Good morning. This is Faten Freiha, Vice President of Investor Relations. Thank you for joining today's third-quarter earnings call. To accompany this call, we have 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 statement, whether because of new information, future events, or other factors. Please refer to our forward-looking statement on slide 2 for more information. I'll now turn the discussion over to Brendan.

Good morning, everyone, and thank you for joining us. Third quarter top-line performance was strong and marked our fifth consecutive quarter of volume-led growth, reflecting our differentiation and the benefit of continued investments in our brands, expanded distribution, and innovation. Due to the dynamic global trade environment, our gross margin was further pressured by rising costs. However, our effective execution on efficiency initiatives drove continued operating profit growth. We are executing with discipline on the actions within our control, while adapting quickly to the dynamics in the external environment and, at the same time, positioning McCormick & Company for sustained long-term growth. This morning, I will begin my remarks with an overview of our third-quarter results, focusing mostly on top-line drivers. Next, I will review how McCormick & Company is positioned relative to an evolving consumer landscape for the remainder of this year and into 2026. I will highlight some areas of success and the areas we continue to work on, as well as our growth plans. Marcos will then go into more depth and review our 2025 outlook, including an update on our tariff exposure and mitigation plans. Finally, before your questions, I will have some closing comments. Turning now to our results on slide 4. In the third quarter, total organic sales increased by 2%, driven by volume growth, primarily in the consumer segment, in line with our expectations. In global consumer, organic sales growth was volume-led and demonstrated continued momentum across key markets and core categories in the Americas and EMEA. In Asia-Pacific, our China retail business continued to deliver growth. However, our food service business, which is reported within China consumer, faced softer demand due to slower consumption in certain channels, such as high-end dining. Despite this unforeseen headwind, we remain confident in a gradual full-year…

Thank you, Brendan, and good morning, everyone. Let's start on slide 8. Total organic sales grew 2% for the quarter, driven by volume and mix. This reflects total volume-led growth for the last five quarters and underscores our differentiation and ability to drive growth, even in a consumer backdrop that remains challenging overall. Moving to our Consumer segment on slide 9, organic sales increased 3%, driven primarily by volume and mix, with minimal benefit from pricing. Consumer organic sales in the Americas grew 3%, with 3% volume growth and flat pricing. Volume growth was strong across our core categories and was driven by our investments in brand marketing, innovation, and category management. In EMEA, we grew consumer organic sales 4%, driven by a 1% increase in volume and a 3% increase in price, related to targeted actions taken as a result of increased commodity costs. We're pleased with the sustained volume growth in EMEA, despite price increases. Consumer organic sales in the Asia-Pacific region decreased by 1%. This decline was driven primarily by softness in the food service business in China that Brendan mentioned earlier. Turning to our Flavor Solutions segment on slide 10, third quarter organic sales were up 1%, driven by price contributions of 1% and flat volume and mix. The volumes for the quarter were impacted by unfavorable comparisons related to the timing of customers' activities in the prior year. Underlying volume was positive for the quarter. In the Americas, Flavor Solutions' organic sales increased 1%, reflecting a 2% price contribution, partially offset by a 1% decline in volume. Our results include the favorable comparison I mentioned earlier and reflect a strong performance with faster growing flavor customers and continued QSR growth, partially offset by softness in CPG customers' volumes. The price contribution is primarily related to…

Thank you, Marcos. Before moving to Q&A, I would like to close with our key takeaways on slide 17. We expect to continue to execute our proven strategies in alignment with consumer trends and with speed and agility. The long-term trends that fuel our attractive categories, consumer interest in healthy, flavorful cooking, flavor exploration, and trusted brands, are enduring trends. We continue to drive differentiated volume-led top-line growth and share growth gains across our core categories. Our results demonstrate that we are investing in the areas that drive the most value, and we expect to maintain this momentum. Similar to many of our peers, we are facing rising costs due to the global trade environment, and we are leveraging our competitive advantages and cost-savings initiatives to lessen the impact of these costs, maintain our volume momentum, fuel our investments, and drive profitable growth. Importantly, we view tariffs as a discrete headwind to work through. However, we remain committed to our strategic priorities, sustaining a healthy top line, investing in the business, and maximizing profitability. Ultimately, we believe the execution of our growth plans will be a win for consumers, customers, our categories, and McCormick & Company, which will continue to differentiate and strengthen our leadership. Finally, I want to recognize all McCormick & Company employees for their dedication and contributions and reiterate my confidence that together we will continue to drive differentiated results and shareholder value. Now for your questions.

