MKC - NYSE

Good morning. This is Faten Freiha, VP of Investor Relations. Thank you for joining today's fourth quarter earnings call. To accompany this call, we posted a set of slides on our IR website, ir.mccormick.com. With me this morning are Brendan M. 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 & Company, Incorporated's performance in 2025 demonstrated the strength and resilience of our business. We delivered differentiated volume-led organic growth and share 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 & Company, Incorporated 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 continued momentum in Australia and our China retail business. Importantly, we achieved the 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 US. In EMEA, unit and dollar consumption 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 the regions. In The US, 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 US was supported by innovation, 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. 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. 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 UK. In hot sauce, we are achieving good results. In The US, 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 US, a channel with significant growth opportunity. 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 remained 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 EMEA, 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 US, 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, 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 US. French's 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 US and 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 in 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 win new customers. In branded food service, foot 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 Slide six. 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 to position McCormick & Company, Incorporated 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 continues to show resilience despite soft industry trends, reflecting the strength of our capabilities and customer partnerships. We continue 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 delever, 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, Pacoemer 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 long-standing commitment to returning cash to shareholders. Our performance reflects McCormick & Company, Incorporated'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 have 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 the threat of rising unemployment. 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 & Company, Incorporated's advantaged 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 & Company, Incorporated 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 maximize category growth. Our focus on the long-term health of the business, innovation, and execution continues to position McCormick & Company, Incorporated 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 de 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 Herdes 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 execution. 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 the rebuilding of incentive compensation from 2025 to impact our profitability. We are partially offsetting these pressures through cost reduction efforts 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 in growth, and deliver sustained profitability consistent with our long-term algorithm. As outlined on slide eight, 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 CAGNY 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 core 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. Maritza 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 have significantly benefited McCormick & Company, Incorporated. 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 and 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 & Company, Incorporated. Now over to Marcos.

Thank you, Brendan, 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 plans 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 slide 12. Fourth quarter organic sales rose 1%, driven by a price contribution of 2%, partially offset by a 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 customers' volumes as well as softer foot traffic in branded food service, offset by growth with high-growth innovator and private label customers. In EMEA, organic sales decreased by 3%, including 2% from price and a 1% impact of lower volume, reflecting soft CPG 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 QSR customer promotions and limited-time offers, partially offset by a price of 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 our 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 recognized 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 SG&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 strong operational performance from McCormick de Mexico was more than offset by the unfavorable impact of foreign exchange rates. Turning to segment operational results on Slide 14. Adjusted operating 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 SG&A, partially offset by increased tariffs and commodity costs. For the year, adjusted operating 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 operating income in the fourth quarter increased by 7%, or 6% in constant currency. For the fiscal year, flavor solutions operating income grew 9%, or 11% in constant currency, and 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¢, an increase of 7% compared to the year-ago period, driven by increased adjusted operating income, improved interest expenses as 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've summarized highlights for cash flow and balance sheet. We delivered another year of strong cash flow from operations, of $962 million. We returned $483 million of cash to shareholders through dividends and used $122 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 significant portion of cash to shareholders through dividends, and maintaining a strong balance sheet. We remain committed to a 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 delivered 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 this impact through CCI and SG&A 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 light of the macro headwinds we faced. Importantly, we drove strong cash flow from operations for the year, paid down debt, and delevered, 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 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 tax 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 de Mexico. Turning to the details. First, current rates are expected to have a one-point positive impact on net sales, adjusted operating income, and adjusted earnings per share. At the top line, we expect organic net sales growth to range between 1-3%. Growth will be supported by sustained volumes growth, 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 solutions segment, we expect the volumes to recover and deliver full-year volume growth for the segment. We expect the acquisition of McCormick de Mexico to contribute 11-13% for the top line, leading to total constant currency sales of 12-16%. 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 de Mexico, partially offset by the anticipated impact of a mid-single-digit increase in cost inflation. In addition to our gross margin expansion, we expect SG&A benefits from cost savings to be offset by investments to drive volume growth, including brand marketing and digital investments, most notably 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 McCormick de Mexico. As a result, our adjusted operating income is expected to grow 15-19% in constant currency. In terms of tax, we expect the 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 that 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 Herdes from our consolidated earnings. In addition, we expect net interest expense to increase compared to 2025, primarily due to the funding of the McCormick de 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 gives 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 a 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 SG&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're 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 the 2026 outlook and in achieving our long-term objectives.

