discover and buy packaged goods, fueling momentum for emerging brands. The convergence of these enduring trends health and wellness, affordability, flavor exploration and convenience, underscores McCormick's advantage position in the marketplace. Our consumer portfolio meets consumer demand for home cooking and healthier meal preparation. At the same time, our flavor solutions business partners with large and emerging brand customers to deliver innovation and reformulation aligned with the same trends. We are winning across the food industry, from small emerging brands to large established players. and our success is not defined by any single segment or product category. Notably, recently issued USDA Dietary Guidelines for Americans again promoted herbs and spices as well as natural flavors as a healthy way to flavor nutrient-dense food, including proteins, vegetables, fruits, and healthy fats, to make them more appealing, further supporting the importance of our product categories. In terms of tariffs, recent reductions are a positive step from a cost standpoint, However, approximately 50% of the incremental tariffs on McCormick items remain in place, and we continue to face related inflationary pressures. Our pricing actions have been surgical. We took pricing actions to offset inflation, but we have not fully passed through tariff costs, and we remain focused on partnering with our customers to meet consumers' demand for value, flavor, and quality. We are navigating inflationary pressures with strategies designed to best meet the needs of the consumer and and maximize category growth. Our focus on the long-term health of the business, innovation, and execution continues to position McCormick for sustained success in a dynamic marketplace. Before reviewing our growth plans, I'd like to briefly discuss our outlook. In 2026, our results are expected to benefit meaningfully from the McCormick & Mexico acquisition, which is driving significant contributions to both the top line and operating income. Additionally, the transaction is accretive to earnings per share. However, year-over-year earnings per share growth is reduced by the elimination of the 25% minority interest in McCormick de Mexico net income attributable to Grupo Herdez and several below-the-line items that are unfavorable relative to 2025, including a higher tax rate and increased interest expense. In our base business, we continue to drive underlying profitable growth through our strong executions. That said, we anticipate incremental costs associated with elevated inflation, including tariffs, continued digital investments, most notably related to our ongoing ERP implementation, along with rebuilding of incentive compensation from 2025 to impact our profitability. We are partially offsetting these pressures through cost reduction efforts, which are focused on restoring gross margin performance and enhancing overall productivity. These efforts are supported by our CCI programs, including SG&A streamlining. Importantly, our outlook for 2026 and beyond remains firmly supported by our proven strategies and disciplined execution of our growth plans. As we look beyond 2026, we expect the incremental costs impacting the year to remain on our base. Through our enhanced CCI programs and disciplined SG&A streamlining, we are well positioned to manage these costs, maintain investment and growth, and deliver sustained profitability consistent with our long-term algorithm. As outlined on slide 8, our growth levers remain consistent to drive growth through category management, brand marketing, innovation, proprietary technologies, and our differentiated customer engagement. These levers are supported and enhanced through data and analytics as we continue to accelerate our digital transformation. The strength of our base business continues across major markets and core categories. We have a number of initiatives in flight that will continue to support our performance for 2026 and beyond. We plan to address the details of our plans at Cagney in February. To provide some perspective relative to 2025, we expect our consumer business to continue delivering volume growth, supported by higher pricing compared to last year. We expect distribution growth, accelerated innovation, and renovation across the portfolio, and increased brand marketing investments to drive higher purchase interest, and velocity, and support volume performance across our four categories. Importantly, we remain at the forefront of evolving consumer trends, delivering on the demand for flavor exploration, health and wellness, convenience, and value, while expanding our presence in high-growth channels where consumers are increasingly shopping. In flavor solutions, we anticipate stronger performance as we lap a challenging 2025 in terms of customer volumes. In flavors, our customer pipeline is very healthy across our customer segments. It has doubled relative to the prior year. We are leveraging expertise