Molson Coors Beverage Company

All right. Hi, everyone. And thank you again for joining us.

I'm very delighted to welcome Molson Corp CEO Rahul Goyal. and CFO Tracy Joubert. Molson Coors has had a strong start to the year as the company continues to make encouraging progress on its transformation journey, and as the beer category trends are slowly starting to improve. Molson Coors has moved to the next leg of its revitalization journey, which is to accelerate growth in its portfolio and deliver sustainable top and bottom line growth. So thank you so much for joining me, Rahul and Tracy. Nice to see you both. Nice to see you. Trying to make sure the chairs are right. So welcome. And I wanted to kick things off today with a question for you, Rahul. You've been in your seat now for, I think, a little over seven months. So I'd love to hear From your perspective, sort of what surprised you the most in this relatively new role and then maybe what you underestimated?

Oh, wow.

I know.

That's a nice question. Did not expect that from a... No, thank you, Bonnie. Firstly, thanks for having us here. You know, the way I think all of us in the company and I particularly think is we get the privilege of working with a company that's 240 years old. you know I'm the new guy in the fleet but I've been in the company 25 years so you know our job is to make this company bigger stronger better for the future and and that's how we think about it I think so you know new I would say new understood the business understood the company probably the thing that you know your question of surprise or change is the impact you have on a lot of lives. You've got 16,000 people. We've got distributors. So the impact you have on them, in their families, probably is a little bit more deeper than I. You know it, but the weight it carries. But as a business, I've had the privilege of understanding and knowing our business for a long time. So that part, I think, has not been any big surprise.

And then just in terms of, like you mentioned, the whole organization and the culture change that maybe you're trying to... Yeah, no, and that's what I would say is just that takes time, right?

The change because, you know, I say this to our teams all the time. We're a good company. We have strong brands. We have good foundation and great profit pools. But we've got to go find growth. And to go find growth, we've got to think differently. We've got to move with some urgency. We've got to move with a little bit of speed, risk-taking. and that sense of ownership in this company. So it's a great business. It's a great platform. As you know, our challenge is go finding growth. And we believe with the new plan, we can go get that. And the exciting part is we can get our teams excited about that. And I think that's the part we look forward to.

OK, sounds good. And thinking about the category, too, and where you play, you touched on this in your earnings. a couple weeks ago, just in terms of the industry being down. I think it was 1.6%. But more recently, we've seen some of the growth decelerate, I guess. And I'd love to hear your perspective on what on earth is going on now within the broader beer category. How do you think about it? We're still not quite at summer, but optimistic that maybe weather and some events can, you know, accelerate this growth?

Yeah, I think coming into this year, I know everybody in the category was a little cautious coming out of last year, right? Last year was normally, you know, you look at whatever time span. So I think coming in this year, we felt that this year is going to be better, right? You had all these events last year, so... I think that's where coming in, we were like a little bit more confident about the category. I think Q1, as you rightly said, was a little bit much better than broadly, I would say, we expected. And April's been a little bit of a zigzag again. And so, you know, your question of if you think about the consumer first, I mean, the consumer health coming into this year, Q1, I mean, when the trips were higher, number of buyers higher, maybe basket size still cautious, but You know, we're feeling good about the year. I think April, again, macro issues. If you think about the war that happened end of March, gas prices started hitting accelerated levels at the end of March, early April. So it is going to be a volatile year. It is going to be a volatile year. I think that broadly the theme. I know some of the questions in Q1 was, well, do you see this seeing forward? And I think our comments was, well, we like what we saw, but let's be cautious. Now, on the other hand, you rightly called out, I mean, we got some big occasions in summer. And, you know, we've talked about and the categories talked about is our challenge is not you know people not drinking people are drinking they're drinking differently but it is occasions and the summer gives us a great platform for great occasions right you got the world cup you got america's 250th uh you know weather always helps i know um so so i think we're pretty energized about going into summer we'll see what april is again uh all of us need to learn deal with ambiguity volatility But we're excited about summer. I think we've got a lot ahead of us, you know, May, June, and then you start the buildup into the summer. That's exciting.

I forget the context of this with your top line guidance this year. Have you stated what that suggests for the category? Have you put a figure on what you expect the category to do this year?

No, we did not.

Okay.