Thank you, Marcos. Before moving to Q&A, I would like to close with our key takeaways on Slide 20. The long-term trends that fuel our attractive categories—consumer interest in healthy, flavorful cooking, flavor exploration, and trusted brands—are enduring trends. They continue to reinforce the relevance and resilience of our portfolio. In 2025, we drove differentiated volume growth and share gains across our core categories. Our results demonstrate that we are investing in the areas that drive the most value for consumers, customers, and shareholders. As we enter 2026, McCormick & Company, Incorporated is operating from a position of strength with a solid foundation and disciplined execution. Despite ongoing macro and cost headwinds, we remain positioned for sustainable profitable growth. Our 2026 outlook reflects continued top-line momentum, margin recovery, and strong operating profit growth, anchored by innovation, efficiency, and our acquisition of McCormick de Mexico. While global trade dynamics continue to drive cost inflation, we are leveraging our competitive advantages, productivity initiatives, and cost management discipline to mitigate these pressures, sustain volume growth, and fund our investments for the future. Looking beyond 2026, these incremental costs are expected to remain in our base. However, our enhanced CCI plans and SG&A streamlining discipline position us to manage these pressures effectively while sustaining investment and delivering growth in line with our long-term algorithm. Ultimately, we remain a global leader in flavor, driving growth that is both sustainable and differentiated. Finally, I want to recognize all McCormick & Company, Incorporated employees for their dedication and contributions. Your commitment and passion continue to drive our success. I'm confident that together, we will continue to deliver differentiated results and long-term shareholder value. Now for your questions.

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Thank you. And our first question is from the line of Andrew Lazar with Barclays. Please proceed with your questions.

Great. Thanks very much. Good morning, Brendan and Marcos.

Good morning.

Maybe to start, your '26 outlook is predicated on continued volume momentum. I was hoping you could talk a bit more about the key drivers underpinning your view. And in particular, maybe you can speak to expectations in consumer Americas just given recent scanner trends have decelerated a bit. I'm assuming on elasticity but perhaps you can clarify.