Thank you. We'll now be conducting a question and answer session. If you would like to ask a question at this time, please press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you would like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. The first question comes from the line of Andrew Lazar. Marc, please, you should see your question.

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

Good morning.

Brendan, you reiterated again today your expectation for positive volume in the consumer segment in your fiscal fourth quarter. Volume in consumer was again positive in 3Q, but did decelerate sequentially from 2Q, and we see that a bit in the recent data too. I guess now that you'll have some incremental pricing flowing through in the fourth quarter, what's your visibility to a positive volume outcome, you know, given potential elasticity? What are you seeing in the quarter so far around elasticities, given you're kind of more than a month in?

Thanks for the question, Andrew. This was another strong quarter of sales growth for us, and our consumer business continues to drive differentiated performance, really driven by volume. Our flavor solutions business is too. We can talk more about that if necessary. When I think about any deceleration that you might have noted, I think that's a function, first, just of overall food unit growth being down in the quarter, like almost a full %. That's going to impact us a little bit in terms of some element of deceleration. I see that less as a consequence of our plans and our activity, but more about what's just going on broadly in grocery and food in the industry. We definitely saw a deceleration overall in the third quarter. Having said that, we're working with our customers to identify the appropriate offset for the impact of tariffs. As we've been talking about pricing in consumer, we're focused on maintaining our volume momentum and ensuring that we have the right price at shelf that meets the consumer demand for value. We're pleased with the way those conversations have gone. It also demonstrates broad consumer customer alignment with our approach. I think both of us are committed to making sure that we maintain consumer affordability in our categories. That's an underlying element with regard to our consumer base. In the fourth quarter, the levers that remain in place will be continued increased investment in AMP. It'll be messaging that resonates and is targeted and digitally enabled. We'll continue to benefit from innovation launched in 2024. That's items like Frank’s squeeze bottles, new flavors of Frank’s RedHot, and Cholula Extra Hot is out there also on shelf. It's going to get some benefit year over year. Price gap management remains part of our baseline…

Thanks for that. Appreciate it. I know it's way too early to get specific on fiscal 2026, but obviously you would seem you'll still have some underlying inflation to deal with as well as incremental tariffs. At this stage, how do we think about the magnitude of potential further mitigation opportunities in both CCI and RGM levers, as we all sort of work through whether or not an algorithm year is reasonable to expect in fiscal 2026? Marcos, I think you mentioned some of your current mitigation efforts are not permanent, and so you have to kind of keep generating incremental ones as you go forward. Yeah, Marcos.

Yeah, that's right, Andrew. Yes, it is a little bit early to predict what's, you know, the exact impact of tariffs for 2026. We wanted to provide an updated view of the growth number. There is $140 million now versus the $90 million that we provided before due to the new tariffs that were in place as of August. We'll continue to, you know, there are a lot of factors that we have to take into account as we think about next year. One is obviously closing the year, continuing to monitor the tariff rates and the situation around that. There could be potential changes there. Our own mitigation plans, we have very solid mitigation plans in place right now, as you saw, around productivity savings, alternative sourcing, as well as surgical pricing coming through. We're being relatively successful this year, offsetting most of the impact in 2025. Those will continue. We're going to scale that up into next year. They will continue. The objective is really to lessen the impact as much as we can going into next year. As I said before, we're pulling all the levers that we can across the P&L to minimize all these impacts. We'll continue to monitor the plans that we have now in place, some pricing now coming in Q4. We do have robust analytics, as Brendan mentioned, in terms of elasticity. We're going to continue to monitor elasticity. That will also help us refine the plans as we go into 2026. I would say we are confident that we are going to be able to lessen the impact as we move into 2026.