So this year, you know, I know last year, just given the volatility of the category, we gave some ranges. This year, we didn't. Coming in, if you look at last year's category, it was in the minus five-ish range. We expected this year to be better. To be better. Yeah, right now, whether it's, yeah, we'll see how the year plays out. I mean, it's been a pretty volatile start anyway.

Thought it could be the year of beer stocks, right? Considering everything, the factors you just mentioned. And then, but, you know, obviously things always change. And you touched on the war on gas prices and the consumer. And, you know, very recently maybe we're starting to see some signs, right? Whether it's down trading, et cetera. So thinking about your portfolio and the value segment and how you're stabilizing that, are you starting to see any signs of maybe consumers trading down to some of those brands? And then if so, can you talk about any of the strategies maybe you're implementing to meet the consumer where they're at?

No, that's a great point. Again, if you think about the consumer, I know you asked about the value one, so just briefly, The top end of the economic consumer, they're doing okay. They're resilient, right? So for us, being sure we have a portfolio for them, whether it's Peroni, Fevertree, is important. So, you know, obviously they're leaning in on some of our above premium pieces, even things like Banquet. Trade down is a little bit, you know, we don't see trade down in our category, right? So folks who love Coors Light, they're going to come to Coors Light. Miller Lite, they come to Miller Lite. Maybe we've got to think pack sizes. So that's where we lean on a little bit. Single, small packs and large packs. So we see a little bit of that trading. Value is a big part of our business. It is a big part of where consumers are leaning in, not for trade down, but because they care about those brands. So we are seeing some progress. And this is, I want to be cautious, because I know there's more work to be done on this. There is definitely more work. It's a long-term thing. But if you think about high life, Our life is holding on to share. We're on-premise, we're gaining shares off-premise. We have work to do on Keystone. So we have some new plans coming in that I think we're getting excited about, but this one's going to take a little time. I'm going to take this forum to make a small plug, if that's okay, a five-second plug. If you guys have not seen the new Keystone Apple ad or video or TikTok or whatever that is. If you want a two minute fun, you know, just smile, go take a look at it. And I use that as an example is you got to find just a way of connecting better with consumers with that portfolio, which historically we have not supported. And so now we just need to show a little bit of support and love. And we got two big ones, High Life and Keystone. But then there's a lot of brands that we have, which are very local. that requires different ideas, different execution on that.

So almost leaning in on some of the strengths, stabilizing those brands, especially given the broader consumer backdrop, could actually work in this environment.

Yeah, absolutely. I think for us, like Keystone, I mean, we're going to have Keystone Ice coming in later in fall, which is a little bit of an ABB side, higher ABB. So as exactly you said, stabilize our life and Keystone, and then local execution on the rest of the portfolio.

Okay. And then thinking about guidance, your full year, your top line guidance of flat plus or minus 1%, which you just recently reaffirmed. But you do expect, I guess, U.S. shipments to be down 6% to 9% in Q2 because of what occurred in Q1. Maybe walk through that for us, just kind of what's happening between Q1 and Q2, and then ultimately what gives you the confidence that you'll see the recovery in the second half.

So what we did say on our Q1 call is we went into Q2 with higher levels of inventory. We feel very confident in the levels of inventory that we will have going into the summer. Last year Q2 we had higher levels of inventory. We were a little bit impacted by glass supply, and I think you've heard some other folks talk about that. But cycling some of the headwinds from last year, but we have built up inventory, we do feel good. There's always gonna be somewhere where there's a package that maybe is out of stock, but that's normal. But we're working with our suppliers, our distributors, and so we feel confident going into into the summer with the inventory levels that we've got. But just due to some headwinds and cycling from last year, Q2 is going to be lower. We do plan on shipping to consumption for the full year. So you'll see in Q3, the second half of the year, our STWs will outpace STRs as we ship to consumption.

And in the context of that, Monaco, which we're going to talk about, that is part of, you know, factored into the guidance to get to that, I guess, flat plus or minus 1%. Okay. So good visibility, see the recovery, just some noise, if you will, between Q1 and Q2, but a lot of the initiatives that are being implemented.

Yeah, I mean, if you look at Q1, we shipped ahead of consumption. We, you know, built inventory. It's a little bit of a phasing. It's all the things Tracy talked about. And, you know, full year, we've you can still see the minus one, minus two guidance that we laid out. Minus one, plus one.