Sure. Well, a couple of thoughts just I think in terms of top line. I think our guide for '26 reflects obviously both segments. Factors in obviously the uncertainty environment. But when we look at kind of the range that we're providing, I think everyone, consumer drives sort of the mid to high end of that range, and then, you know, flavor solutions probably the low to the mid end of that range. You know, overall, we expect pricing to contribute more to our growth rate than it did in 2025, we also expect to maintain volume growth for the year with, you know, volume growth in both segments. I might just speak maybe to each segment just to give a little bit more color on that. On consumer, we expect to continue delivering volume growth. It will have higher pricing, I think, compared to, you know, let's say, the last year. You know, we have driven volume over the last one and a half years, and it has been driven by a lot of our, you know, actions and plans and a number of things that obviously we've talked about in the past. And as I look to '26, a lot of those levers really remain in place. We'll continue to increase our A&P with really strong messaging, you know, that resonates. We'll continue to benefit from the innovation that we launched in '25. And those are things like the US Cholula expansion or McCormick, you know, innovation like finishing salts or the type of innovation that we've launched in EMEA behind air fryer seasonings. I think one of the positive things now, it got launched in, sort of towards the tail end of '25 and really started to hit the shelf. But this US gourmet relaunch, you know, McCormick gourmet, you know, we really think is driving a lot of positive velocities right now. And we like what we're seeing on shelf, and so that we'll get a full three quarters of the year on that innovation. And the whole price gap management plan also still remains in our base as it did, you know, in '25. Incremental to this, we're expanding distribution across our core categories. We'll continue to launch new innovation. And we'll also continue to renovate parts of the portfolio. And, you know, one of the ones I'm also excited about is we're gonna be, you know, relaunching our entire blends and seasonings line, and that's really quite exciting. So we like that that's another renovation that's gonna be coming out in '26. And then we're just gonna continue to sort of focus on these high-growth channels that we're seeing a lot of success in. And so, those are the things that are really driving, I think, and underpin and underwrite the consumer growth. In flavor solutions, you know, we expect to do better than we did in '25. We know '25 was impacted by large CPG customer volumes and being soft as well as in branded food service, but we do expect improvement particularly as we continue to grow with those high-growth innovators and private label customers. You know, we're acknowledging that we are lapping a difficult '25, so expect to do better. But we, you know, it's difficult to predict the level and pace of that improvement. So I still expect some lumpiness in this business as we've experienced in the past. But the things that give me, I think, more optimism, if you will, is just I'm encouraged by the scope of our innovation pipeline in that part of our business. It's really healthy across a lot of our customer segments. The reformulation projects are increasing, and we talked about that, you know, before, particularly with large CPG customers. And we're partnering with a lot of emerging brands and private label players, you know, to sort of really work on flavor there. And it's in exciting categories like protein-based beverages or fiber-based snacks or, you know, these are the types of health wellness trends that we're seeing, you know, getting a lot of activity. That gives us some reason for optimism. And our win rate on health and wellness briefs, you know, remains strong. So, you know, we have, I think, a realistically, you know, positive outlook. But we're also, you know, remembering what happened in '25 and not counting on all of that to, you know, sort of necessarily rebound back really strongly, but we do think it's gonna be positive improvement over the year. And it will be volume growth in both segments.

That's really helpful. And then just a very quick one for Marcos. Just anything to keep in mind on sort of the cadence of EPS growth as we think through the four quarters ahead? Just things discrete to keep in mind, whether it's year-over-year issues or things of that nature. Thank you.

Yeah. So, in terms of the EPS, the test should follow the operating profit over the course. So, we'll see operating profit fluctuating over the next few quarters. OP growth will be in Q1 will not reflect the full quarter of McCormick de Mexico. So we'll be slightly below guidance. So if you think about it that way, earnings per share will follow that fluctuations of OP, and we should see a Q1 that will be in line. I would say, would meet the high end of our guidance range, but then you will build up as we progress over the next few quarters.

Thanks very much.

Next question is from the line of Peter Galbo with Bank of America. Please proceed with your question.

Hey. Good morning, guys. Thank you for taking the question. Marcos, I just wanted to ask a bit on the gross margin in particular just given some of the nuance of what happened in the quarter. I think it came in obviously below even your expectations. You've talked a bit about, you know, the core inflation components maybe being stickier even though we've had some tariff relief and, you know, the outlook for '26 kind of implies gross margin expansion. I think you said, you know, recovery. I didn't know if that meant full recovery of '25 into '26. But maybe you can put some more parameters just around how you all are thinking about the gross margin expansion for '26 relative to '25, again, in light of kind of it coming in light of your expectations in the fourth quarter?