Yeah, one thing to add to Marcos's remarks there, Andrew, is we meet on this weekly. We see changes every week as we continue to go through this and identify new opportunities and breakthroughs in terms of how we can think about next year. This is something that I think we'll continue to build over the next few months just to make sure that we have the best approach towards 2026 regarding the incremental tariff impact.

Thank you.

Our next question is from the line of Peter Galbo with Bank of America. Please proceed with your questions.

Hey, good morning, guys. Thanks for the questions. Marcos, I was hoping to start. You took the cost inflation guidance for the year up, even excluding the tariff in 2025. Maybe you can just unpack a bit of what actually accelerated through the quarter, what's kind of driving that change again, given that it seems like it's not solely tied to the increase in the tariff rate.

Yes, Peter. No, thanks for the question. I mean, in Q3, just to take a step back, in Q3, our gross margin was down 120 basis points versus last year. A couple of buckets, I would say. The bucket number one is around increased commodity costs and existing and new tariffs that were in place, existing from April, new tariffs as of August. That is about two-thirds of the impact that you saw in the quarter. In addition to that, the remaining one-third was related to costs to support capacity for future growth, primarily related to our HEAT platform. That is investments that we're putting within supply chain. As I alluded to in the Q2 call, as well as in the last investor conference, we were seeing the rise of commodity costs in Q2, and they actually accelerated in Q3. Plus, the new tariffs in place made us revise the guide. It was, I would call it, a modest update to the guide to reflect those impacts. It is around commodity costs and tariffs primarily, but also we are seeing input costs in general coming through. Packaging is one example that we're seeing come through. All in all, we've revised the guide a little bit as a way also to provide the latest view that we have, but also to be able to continue to invest in the business and giving us the flexibility and the latitude to continue to invest in brand marketing in Q4.

Thanks, Marcos. Maybe a follow-up also on the gross margin. I mean, I think even with the revised guidance that you provided this morning, it would imply that the fourth quarter gross margin needs to step up closer to something like 41% to hit comparable for the year-on-year. That would not only be a normal, I think, sequential step up into Q4, but it would be margins actually up versus the fourth quarter of last year. A, I just want to make sure that I have that right, or if there's any nuance as we think about the fourth quarter gross margin specifically. Thanks very much.

Yes, Peter, you're seeing that right. I mean, we're seeing the flat to modest bps as a % of net sales expansion in the fourth quarter.

Thank you.

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

Good morning. Thanks for the question. Maybe first, I just want to clarify on tariffs. A quarter ago, I think the expectation on kind of round one was to fully offset it both for this year and for next year. I know the number has moved higher. When we think about that initial number, does that still hold? You would expect to fully offset it. Now there are maybe more decisions still to be made in terms of your ability to fully mitigate the incremental step up that we've seen since.

Let me just give you a little bit of color there, Tom. I mean, when we talked about the $50 million for in-year, the year-on-year impacts before, and the $90 million for 2026 at that time, we talked about offsetting 2025, the $50 million in 2025 only number with the mitigations that I mentioned before, and continue, obviously, to work through the mitigations going into 2026. We did not talk really much about 2026 or the annualized net impact going into 2026 as we're still working through those mitigation plans.

Okay, understood. On the gross margin for 3Q, look, maybe the street misunderstood, but I think we were looking at more flattish year-over-year initially for the third quarter. It does sound like tariffs were an impact. I guess I'm trying to understand the timing of how it flowed through so quickly in 3Q. I think a lot of the step up was more August, and I would have thought more of a lag in terms of how it flowed through COG. What really was the incremental step up to think about in 3Q versus more of this increased tariff burden really kicking in come 4Q?

Yeah, you're right. I mean, tariffs was a piece of that. The new tariffs was a piece of the impacts in Q3 as tariffs came in in August. The main impact was higher commodity costs that accelerated in Q3. When we were guiding Q2, we talked about guiding the profitability to be more weighted towards Q4. We were seeing some of the rise of commodity costs in Q2, and that would impact Q3. In fact, it accelerated, and we saw more inflation come through this quarter than we expected.