Yes, exactly. Not changing guidance today. No new news. No, exactly. Core brands. Wanted to switch gears. You talked about regaining focus and then winning back share for the core brands, which is critical given the size and probably the profitability of those brands. So what are the specific strategies that you are implementing behind Coors Light and Miller Lite? And then ultimately, how do you evaluate if those strategies are working? I mean, I know we've talked about this for a number of years, but just thinking through.

Yeah, no, absolutely. And that's a fair question, Bonnie. If you think about our big brands, right? I mean, Coors Light, Miller Lite, I'd put Banquet in there.

Okay.

you know, Miller Extra Light and that. So if you think about our core portfolio, we've got to make sure they are strong and healthy. And I would say we've done a decent job on things like banquet, things like Coors Light to some degree. You know, the easiest measure is share, right? I mean, obviously, we think of volume, we think of NSR. For the external world, the easiest measure is share. And if you see our progress since 23 or even in recent times, you know, we've held that part of the category shared has been okay. Now we have some work to do on, for example, like Miller Lite. You know, this year we knew coming in it was going to be a competitive context. And, you know, in a couple of regions in the United States, Miller Lite's been a little bit challenged. So we knew it's a competitive context, but that's where we need to react. To your point of Looking forward, if you think about the plans we have laid out over the summer, it goes live. We got the World Cup. We're pretty excited about how we're going to show up in the World Cup. As they say, there's seven, eight Super Bowls in Houston and six Super Bowls in Dallas. Obviously regional, but a great way to activate and make sure our brands show up in a strong way. You know Miller Lite we launched some of the campaigns early just a way to make sure we've been competitive So and then the last piece I'll call out which I know sometimes people don't get out a new plan that we laid out is the local execution right, so We've changed our operating model. We're looking at our brands very locally. We're looking at how do we make sure these brands resonate in those particular geographies And then we can react to that. So whether it's promotions, whether it's pricing, whether it's activation, we can use the levers there. So core brands, super important. Obviously, volume and NSR is key. Share becomes an important way of measuring progress. But then in terms of making sure we have all the right plans leading into summer, I think we're feeling good about it going into the summer.

And you mentioned Miller Lite maybe needing some more work. Can you share with us maybe what's not resonating with the consumer with that brand? And as you think about kind of trying to improve share, is it innovation? Is it better price pack architecture? You mentioned some campaigns and maybe different messaging. You know, what are some of the key initiatives?

No, I would say, I mean, yeah, the campaign and the thinking and, you know, the focus we have on the light, I think, is the right one. That is resonating with consumers. You know, I think you've seen the Christopher Walken message, the message around the liquid, all of those are resonating. It's just competitive. So I think a lot more things to focus on, price pack in those particular geographies, you know, thinking through pricing and promotional activity, in those particular geographies. So it's a little bit of execution and making sure we are reactive to what's happening. But in terms of what the brand stands for and how the brand's showing up, I think we're feeling pretty good about it. The other thing I didn't mention is America's 250th celebration. So again, Miller Lite's a big brand that talks a lot about Americana. And so I think that's the other thing we're pretty excited about coming into the summer. Yeah, I wouldn't say this is a national, you know, we've got to rethink on the brand. It's more about local execution, given how competitive this context is going to be this summer.

So if we're sitting here again in a year, and I hope we are, would success to you be that these brands, you know, Miller Lite, Coors Lite, are essentially flat with Cher? Are you expecting to grow Cher? I'm just trying to think through. Yeah, no, absolutely.

That's a great question. So I think... Success for me, obviously, growing of share of total category is an easy one, but I think you've seen our numbers. We've got to change the trend. And if the core is healthy, our business becomes pretty stable in that context. So for me, in a year's time, we should be in the position of at least holding in the right trajectory for share.

Okay. Maybe I'll switch to cost and the lovely Midwest premium that's very topical. You've been talking about this, obviously, maybe early. For years. I know, that's true too. But really kind of started talking about this being obviously a major headwind to your business this year. And I think you called out a $30 million cost increase in Q1. So you expect it to be inflationary every quarter for the remainder of the year, with I think the largest increase in Q2. So you have pretty good visibility in terms of that.

How do we think through? Yeah, so we feel very comfortable with our hedge position for this year. We did layer on more hedges in February. So we've got pretty good line of fights as to what it would cost us. And I would say we've probably... we've mitigated, for the most part, any further increases, the impact that it would have on our business. Having said that, I'll just keep saying, it's a difficult commodity to hedge. I think I've spoken before, for every thousand aluminum hedges, there's three Midwest premium hedges, so it's not a transparent, it's not a great market to hedge, et cetera. We'll continue to have a look at it, but for this year, we feel pretty comfortable with our hedge position and that we've mitigated most of any increases that may come forward.