Yeah. Sure. Let me just explain the 2025 Q4 results, and then I'll go into 2026. So at a high level, if you would take a step back, the external environment continues to create volatility in terms of our commodity costs. And, you know, we continue to focus on the elements within our control. We deliver CCI, enhanced CCI even to offset the additional tariffs impact that we saw in the year. We executed on pricing in line with our plan, and we continue to, you know, grow volume in the consumer business in Q4 despite all the pricing actions that we've taken. More specifically to the drivers of the gross margin, you know, there's two main drivers. One is the indirect consequences of the tariff-related market pressures that we've been talking about over the last couple of quarters. And it actually accelerated in Q4 relative to Q3, which means that, you know, it was more than we expected, meaning that there was some more inflation coming through our P&L through the balance of the year. And then the second point is the direct impact of tariffs, which is about recognizing more of those tariffs inventory in our P&L than originally planned. So we had that had tariffs on it. You know, it's a bit of a product mix in Q4, and those got sold through it, and we saw the impact of that in that impact of the additional cost hitting our P&L in Q4. So the combination of the two elements is the broader commodity cost is impacting our gross margin plus the impact of tariffs were what changed versus our expectations as we went through the year. But also, I think it's important to mention that in Q4, Peter, in this time of volatility, we are focusing on managing the P&L holistically, not only the gross margin line. And that's where we drove a lot of SG&A savings. We had done a lot of, made a lot of progress in terms of SG&A over the last, you know, few quarters. Q4 was also a quarter in which we focused on streamlining SG&A while increasing investments to drive growth and remarketing and digital. So managing the P&L holistically and getting to the OP number that was, you know, in line with our expectations, meaning SG&A offsetting the gross margin piece. But obviously, you know, the gross margin is something that we want to recover. Our expectations going into 2026 is that we are expecting to recover the margin compression that we saw of 60 basis points in 2025, and we provided a qualitative guidance in terms of gross margin. As it is a bit difficult to be precise at this time, given the uncertainty that we are facing in the market and the microeconomics, it is a little bit difficult to be precise in terms of gross margins. So we provided that view. But at the end of the day, the focus will be on recovering the margin compression that we saw in 2025.

Great. Okay. Thank you for that. And Brendan, maybe if I could ask just more directly on Slide 19, where you kind of have the bridge on base business to the guidance. The ERP, I know, has kind of been discussed in the past now with the and maybe you put a more concrete number around it. But I want to make sure I understood you clearly that you're accelerating the spend or some of the projects into '26. But then those costs are actually expected to remain in the base. So we don't really expect maybe not even any relief on that in '27. Maybe you can just clarify specifically around the ERP and how we should think about the phasing of projects in '26 and then how to think about it for '27 and beyond. Thanks very much.

Peter, first, let me provide some just some broad perspective on sort of what we were communicating, I think, throughout the script, but also on Slide 19, and then I'll ask Marcos to speak more specifically to how to think about ERP beyond '26. You know, overall, broadly, as we kind of thought about the year for 2026, you know, our top priority was to really think about how we maintain sales momentum. That being a top priority, you know, in terms of having a very healthy top line. And we're balancing volume and price. And so and still, you know, achieving, you know, sort of healthy sales growth. And still invest in the business also at the same time. But in 2025 and 2026, you know, we certainly saw a lot more cost come into our P&L, whether it be through inflation or tariffs. Or in this case, we go to '26, you know, building back incentive compensation. And we're offsetting that with, you know, targeted pricing, productivity initiatives, cost savings initiatives, but we can't fully offset everything. It's so, you know, those are the elements that you see in that bridge, which were which are. Tax and ERP. But I would say that the fundamentals and the health of our business are doing really well. And we just need to work through this dynamic environment in terms of cost. Now in ERP, you know, we decided that as this program is going well and we are seeing success in a number of our go-lives already to date. As we assess sort of the next one, it just felt prudent for us to minimize the number of waves that we would have to go through. Marcos, do you want to add on top of that?