Tom, just to build on a little bit of what Marcos said, when we think about this incremental commodity cost that we're definitely observing, I would say there's sort of two drivers to call out. There's broad uncertainty that's kind of driving suppliers to stand still. They're pausing and waiting for more information to see how the market moves. I think this slows down typical forces of supply and demand. That's definitely been an element that we've seen even as early as the second quarter. More recently, we certainly start to see that they're passing along their tariff impact, and it's expressed as our overall inflation, although indirectly, that impact coming through tariffs. We have a very diverse basket of commodities and input costs, and this is where we're seeing this come through.

Okay, thank you for the details.

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

Good morning, everyone.

Good morning.

Good morning.

Can I start with the reformulation comments you made in the prepared remarks? Specifically, you talked about gaming customers on the flavor solutions side. Which customers or what types of customers, what types of categories are you gaming the customers in? I'm particularly curious about, Walmart announced last week that I think across the whole of their private label business, they're planning to eliminate 30 additives, which is much broader than the eight artificial dyes that have already been put on the chopping block for 2027. Do you expect to see an acceleration in private label and maybe branded CPG efforts to reformulate, particularly in light of that Walmart announcement? I have a follow-up.

Sure, Alexia. There's a couple of vantage points in your question there. I'll try to address most of them if I recall them all. First of all, you asked where are we getting the new customers or where are we getting this increased share. A lot of that's happening with what we said earlier, which is high growth innovator, emerging brands, and even private label customers. We definitely see continued accelerated growth in that part of our customer portfolio. Even an increasing amount of that started to come through in the third quarter. That's consistent with what we've said previously when we think about where new customers are coming from overall. In terms of the heightened reformulation activity, this is consistent also with what we said in the second quarter. It's a focus on a shift from natural colors from synthetic ones. It's also reduced sugar, reduced salt, natural and healthy ingredients from artificial, eliminating ingredients of concern. That's the type of activity that we're seeing. It's somewhat expected, I think, with what you've seen broadly reported in the media in terms of where consumer concerns are. I would just say a lot of this is based in just staying close to the consumer. A lot of the food industry is focused around that. We've been looking at this and working on it for some time. Related to the announcement that you talked about, Alexia, I think that's good news in terms of an announcement from that large retailer. That's an example of the type of activity that I think that one will see. It's consistent with what other branded CPG companies have announced more recently. You said you had a follow-up question.

Yes. I want to ask about acquisitions, and I'm trying to figure out how to answer this delicately. You obviously already got your Mexico JV announcement out there. That's set up for early next year. There's concerns that I've heard from investors about whether you might be interested in the very large taste elevation company that will be split off from Kraft Heinz's North American grocery business next year. Frankly, on paper, it's two and a half times the size of McCormick & Company. It's on both the top and the bottom line. It looks too big, even though the Heinz brand might be quite attractive. Could you talk about maybe just in broad terms what your acquisition strategy is and the magnitude of the types of deals that you might be prepared to take on, maybe taking that one off the table because it just looks so vast? Are you interested more in condiments at this point, maybe at a more bolt-on level, and/or other capabilities that you need to pick up on the flavor solutions side? I hope that was delicate enough, but anything you can say on that front would be helpful. Thank you.

Appreciate the diplomatic question. When we think about M&A, we don't comment on any speculation going on out there or anything of that sort. I'm not speaking directly to any investor concern or whatever it might be. I would tell you just broadly to go back to what we said previously about how we think about M&A. Obviously, we think about both of our segments first, consumer and flavor solutions. I'll first unpack consumer and then I'll unpack flavor solutions because they're both important to us. We still believe in our two-segment strategy as we look at our business. We'll consider both bolt-on and transformative opportunities as they present themselves. This is something that we're working on all the time, as we said before. From a consumer perspective, the two areas that are of most interest to us as we think about our portfolios remain focused in flavor. In many ways, we express that through herbs, spices, and seasonings at a global level, as well as condiments and sauces at a global level. We're thinking about this across all of our regions overall. We like those two areas of category focus, and we believe there's a lot of opportunity still for us to think about it that way. It can be in any form, whether it be bolt-on or transformational overall. When we think about flavor solutions, we think about it through the lens of what enhances our ability from a technology standpoint, the taste competencies that we're particularly strong at. Can we reinforce those with not only great technology, but also great talent? We think about it that way in terms of what is a complementary or incremental fit to our business when we think about flavor. We think about those across all the regions in which we compete and operate in. That's another high area of interest that we have across our business. We have a broad set of opportunities that we look at. We like the fact that we have a broad set of opportunities to consider. Our most recent transaction we think is very much aligned strategically with what we're trying to accomplish. In the present moment right now, we're focused on making sure that we close that in early 2026, which is our plan.