in regulatory, R&D, and product development to help customers navigate evolving regulations and meet growing health and wellness demands with innovation. And finally, in branded food service, we expect a gradual improvement as traffic trends improve. To wrap up, we remain confident in the long-term health of our business. our fundamentals, and in delivering on our plans to continue to drive industry-leading differentiated performance, supported by our broad and advantaged global portfolio anchored in high-growth categories that reinforce the strength and resilience of our business. Now, before I turn it over to Marcos, I would like to comment on some recent changes to our board of directors. Marissa Montiel and Tony Vernon, who have each served as directors over the past decade, will be retiring from the board as of our annual shareholder meeting this April. I am grateful for their exceptional service and many contributions, which has significantly benefited McCormick. We will miss them both. At the same time, I would like to welcome two new members to our board, Rick Dierker, President and CEO of Church & Dwight, and Gavin Hattersley, former President and CEO of Molson Coors. Both Rick and Gavin bring deep experience in the global consumer product industry and I look forward to working with them and to the contributions they will bring to McCormick. Now, over to Marcos.

Thank you, Brandon, and good morning, everyone. Let's start on slide 10 and review our top-line results for the quarter. Total organic sales grew 2% for the fourth quarter, driven by growth in both consumer and flavor solutions. Moving to our consumer segment on slide 11, organic sales increased 3%, driven by price and volume. Our continued volume growth for the last seven quarters underscores our differentiation and ability to drive growth, even in a consumer backdrop that remains challenging. Consumer organic sales in the Americas grew 3%, with 1% volume growth and 2% pricing. Pricing reflects the cost inflation-related pricing we implemented in September. Despite these pricing actions, volume growth was strong across core categories. The impact of elasticities overall was broadly in line with our expectations and is informing our clients for 2026. In EMEA, we grew consumer organic sales 3%, driven by a 1% increase in volume and a 2% contribution from pricing related to targeted actions taken as a result of increased commodity costs. We're pleased with the sustained volume growth for the eighth consecutive quarter in EMEA. Consumer organic sales in the Asia-Pacific region increased by 2%. The increase was driven primarily by volume growth, as our growth in China was in line with our expectations. In addition, we delivered strong results outside of China, primarily in Australia. Turning to our flavor solutions segment on slide 12. Fourth quarter organic sales rose 1%, driven by price contribution of 2%, partially offset by volume decline of approximately 1%. In the Americas, flavor solutions organic sales increased 1%, reflecting a 3% price contribution partially offset by a 2% volume decline. Volumes for the quarter were impacted by the reset of some of our customers' inventory levels in Latin America, which we expect to be behind us in 2026. Underlying volume performance was flat, reflecting continuous softness in large CPG customer volumes, as well as softer food traffic in branded food service, offset by growth with high growth innovator and private label customers. In EMEA, organic sales decreased by 2%, including 2% from price and 1% impact of lower volume, reflecting soft TPG customers' volumes. We're pleased to see that volumes remain stable in EMEA relative to recent trends. In the Asia-Pacific region, flavor solutions organic sales increased 3%, with volume growth of 5%, driven by QSAR customer promotions and limited time offers, or as we have said by price, up 2%. Moving to slide 13. Adjusted gross profit margin declined 120 basis points in the fourth quarter due to higher commodity costs, tariffs, and costs to support increased capacity for future growth, partially offset by savings from our comprehensive continuous improvement program, or CCI. Relative to expectations, changes in tariff rules within the year contributed to higher than expected overall cost inflation in our broad basket of commodities. In addition, we recognize more tariffs in our cost of sales than previously planned. For the year, gross margin was down 60 basis points, reflecting the pressure from rising commodity costs and tariffs. As we look ahead, we expect to recover this margin compression in 2026. Selling, general, and administrative expenses, or S&A, decreased 120 basis points relative to the fourth quarter of last year, driven by lower employee-related benefits expenses as well as CCI savings, including our SG&A streamlining initiatives, partially offset by increasing investments in brand marketing and technology. For the fiscal year, SG&A improved by 70 basis