Yeah. So we have been very successful in deploying our ERP implementation over the last couple of years. It's a lot of work, as you can imagine. We've taken a very integrated approach in terms of how we deploy the ERP. It's not only the ERP implementation team, but it is them working together with the business as well as the technology teams with strong support from our external partners. So that is going very well. You know, this, the programs, you learn, you adapt, and you evolve. And one of the things that we were considering over the last three to four months is really about, you know, the number of waves within the next deployment phase that we have. Whether we would, you know, actually compress the waves to minimize risks. And that happens because as you shorten the periods between dual operations between legacy systems and new systems, that minimizes data reconciliation interface risks. So that is the key element of compressing the phases. Which is, you know, you'll eliminate that interfaces between the two systems for a longer period of time. So by doing that, we believe we are further minimizing risk. But as we do that, we bring forward the timeline of development and preparedness into 2026. As this last go-live will take effect in early 2027. So as you do that, you shift costs into 2026. As, which is different than we had originally planned. Overall, costs for the program remain the same. But it's just a shifting timing of expenses between '27 and '26. Due to this change in the approach that we're taking. In 2027, you should see that cost moderating, and then we should see further moderation down into 2028.

Great. Thank you very much.

Our next question is from the line of Tom Palmer with JPMorgan. Please proceed with your questions.

I wanted to follow-up on Pete's question and clarify on the unexpected inflation you noted in the fourth quarter, really with implications as we think about '26. I think you typically carry more than a quarter's worth of inventory on your balance sheet, and you did give the guidance a month into the quarter. So I'm trying to think through to what extent this added inflationary pressure that maybe had some impact in 4Q might be even more of a consideration as we start out 2026. And kind of in that context, any help on thinking through that mid-single-digit inflation and the cadence of it in the coming year? Thanks.

So we exited the year at mid-single-digit inflation. If you think about Q4 versus the prior years, it was the highest quarter of inflation that we saw coming into our P&L. And that is a combination of tariffs, but also commodity costs more broadly. As you know, we have a broad basket of commodities and source from 80 countries, 17,000 ingredients. We have a broad basket, and we saw inflation in the core commodities, but also tariffs coming in. As well as packaging. We saw packaging as well up in Q4. So we're exiting at a high cost base. As you go into 2026, you know, despite the moderation of tariffs, we'll still see a mid-single-digit inflation hitting the P&L and our expectations into 2026. It could improve, but if it does improve, it will be later in the year. Right now, we're estimating that it's gonna continue to be at the same run rate of Q4 into 2026.

Okay. Thank you for that. And then on the consumer segment, you noted the expectation for volume impact from price elasticity. But recovery subsequently. What drives the price elasticity in the first quarter? And is there anything maybe related to shipment timing when we think about 4Q that relates back to that? Thank you.

Sure. As we think about the consumer business and as we go into Q1 and then we think about the rest of the year, we do expect an impact from elasticities in the first quarter. And I think one of the things that that assumption is really that we have some pricing that we, you know, put in place. Targeted and surgical. In 2025, but we also have additional pricing to come on, you know, beginning in February, which is a reflection of this inflation that we've been referring to as well as the, to some degree, you know, partly offsetting tariffs. And so we expect some of that elasticity impact to really hit, you know, more in the Q1 overall. I wouldn't be surprised if we see volumes either flat to slightly negative in Q1 as a result of that. However, we do expect to sort of then improve upon that as we go throughout the rest of the year, and that there's a transition period we're going through right now in Q1 where we're seeing more pricing come into the shelf just as you try to offset these costs. But then we also have other programs in order to, you know, sort of recognize the reduction in tariffs and everything else that starts to kind of, you know, find its way to, I think, our consumption profile going through the rest of the year. Starting in Q2.

Okay. Thank you for that.

Sure.

Our next question is from the line of Alexia Howard with Bernstein. Please proceed with your question.

Thank you. Good morning, everybody.

Morning.

Morning.

Can we just ask about the sort of you talked about the confidence that you have in the long-term objectives. On paper, you have a number of tailwinds. You're very on trend with consumer dynamics, interest in health and wellness and cooking from scratch, etcetera. The tariffs seem to be easing. Reformulation seems to be picking up. And yet, this seems I think we're now on year five where the earnings expectations are below your long-term algorithm. So I'm just trying to sort of square that away in thinking about what you said at the Investor Day in September, I think, in 2024 about the outlook for 2028. When might we expect to get back on algorithm, and are those 2028 goals still realistic from here? And then I have a follow-up.