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

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

Hey, good morning. Thanks for the question. Hey, Brendan, it's very noticeable in the remarks that you're highlighting the importance of differentiated volume-led growth compared to food peers. You're heading into an environment where you definitely need more pricing to offset higher costs. I'm just curious if you could articulate your priorities. It sounds like if the priority is really volume growth, to what extent are you willing to let volume dip into negative territory, maybe even just temporarily, as you try to raise prices to offset costs?

We try to balance all those two points that you brought up, Robin. We take a very long-term view. I'm not going to lay out here the certain numbers and where they can land, etc., in terms of growth or decline. Our goal right now is consistent with our goal for the last two years, which is to be volume-led in terms of our momentum and take a long-term view on making sure that we do what's right as we think about growth of the consumer, meeting their needs, meeting the benefits that they're looking for. We've seen a real convergence around value, but also health and wellness. Those are things that we think will continue to drive our categories. Yet we have to deal with the realities, obviously, of offsetting what is a reasonable amount of discrete new costs coming into our P&L as we think about 2025 and 2026. So far, we've been able to find a way to offset that in really productive ways, but yet still maintain that focus on really healthy volume-driven growth. As we go into 2026, our ambition is to do the very same thing. Do I know exactly what level that will be? I don't. I think it'll be in positive territory. I can't tell you right now how high. That's going to be part of what, as we wrap up our planning for 2026, we'll share at the end of our fourth quarter and our fourth quarter call in January. This is something that we talk about a lot within the company, leadership and across our business units, and think about the right balance that we need to strike. It's also a function of the conversations that we're having with customers. We're both looking at it in very much similar ways, which is we want to drive affordability for consumers. We also have to find ways to offset this cost. I'm not sure that we're going to offset all of the cost, but it is something that we are taking a very hard look at in terms of what's striking the right balance.

Thank you for that. Maybe a follow-up. In those conversations with customers, I would imagine they're a little bit less willing to raise prices for tariffs, given that the tariffs may not be permanent. Is that part of the discussion too? Can you come up with temporary measures with customers that can be reversed if necessary?

One adjustment to some of the assumptions you laid in your question there is whether or not tariffs are permanent. We're seeing it as a discrete one-time impact at this point, and we do view those as staying in the cost structure. Whatever we do, whether it's in the near term or in the long term, we look to offset that over time overall. In our conversations with customers, we think very collaboratively about how do we deal with what are real true input costs, but also thinking about continued volume growth with consumers. That mutual sort of alignment around priorities, I think, has helped us navigate what have been productive conversations with customers.

Got it. All right. Thank you.

Our next question is on the line of Max Gumport with BNP Paribas. Please proceed with your questions.

Hey, great. Thanks for the question. I wanted to come back to what we're seeing in the U.S. scanner data and then thinking through how to square that with your still robust volume-led growth in Consumer Americas. Specifically, Consumer Americas, the volume growth still looks quite strong, running roughly 3%, roughly similar to what we saw in 2Q. I think it's fair to say that U.S. scanner data has shown some deceleration from 2Q to 3Q and now into the early starts of 4Q with regard to volume performance. I know you mentioned that you can attribute part of that to just what we're seeing in the broader U.S. food industry, but when we're thinking through why that gap is not showing up as fully in your Consumer Americas results, can we attribute it to other countries outside of the U.S., or is it non-track channels, or is it the stronger performance we're now seeing from private label? Just trying to get a sense for what's helping to blunt the gap that we are seeing or the slowdown that we are seeing in scanner. Thanks very much.

Max, I just want to clarify what I think your question is, which is speaking specifically to U.S. perspective or broadly globally.