And it's just hedged through this year, right?

No, we do have some hedges on for next year, but typically we have more hedges in the first year. But again, it's very difficult to hedge, especially out longer term.

Okay. And then how do we think about that in context? Because I'm pretty sure you're staying disciplined with the one or two points of pricing. Is that correct? And so this is why we're just ultimately going to see some of the margin, you know, headwinds. Any other factors that you can, I don't know, implement to help mitigate some of this, whether it's, you know, marketing spend, cost optimization, et cetera?

I mean, we obviously got the $450 million cost savings program that we announced. And if we look at some of the actions that we took at the end of last year for the Americas GNA, we'll start seeing that flow through. We took out 400 rolls. So we started to see the impact of that on our GNA. And then we've also taken some actions in our EMEA APAC region where we've closed a brewery and we're looking at using technology and capabilities to drive through the cost savings. And I would say we're on plan, we're on track with that, with our cost savings. Now the 450 is over three years, but you'll start seeing that come through this year. So that's one of the things that we are doing, and we started last year to mitigate the inflationary pressures that we are seeing.

So Tracy, on that, because I know I've talked to a number of Staples companies, and they have identified already plans, cost optimization, productivity savings. Have you been able to accelerate any of that or pull it forward? I mean, you mentioned it's on plan, but is there a way to accelerate or move some of the projects earlier, given these darn...

Yeah, and I mean, we are looking at that. You know, the capabilities that we're building is certainly helping us. And then, you know, implementing some of the new systems and technology is helping as well. So, yeah, we're trying to pull forward as much as we possibly can.

I think you said this well, Dawn. I mean, in terms of us being disciplined about our business, I think we started that journey in Q4 last year, right? So we knew some of these headwinds ahead of us. So some of the hard decisions around our team structure, people, hard decisions around supply chain, we put it in place in due fall. We obviously are going to see those benefits as it translates. Tracy and the team in terms of hedging and trying to mitigate risk, I think we've tried to do that. I think the brand one, we obviously want to make sure we get the right return out of our investment, but we also want to make sure we're being competitive in the marketplace, right? So that's why That's what we took into consideration when we gave guidance this year, and that's what we want to try to make sure we deliver against as a business.

And to be clear on that point, if I'm hearing you correctly, so the spend levels are not decreasing in terms of behind the brands to re-accelerate, maximize share, et cetera?

Yeah, I think, again, we said it in our earnings, right? I mean, if you think about our broad MG&A spend over the next three quarters, it's going to look higher than last year. Now, some of it has one-time issues from last year of incentive and stuff, but we want to make sure we have competitive pressure in the market, right? So, you know, tough context in terms of aluminum and input costs. right cost savings program to optimize, manage the risk, but making sure that we can have the right commercial pressure in the market.

One thing I would say about our marketing investment, I mean, we are, if we look at our core brands and what's important for us, whether it be the Little Light Quiz, Life Banquet, High Life, Keystone, Apple, as Raul mentioned, even Fevertree, we've got a campaign, a new commercial for Fevertree, which we haven't had before. But we are putting more dollars behind that call, but against fewer, bigger bets. So like the World Cup, like America's 250. So there's more dollars going towards that, but we're making sure that it's in the big bets that are going to provide a return.

Yeah, I mean, just last comment there. I mean, if you think about our visibility in live sports, we probably have the highest investment in live sports this year than we've had in a long, long time. So, again, try to meeting consumers where they are as relevant for our brands. So, Casey's point, appropriate level of investment, but making sure we can win with our consumers.

And let's switch gears a little bit to the somewhat recent acquisition, Monaco Cocktails. You just closed, I believe, and it does help close the gap in your RTD. you know, the portfolio gap that you might have. So I'd love to hear more about your strategy to scale that brand, increase distribution, et cetera. And then I think you've talked about that acquisition contributing a point of growth to the top line, but importantly, accretive, you know, on the bottom line. So maybe walk through that for us and how your strategy is evolving as it relates to M&A and kind of, like you mentioned earlier, maybe a little bit more risk-taking.