Sure. Well, Alexia, let me address the first one then. Thank you for the question. If you reflect back on the targets that we shared at Investor Day, that's reflected obviously, as we called out then, you know, our organic growth ambitions. And, you know, many of those targets were established before the onset of much of this uncertainty that we've been seeing from a global trade standpoint over the last, let's say, year. And also, it was established before the acquisition of McCormick de Mexico. Given everything that's kind of, you know, continued to sort of develop since Investor Day, you know, we are aligning our commentary to the long-term objectives, including organic growth and also accretive M&A. And I think from a sales perspective, we really feel pretty good about being able to hit those targets by 2028. From a top-line perspective. But we're also working very hard right now to offset the impact of what has been substantial incremental costs coming into our P&L over the course of 2025 and also as we look ahead to '26. And so a lot of our focus right now is on additional efforts to address these as quickly as we can. And our plan at CAGNY is to provide more color on, you know, how we look at the entire set of targets that we laid out. To make sure that we have, you know, illustrated sort of any adjustments in our pathway with regard to those targets, you know, set out at Investor Day. I just come back to from a top-line perspective, we feel really quite good and quite confident of our ability to hit those. But we gotta work through right now on a short-term basis, just really the amount of incremental cost activity that we're seeing in our P&L. We have to, you know, we'll provide you more perspective on how we look at that at CAGNY.

Great. Thank you. Can I and a quick follow-up? On the reformulation activity, you've talked, I think, for much of the last year about how that's picking up particularly with private label and with some of your largest CPG clients. You still in investment phase on that because, obviously, you have to go through the process of actually figuring out how the innovation will the reformulation will work before you really get that revenue stream in the door once the product's launched. Is that expected to sort of pick up through the course of 2026?

Yes. If I think I understand the context of your question, Alexia, and let me know if I didn't get it right, it's about, you know, from a development perspective, you know, how are we looking at reformulation activity in '26? But also, I think maybe your question also had to do with if you think about the commercialization of that development, you know, how might we think about that in '26? So if I look at sort of both ends of that question, from a development perspective, I do expect the development activity to continue to pick up. We've definitely seen that as we went through the course, especially the back half of '25. And we expect to see more of that come through in '26. And it is a reasonably, you know, sort of as we talked about before, a big tick up in our activity. I expect that to continue to, you know, increase overall. From a commercialization perspective, sort of, i.e., when it hits the market, I think that's a bit more delayed. I think, you know, late '26 is probably an early indicator when we start to expect to see that, but definitely more in '27 would be my expectation. Particularly as you think about maybe, you know, sort of large CPG customer type activity. At the same time, there's a lot of emerging brand activity going on, and they tend to move to shelf a little bit faster.

Great. Thank you very much. I'll pass it on. Thank you.

Next question comes from the line of Robert Moskow with TD Cowen. Please proceed with your questions.

Hi. Thanks. Brendan, I think Andrew Lazar asked about the Nielsen tracking data for spice and seasonings in The US. And, you know, some weakening sales growth share, you know, share shares are down. Both in our data, both in terms of volume and value. In the last twelve weeks. And I was hoping you could be a little more specific as to whether that reflects what you're seeing or not. And whether there's any implications as to what the sell-through was from your holiday shipments in the fourth quarter? Thanks.