points compared to 2024. For the quarter, adjusted operating income increased by 3%, or 2% in constant currency. This increase was driven by improved SG&A, partially offset by gross margin and increased investments to drive growth. For the total company, we grew fiscal year 2025 adjusted operating income by 2%, or 3% in constant currency, and expanded adjusted operating margins by 10 basis points. Our performance in 2025 demonstrates our commitment to delivering healthy top-line growth and our agility in managing costs across the P&L to protect our profitability and to enable us to invest in growth. Our fourth quarter adjusted effective tax rate was 23.9%, compared to 25.4% in the prior year, as expected. For the full year, our adjusted tax rate was 21.5% compared to 20.5% in the prior year, driven by a greater level of favorable discrete tax items in the prior year. Our income from unconsolidated operations in the fourth quarter was flat, as expected. For the fiscal year, unconsolidated income decreased 3% as the strong operational performance from Macoramca de Mexico was more than offset by the unfavorable impact of foreign exchange rates. Turning to segment operational results on slide 14. Adjusted operated income in the consumer segment increased 1% for the fourth quarter, with minimal impact from currency. The increase was driven by sales growth and improved S&A, partially offset by increased tariffs and commodity costs. For the year, adjusted operated income in the consumer segment declined by 1%, with minimal impact from currency. The decline in the consumer segment was driven by increased commodity costs and tariffs, which impacted the segment's gross margin, as well as continued growth investments. This was partially offset by improved SG&A, driven by CCI and SG&A streamlining initiatives. In flavor solutions, adjusted operated income in the fourth quarter increased by 7% or 6% in constant currency. For the fiscal year, our flavor solutions operating income grew 9% or 11% on instant currency, an operating margin expanded by 90 basis points, reflecting our continued focus on improving flavor solutions profitability. At the bottom line, as shown on slide 15, fourth quarter 2025 adjusted earnings per share was 86 cents, an increase of 7% compared to the year-ago period, driven by increased adjusted operating income, improved interest expenses we pay down debt, and a favorable tax rate. For the full year, adjusted earnings per share was $3, reflecting an increase of 2%, driven primarily by growth in adjusted operating income. On slide 16, we'll summarize highlights for cash flow and balance sheet. We deliver another year of strong cash flow from operations of $962 million. We return $483 million of cash for shareholders through dividends. and used $222 million for capital expenditures. Capital expenditures for the year were slightly below our plans due to the phasing of certain initiatives. Our investments include projects to increase capacity and capabilities to meet growing demand, advance our digital transformation, and optimize our cost structure. Our priority remains to have a balanced use of cash. This means funding investments to drive growth, returning a savings proportion of cash to shareholders through dividends and maintaining a strong balance sheet. We remain committed to strong investment grade rating. With another year of strong cash flow driven by profit and improved working capital initiatives, we successfully reduced our leverage ratio to below 2.7 times. Overall, results for 2025 reflected the strength of our business. On the top line, we deliver constant currency, volume-led, organic growth at the midpoint of our range, reflecting the continued focus on driving volumes and healthy, sustainable sales momentum. While inflation and tariffs impacted our gross margin for the year, we effectively offset these impacts through CCI and HNA streamlining initiatives, all while continuing to invest for growth. As a result, adjusted operating income and earnings per share finished at the low end of our outlook, a solid outcome in line of the macro headwinds we faced. Importantly, we drove strong cash flow from operations for the year, paid down debt, and delivered, giving us ample flexibility to continue to invest in the business. Before turning to our outlook, let me provide an update on our tariff exposure and mitigation plans on slide 17. Since our last earnings call, our tariff exposure has been reduced by approximately 50%. Our total gross annualized tariff exposure is now approximately $70 million, compared to $140 million we provided previously. As a result, we expect the incremental year-over-year cost impact of tariffs to be approximately $50 million in 2026. We plan to mitigate the vast majority of this impact with productivity savings across the P&L, alternative sourcing, supply chain initiatives, and, of course, leverage our revenue management capabilities, including surgical pricing. The reduction