Yeah, I mean, I can do the brand and portfolio trading, the numbers. If you think about the brand, right, we knew we had a gap in our portfolio. I mean, the whole flavor category has been so volatile from a consumer perspective. But we knew we had a gap on the RTD stuff. So I think if you think about Monaco, you know, it's been a business that's been around 10, 12 years. So this is not a new brand. The business was built in a very disciplined way on the back of singles in convenience stores in a very controlled geography. I think the top five states probably make up 60, 70 percent of the volume. And if you think about a big part of it is in singles. So it is a very disciplined business. business which we can then take and scale right so I mean as an organization we're pretty good at taking things that have got scale have got proven but then really making sure we can really make it bigger so I think that's why it gets us and our teams excited you know your point if it is about distribution it is about capabilities right convenience if you look at our strengths You know, we have good strength and convenience, but our big strength is in other big channels. And so therefore, then we can play that and build some capabilities with the people that have come on board. So that's where it's a great fit from a portfolio perspective. It's the right thing for us from a premiumization also. So compared to our normal NSR per hectolitre, this is a premium product. And so it does the right thing for us on premiumization. it is top line and bottom line accretive and gives us a good platform to really scale from there. So it's the right fit for us. It fits the model and then it does fit within the metrics we laid out earlier.

Yeah, I mean, we said M&A going forward is going to, must contribute between 1% and 2% of NSR and so on a trailing 12 months. And then importantly also, you know, the bottom line, it must be profitable from day one. and this brand is for us.

And so as I think about this acquisition that did just close, is it the priority to kind of focus on integrating this, and then will you continue to look at other potential M&A? How do you think about prioritizing those two?

So in terms of execution, we gotta make sure we, the way we talk about it internally is don't drop a case. right so we obviously had fever tree last year we executed that integrating that making sure we transition into our network with our distributors you know get everything working and we you know continuing the growth momentum we had on fever tree last year and continuing to this year so that is an important aspect right and then we think about monocle right and then how do we really make sure we integrate this business, keep the commercial momentum that the brand has, accelerate the momentum, and then, you know, look at all the other things that come along with that. So I think that's probably focus, Bonnie. I mean, if you think of it, you know, we don't need 10 more brands. We have a pretty strong portfolio. There's a few gaps we need to fill. And so, you know, and I'm sure, you know, Tracy talked about capital allocation discipline, et cetera, but for us, it is about fill a gap in the portfolio, what makes sense for consumers, distributors, and us, and then integrate and accelerate, right? So, and then everything else, Trish, you want to add on the capital allocation?

Yeah, just before I get there, on the sort of capabilities, I mean, you know, what we do now going forward is, you know, we make sure that we can continue the business, and hence we took over about 80 folk from Monaco business into our business, so they can continue to run the business and, you know, sell the brand and get the distribution. And then we have another team doing integration so that we don't lose focus. But in terms of capital allocation, I mean, I've spoken about what a great job the company's done with their balance sheet. And so it does give us optionality that we can do more from an M&A point of view. And in the same time, return cash to shareholders as we have been doing with our share buybacks and paying dividends. and they're just keeping our balance sheet healthy. So we do have significant free cash flow, which is great, and therefore we can do all of it.

Which has certainly changed, I know, when we've talked in the last few years. So you're in a much better place today. And as you mentioned, Rahul, you see still some gaps in your portfolio. Do you care to expand where those gaps are? I'm curious.

Yeah, I mean, I... If you think about it, I mean, the RTD space or the flavor space, I wouldn't call RTD. If you think about the flavor space, it's a big category now. And we want to make sure, I mean, we love the fact what we've done with Topo Chico. We obviously have new ideas with Simply in the market that, you know, we want to make sure we get that brand healthy. And so there's work to be done there. I mean, those are great brands to keep building on. You know, and then I think Monaco adds a good compliment to that in terms of channel, consumer. So for us, the priority is beyond beer. So if you think about capital deployment, it is going to be probably in the beyond beer side. We will always look at beer. But beyond beer is probably where we need some scale, Bonnie. So again, right now, integrate Fevertree, integrate Monaco. As Tracy said, our balance sheet gives us optionality, but we'll be disciplined about it. that we have the right brand and discipline. More importantly, that we integrate top, bottom line accretive and we can scale. That becomes important.

And yes, Beyond Beer being your priority. So what percentage is Beyond Beer of your portfolio maybe today, roughly? And then in the next three to five years, what would be the ambition?