Sure. Well, there's a number of different variables in your question, so I'm going to try and make sure I address them all, Rob. First of all, I'm going to maybe hit the last point first, which is if I think about overall our inventory in the channel, meaning the comparison between our sales and our consumption in the fourth quarter, it is exactly really where we thought we think it should be, and we don't see any anomalies at this point. That would make us think that we have to, you know, speak to any differences that are unusual as we think about, you know, sort of the seasonality of our business. So, that component feels very much in line. Overall. When I think about just overall performance of the fourth quarter, you know, we saw a really very good holiday performance, especially when you look at our business in The Americas. You know, specifically, you know, we were certainly, you know, delivered very much on what we expect would happen both from a price and a volume standpoint. From a sales perspective. But as we think about consumption, we believe that we had, you know, reasonably good, you know, consumption performance. You know, I will say that there was a period there, so many things happen and change obviously in the news, but there was a period there where we saw broadly in the market a bit of a slowdown for probably a couple of weeks related to, you know, sort of the news regarding, you know, SNAP, you know, funding, etcetera. And there was a little bit of a contraction period that we saw there broadly. In grocery, in terms of total results. And so a little bit of a dip, but then things started to come back. As we got closer to the holiday season and we saw consumers really kind of purchase more closely to the holiday, which is reflective of sort of that budget, you know, sort of control behavior or that value-seeking behavior. And so we saw, you know, certainly that type of, you know, profile, if you will, in the holiday consumption, etcetera. As we go into Q1, you know, we still have to wait and see what that post-holiday consumption looks like in terms of do consumers kind of maintain that level, or do they, you know, moderate a little bit after, broadly, what was a successful holiday season. But, also, you know, keep in mind that we expect some price elasticity impact in there too. As we talked about, and we certainly see that coming through a little bit. The price elasticities are operating as expected. So that is nothing that has, at this point in time, let you know, leave us to think that we didn't really have a good handle on what that might be. As we go through Q1, as I mentioned on a previous question, we expect maybe a little bit more variability in terms of price elasticity impact because there is a little bit more pricing coming to shelf as we offset these costs that we're talking about. We are taking a very targeted surgical approach, you know, in our pricing. I mentioned a lot of things there, but I think I'm trying to get at the spirit of your question. Let me know if I did not.

I think that's fine. Alright. Thank you, Brendan.

The next question is from the line of Max Comfort with BNP Paribas. Please proceed with your questions.

Thanks for the question. First, just a housekeeping one on tariffs. So your gross annualized tariff exposure has fallen from $140 million as of last quarter to $70 million today. You also said you expect to book $50 million of incremental tariffs in FY '26. So my simple reading would suggest that this means you expect to book $70 million bricks. Now this would imply you only booked $20 million of gross tariffs in '25. However, I know last quarter, you said you expected to book $70 million of gross tariffs in '25. And it sounds like if anything, it came in higher than that number. So I was hoping you could just give us a bit of clarity. Tell us what was the final gross and net tariff number that you booked in FY '25?

Yeah. Sure, Max. I appreciate this can create a bit of confusion, giving you so many numbers from last year into 2026. So, try to clarify that. So in 2025 first, starting with our last call, was a gross impact of $70 million. And we mitigated $50 million out of the 70 last year. So a net impact of $20 million in 2025. Going into 2026, the annualized number now is $70 million, coincidentally the same. As we have already absorbed $20 million in the base, the incremental growth year-on-year impact is $50 million. So that's our call, the $50 million. And if you look on slide 19, that is a 5% of incremental tariff impact that we're seeing now in '26 versus '25, and we plan to offset most of it as we go into 2026 with the same strategy that we had before, supply chain savings, procurement initiatives, as well as some surgical pricing that will take place next year.

Okay. But I also looked like on that slide that you're referencing that you're offsetting all the tariffs. So if the net impact was $20 million in '25, it looks like the net impact is going to zero in year-over-year terms in '26. Is that fair?

Yeah. That's fair.

Okay. And then just actually one other housekeeping one. Just with regard to your response to Andrew on cadence for EPS throughout the year, it sounded like you were saying EPS cadence will follow operating profit cadence. And I thought you said that operating profit starts off slightly below the guidance in 1Q because you don't have a full quarter of Mexico, which makes sense. Then it also sounded like you said that 1Q EPS is at the mid to high end of the guidance range. So if that's true, why is that? And then I think you said it even builds further from there, which might mean you'd be, you know, towards the high end of guidance for the full year. So I'm assuming I misheard you that 1Q EPS is at the mid to high end of guidance, and maybe it's the low to mid end, but just hoping for more clarity there.