Yeah, it's really looking at, I think, what is a pretty clear slowdown in the U.S. scanner data for McCormick branded, but not as clear a slowdown in your Consumer Americas results. I'm trying to understand why those two are no longer as tightly correlated. What's propping up Consumer Americas when we are seeing a slowdown in McCormick's branded U.S. meal?

I think my reply might get at the spirit of your question. In terms of, you know, sort of if you think about measured channels and unmeasured channels, we are seeing an acceleration in e-commerce as well as in the club store channel too. That might speak a little bit to, you know, what might be sort of any difference that you might see, Max, overall. Also, we have our Canadian business in there too, and it's also performing well. I think that those might, you know, from a, if you think about what might be the points to talk more about, I would just lay out those three. I might just sort of, you know, dwell a little bit on e-commerce. We're certainly seeing an acceleration there. We're seeing, what's interesting about value with consumers is they're willing to pay for this increased value on delivery, you know, the sort of ease of use with e-commerce and, you know, click and collect, etc. That has been part of our business that is only quarter by quarter, just continues to get stronger. It's certainly growing as a percentage of overall total net sales. I think this unmeasured versus measured channels might explain, you know, some of the points that you're talking about.

Okay, great. There was some more growth shift towards unmeasured.

Right. Turning to cash flows, I realize you started off the year pretty far behind where you were a year ago. You're catching up now as of 3Q, but you're still a bit below where you were a year ago in terms of operating cash flow. You're still attributing it to higher cash needs for working capital. Can you just double-click on what exactly within working capital is driving this and how you expect to end the year of 2025? It sounds like you do expect this from cash flow year. We're just hoping to throw a little bit more color on the working capital needs and what you expect to see in 4Q. Thanks very much.

Yes, Max, I mean, that's a good question. We have very strong confidence about the cash flow for the year. As you said, we are catching up now in Q3 year to date. We had a bigger lag in Q2. We got caught up a little bit more in Q3. We had a little bit more use of working capital through inventories. We purchased some inventories, bought some inventories, specifically from raw materials in the quarter. We expected this to normalize going into the back half of the year and continue to deliver very strong cash flow performance for the full year 2025. Just to recall, Q4 is our biggest quarter, not only in terms of P&L, but also in terms of cash. You will see that cash come through in Q4.

Great. Thanks very much.

The next question is from the line of Steve Powers with Deutsche Bank. Please proceed with your questions.

Thanks. Good morning, guys.

Good morning.

Good morning.

I think we've been circling around this a little bit. I just want to get a little bit more sense of your planning posture around pricing as you begin to implement pricing in response to tariffs. Focusing on the consumer business, maybe a little bit more detail on what you've seen so far in early elasticity analytics and where you think consumers are likely to be more accepting of pricing versus more price sensitive. I guess just what your kind of going in base case expectations are around elasticity as you layer in this early pricing.

Steve, it's really early. In fact, I don't even think we've got a whole lot of, we've got a little bit of data maybe on September that would maybe give us some indication. What I would share with you right now is it's too early to give you any sort of real insight around trends or outcomes regarding that. We believe in the analytics that we use to predict these things. I would say that right now we feel really pretty confident with what we think the impact will be, but it is very early.

Okay. Maybe, you know, Marcos, as we think about 2026, and you talked about sourcing and productivity, cost savings, as well as pricing as the different levers you have to mitigate cost inflation and tariffs into next year. As a starting point, is your kind of working assumption that there's a balance, kind of an even balance between pricing and some of the sourcing and savings initiatives, or is it skewed towards savings, or is it skewed towards pricing? Just a little sense of early planning thoughts as you approach the year.

Yeah, it is. It is, Steve. It is more skewed towards savings. You know, CCI savings overall. We talked about productivity savings as well as alternative sourcing, but also think about it as a way of all lines of the P&L, CCI across all lines of the P&L. You've seen this quarter as Shanay came in, it's strong for us. We continue to drive, you know, CCI savings in that part of our P&L. That should continue going into 2026. I would say it's more skewed towards savings and productivity initiatives that we have in place, with more to come. The residual will be through surgical price initiatives.

OK, perfect. Thank you very much.

The next question is from the line of Scott Marks with Jefferies. Please proceed with your questions.

