Okay.

Since Fabrizio Freda joined as CEO, he brought a local way of thinking to the company. The food industry, where he comes from, is very global and local, while the beauty industry is more global. For example, a brand like Estée Lauder may have 2,000 SKUs globally, with 200 products specific to Asia or China. This global strategy at the product level is thanks to the input from the Asian region, APAC, and China. It's a collaboration between both global and regional teams.

Based on your excellent answer, I have several follow-up questions. You mentioned that Estée Lauder is strong in freestanding stores and travel retail, which has recently been a weakness due to their exposure to travel retail and the US market. Sephora seems to have had success, and Estée Lauder's focus on freestanding stores has had an impact. Do you think Estée Lauder will be able to adapt if consumption channels evolve and change, or are they committed to travel retail and freestanding stores, avoiding shifts in the market where competitors go?

Let's start with travel retail. It's true that Estée Lauder is extremely strong in travel retail. However, the region that brings in significant revenue and profitability for travel retail is Asia. I remember the former president of travel retail and they were the ones that were able to drive sales, adding a huge amount of spend on top. It's really the first channel, in terms of profitability when it comes to net operating profit. There's no travel retail in the US, and it's minimal in Europe. Estée Lauder excels in travel retail because they've invested in locations and freestanding stores in airports, even for their own brand.

Based on your excellent answer, I have several follow-up questions. You mentioned that Estée Lauder is strong in freestanding stores and travel retail, which has recently been a weakness due to their exposure to travel retail and the US market. Sephora seems to have had success, and Estée Lauder's focus on freestanding stores has had an impact. Do you think Estée Lauder will be able to adapt if consumption channels evolve and change, or are they committed to travel retail and freestanding stores, avoiding shifts in the market where competitors go?

Sephora became successful with this new approach, but the LVMH Group has never favored Estée Lauder as a company or brand. They were essentially punished for not helping LVMH establish itself in the US initially. There is a personal story and ego clash between LVMH and Estée Lauder that still lingers.