So, yeah. So, it's a little bit of a between OP and EPS. So OP will be soft because of the McCormick de Mexico not being included fully in the base. EPS will be at the mid to high in Q1, and then it will normalize towards the range throughout the year as we said. So it's a Q1, a bit of a different equation between OP and EPS. But then it gets more aligned to the OP flow between Q2 and Q4.

Okay. Thanks very much.

Thank you.

Our final question is from the line of Scott Marks with Jefferies. Please proceed with your questions.

Hey. Good morning, all. Thanks so much for taking our questions.

Sure.

Wanted to just ask a little bit just if we kind of take a step back and look around the world. I know you've made comments about some different regions today. Just wondering if you can share maybe a little bit more detail in terms of how you're thinking about different parts of the world, what is encouraging to you right now? Where do you see some challenges maybe? And just, you know, any thoughts you have on kind of growth profile in '26 in some of the different regions. Thanks.

Certainly. And, you know, what I might do is not speak to The Americas first because it feels like we sort of tended to focus a little bit more on that and some of the questions that we got. I'll start with Asia Pacific. In fact, Marcos and I were just in China two weeks ago. So we've been in the region, and we'll go back out to the region here in a couple of weeks. And, you know, my outlook on Asia overall is I'll focus a little bit more on China and then the rest of that region. We, you know, when we look at '25, got that gradual growth and that we were, you know, out projecting that we would get. And so we feel pretty good about sort of performance, broadly in China. And we still see continued gradual improvement in that marketplace as we look to 2026. The parts of our business that are performing well there are broadly, you know, we feel like we're at continue, throughout the year. See strength in our retail grocery business there. Certainly good trends driven by increased distribution and stronger marketing across that business. We also see strength in the business that we have in the middle of China, which really focuses a lot on more, you know, Chinese cuisine in terms of food service, and catering and a little bit on retail shelves, and that business has been, you know, strengthening. As we, you know, take a look at going from '24 to '25 and then '25 to '26. Our QSR business there is also doing really well, and we see just a lot of strong consumption happening in that channel. The only part of that business that's been soft is really our food service business, which tends to serve the higher-end restaurant more western cuisine, that's been soft just due to a lot of, you know, different, you know, conditions in that marketplace. But overall, we expect China to be doing, you know, reasonably well in terms of slight gradual growth again in 2026. And in the rest of that region, we continue to see, you know, pretty good growth in Australia and in Southeast Asia. And we're still gonna continue to build our plan for India as we've talked about before. I look to EMEA, we continue to see, like The US and The Americas, continue to strengthen our consumer business. It will be volume growth, with some pricing, and that's consistent with what we saw in 2025. And obviously led by continued sort of, you know, all the things that we talk about. Stronger brand marketing, increased distribution, and also, you know, even in those high-growth channels like e-commerce, we see a lot of growth there right now overall in the EMEA consumer business. When I look at flavor solutions there, I do feel like we're going to have a stronger year than we did in 2025 because we just feel like the stabilization of that QSR marketplace, you know, starts to really, you know, show a little bit more improvement. I'm not counting on a lot, but I am counting on it being better than 2025. And that gives us some optimism in terms of that part of our, you know, our segment in EMEA. And then coming back to The Americas, just feel again, you know, a reasonable amount of optimism as you see in our guidance for sales. Both in the consumer business and also flavor solutions for the reasons that I mentioned on an earlier question. I just don't want to repeat all that, obviously. Because it would be redundant. But we feel some really strength there. And, you know, lastly, I'll wrap it up with Latin America and, you know, obviously, the McCormick de Mexico business, and we anticipate having a good year there too. Largely being driven by, obviously, that being the consumer segment.

Got it. Appreciate it. We'll pass it on. Thanks very much.

Thank you.

I have no further questions at this time. I'd like to turn the floor back over to management for closing comments.