in tariff rates is not expected to benefit the bottom line, as some supply chain mitigation efforts have been adjusted in line with the new rates, and we are intentionally choosing to continue to invest in the business. Lastly, as you know, this is an evolving situation, and we'll continue to monitor how policies impact tariff rates and, therefore, our costs. Now let's turn to our 2026 financial outlook on slide 18. Our outlook reflects our continuing investments in key categories to sustain volumes and drive long-term profitable growth, while appreciating the uncertainty of the consumer and macro environment, including global trade policies. In addition, this outlook reflects the contributions of our recent M&A transaction, the acquisition of a controlling interest in McCormick in Mexico. Turning to the details. First, current rates are expected to have a one-point positive impact on ad sales, adjusted operating income, and adjusted earnings per share. At the top line, we expect organic net sales growth to range between 1% and 3%. Growth will be supported by sustained volumes growth and a higher contribution from pricing across both segments compared to the prior year. In our consumer segment, we anticipate some volume impact from price elasticity early in the year, followed by solid volume growth as the year progresses. In our flavor solution segment, we expect volumes to recover and deliver full-year volume growth for the segment. We expect the acquisition of Macorum Academico to contribute 11% to 13% for top line, leading to total constant currency sales of 12% to 16%. Along with this top line performance, we anticipate full-year gross margin expansion, reflecting recovery from the compression experienced in 2025. This expansion reflects favorable impacts from product mix, cost savings from our CCI program, and margin accretion from McCormick in Mexico, partially offset by the anticipated impact of a mid-single-digit increase in cost inflation. In addition to a gross margin expansion, we expect SG&E benefits from cost savings to be offset by investments to drive volume growth, including brand marketing and digital investments, most notably our ERP implementation, as well as a build-back in incentive compensation. In terms of our ERP implementation, we're still taking a phased rollout approach. We've made significant progress and our deployments to date have been successful. To further minimize execution risk, we decided to consolidate the number of waves within the upcoming deployment phase, which moves forward our timeline. Overall, program costs remain unchanged. However, this refined execution plan shifts more expense into 2026 than originally planned. For the year, we expect our brand marketing spend to increase in the low to mid-teens as we continue to invest behind our brands and reflect brand marketing investments of Matorma to Mexico. As a result, our adjusted operating income is expected to grow 15% to 19% in constant currency. In terms of tax, we expect our adjusted effective tax rate to be approximately 24% for 2026 compared to 22% in 2025, where we benefited from a number of discrete tax items They are not expected to repeat in 2026, in addition to a higher tax rate in Mexico. Notably, we now expect an expense from unconsolidated operations in 2026, which reflects the elimination of the minority interest, or 25% of McCormick de Mexico net income attributable to Grupo Herdez, from our consolidated earnings. In addition, we expect net interest expense to increase compared to 2025, primarily due to the funding of the McCormick in Mexico transaction. Our 2026 adjusted earnings per share is projected to range from $3.05 to $3.13 on a reported dollar basis, reflecting benefits from operating income offset by unconsolidated expense, the impact of the increased tax rates relative to the prior year, and higher interest expense. Overall, we believe our outlook is balanced. and give us flexibility to continue to invest in the business while expanding margins. Moving to slide 19, this slide summarizes the cost headwinds for 2026 and how we plan to offset them. Our guidance reflects strong underlying base business performance and growth from acquisitions, with pressures from cost inflation, tariffs, and the review of incentive compensation that are expected to be offset through tariff mitigation plans, CCI initiatives, and H&A streamlining. Our digital investments, most notably the refined ERP implementation plan, along with a higher tax rate, are impacting underlying growth, but will become part of our base as we look beyond 2026. Importantly, we remain on track to sustain our volume momentum and drive strong top-line growth. Despite higher costs, we are investing strategically, executing with discipline, and driving efficiencies, enabling us to deliver strong operating income growth and sustain our differentiation. We are confident in our ability to deliver a 2026 outlook and in achieving our long-term objectives.