Yeah, so I mean, if you think about it, we're approaching about 10-ish percent, right? I mean, we started with zero. Maybe not zero, less than one, right? I mean, in Beyond Beer. We're approaching 10-ish percent of our total company NSR. And we need to make sure we get to be meaningful because we are, I think we said this in our Q1 results, our beyond bear portfolio is growing faster than the rest of the company. It is growing at a much higher rate. And unless we have that to scale, it doesn't do stuff to move the company forward. And we don't want to have a beyond bear portfolio that's 50 brands. We're going to be disciplined about the categories we work in, disciplined about the brands we have, but we want to get it scaled. We haven't shared ambition externally, Bonnie, but you can think about the math. Unless it's not big enough, it doesn't do much for a $11.3 billion company. We're pretty excited on that journey. Early, we have more tools to work with, whether that's people, whether that's investment, or the balance sheet. I think the point Tracy made about getting capability in people is equally important in that space because it's a different muscle.

No, true. And as you know, I think about your business and your portfolio. I mean, the complexities have increased, but if you feel good about your ability to execute on all these different initiatives, because Any change capabilities that you think you have where you feel like you can execute on all of these different growth initiatives?

I think that's a great question about complexity. We've been disciplined to remove complexity from our business also. If you think about the structure, if you think about the coming off some of our co-manufacturing arrangements, it was about removing complexity. Now, we are leaning into areas that make our business stronger for the long term. And by the way, this is not just us. If you look at our network, our distribution network, they're leaning into similar capabilities. So for us, this is more of making sure we have the right capabilities, not just for today's business, but also the long term. And we're doing it in a disciplined way, whether it's the G&A with the right brands, uh making sure we are building out uh teams with capabilities that are important so again i think we've shared this previously our non-alc team used to be six seven people i think now we're about less than 200. wow right so to your point yes that comes with some complexity but you're building capability along with that complexity so we feel good about you know, making sure we have an ambitious goal for beyond beer. And then how are we best leaning into that?

And I know we've touched on this or you mentioned it, whether it's Fever Tree, Peroni, you know, what has you the most excited or Monaco, you know, as you think about the next year? I mean, is there anything that you think right now maybe is broadly underestimated?

Yeah. I would definitely, I mean, obviously those are the big growth brands that we have, right? So they are exciting. So Peroni, Fever Tree, Banquet, Monaco. I think those will be the, you know, I think, again, I know we don't talk a lot about Molson, the trademark in Canada, right? I mean, that brand is doing well, gaining share and in a good place. Worldwide continues to be the number one, like, you know, beer in Canada. So we got a lot of good, you know, highlights. But the thing that I would love to be, you know, your point of a year from now, you know, the excitement around Keystone and High Life and how do we make sure we can get some energy behind that. That's the thing that I'm looking forward to, right, that, you know, what as a team we can really do to get that healthy, not just for consumers and our distributors, but for even us, you know, because we're a big brand.

Right. And then that brings me maybe to my final question because it's your long-term algo, which I know you've, You've mentioned you expect to return to your long-term algo of low single-digit top-line growth and mid-single-digit underlying pre-tax income starting next year, right? So in the context of what you just mentioned, what will be the key drivers that will allow you to hit those targets?

So I know we've said that that's the goal. I don't think we gave 27 guidance. Okay.

Maybe it was me being ambitious.

Optimistic. If you step back on our business, right, I mean, obviously, you know, we, again, feel we've got a pretty good foundational business. We've been very disciplined about returning cash to shareholders with dividend and through buybacks. If you look at, you know, since 2025, I think, you know, our TSR, I think we reported in our 10K earlier this year was 22%. But we recognize for the next chapter of creating value for shareholders, we have to get this business to that algorithm, right? The low signal and mid signal. And, you know, obviously volatile times right now, but between the right, making sure our core of the portfolio is strong and stable, and transforming our portfolio with the shape for the future, you know, we think that's the right place to be. Right now, you know, as we get through the year, we'll talk about 27 and what that looks like, but we still believe that that is the right algorithm where we think we create the most value for our shareholders. We will stay disciplined on the balance sheet, we'll return cash, but we recognize we've got to get our business top and bottom line going.

And optionality, as you mentioned, given the core and then everything you've been executing on. All right. Well, all of that sounds good, and thank you so much for the conversation. Thank you. I appreciate your time. Thanks, everyone.