Hey, good morning. Thanks so much for taking our questions. First thing I wanted to ask about, you noted some softness in the China food service arena, still expecting a gradual recovery for the rest of this year. It sounds like maybe a little stronger for next year. Just wondering if you can share some thoughts on what you're seeing and what gives you the confidence in that gradual recovery continuing. First, our third quarter results were definitely impacted by what we saw as a reaction to these austerity measures that were put in place. A lot of it was focused on high-end dining and catering. We saw that consumption shift out into other out-of-home channels that might be either lower cost or greater value. We have diversified. That tended to impact the part of our food service business that serves that part of the marketplace. As we think about diversifying and also looking for more distribution, we're certainly following those trends in the marketplace. We're also seeing strength in our retail business. Our team identified a lot of high-growth opportunities as we think about the channel shifting that's going on in China. There's quite a bit of it, and it's been going on for at least the last year, if not longer. We continue to strengthen distribution in those areas where we think consumers are shifting to. In the case of our retail business, it happens to be more smaller format stores. Getting more distribution in those locations has helped us continue to drive growth, which we think, based on the data that we're seeing, is slightly stronger than the marketplace itself. That gives us the confidence to think about, for the total year, we think we're headed in that same direction with having that slight to gradual growth in our business in China. It's also worth adding that as we look at the fourth quarter, we're lapping an easier comparison relative to the fourth quarter of the prior year. Year to date, our results are in line with our expectations for this gradual recovery. I think we're up like 2% year to date within total Asia-Pacific. We do expect our business in China to improve slightly in the context of that. Long term, we believe in the opportunity of China. It's a strong market where we have good penetration right now, but we still have room for growth. We're strengthening our plans and capabilities to make sure that we serve the Chinese marketplace where we see opportunities.

Appreciate the answer there. Thank you for that. Just a quick follow-up, coming back to the topic of reformulation, wondering maybe if you can give us a sense of magnitude of impact, let's say, for the reformulations as it relates to maybe more pressure on some of the legacy branded products. Just trying to gauge how we should be thinking about offsets to what we see from broader food softness, let's say.

I think about reformulations as broadly continuing to address what we hear from consumers and what they're looking for. That will have a positive impact on brands, whether it be so-called legacy brands or even new emerging brands. As broadly the food industry continues to address what consumers are asking for, we see that as having a positive outcome. The magnitude, I probably would maybe shift my reply into think about it from a timing perspective. It may take some time for some of these larger projects to go through validation and get out into the marketplace. I don't see it as being necessarily immediate or happening right away. In the case of announcements that have been made, people are suggesting 2027 as an example. Every company is going to be different in terms of what types of changes and reformulations we're trying to drive. I see this as a continuation of innovation within the industry. It's all about making brands relevant.

Thanks very much. We will pass it on.

Thank you. Our last question is from the line of Brian Adams with UBS. Please proceed with your questions.

Hey, morning, guys. Thanks for the question. Just a quick one here for me. On the 4Q growth, I think if you look at what you said, Marcos, about midpoint or better of the 1% to 3% top line guide for the year, it implies something like 2.5% or so growth for the fourth quarter or more. Just in terms of that improvement exiting the year, I assume that's mostly pricing net of any elasticity impact, along with maybe some of the easier 4Q Asia-Pacific comp that you just mentioned, Brendan. Beyond that, is there anything else I'm missing there in terms of what drives the conviction to step up in 4Q versus 3Q? Thanks, guys.

Yeah, we talked about the midpoint of the guidance range on top line for the full year. That implies the same level of growth in the fourth quarter in constant currency, obviously. That will continue. We still, despite the price increases that we've taken in the Americas, also see volume growth in the Americas. We see growth across, I would say, pretty much all regions in the consumer segment going into the balance of the year. In flavor solutions, you will see more of a moderation of volume and price. We guided price to be, volume to be flat in flavor solutions for the full year, given a little bit more pricing there. That's how we're seeing Q4 play.

Really helpful. I'll leave it there. Thanks, guys.

Thank you. I'll now turn the floor back to Faten Freiha for closing remarks.

Thank you. Thanks, everybody, for joining today's call. If you have any additional questions regarding today's information, please feel free to contact me. This concludes this morning's call. Thank you.