[Operator Instructions] Our first question comes from Bonnie Herzog from Goldman Sachs. Unfortunately, we can't gain connection with Bonnie. Our next question comes from Filippo Falorni from Citi.

I was hoping you could give a little bit more color on the category growth expectations, including the beneficiary from the World Cup in June and July. And then any additional comment on the market share performance that you're expecting going forward in the balance of the year?

Filippo, thank you for the question. So maybe I'll address a couple of things. I think it was a little bit of what's happened and what's going to happen. So if you think about Q2, Tracey talked about the category based on internal estimates, so it was in the minus 4.2% range, Filippo. The World Cup, obviously, was a great occasion from a beer perspective, right? It was a great opportunity for us to showcase our brands, bring people together. But it probably did not have that big an impact across the entire category. If you think about on- and off-premise, what we did see from the World Cup is strong results in host cities and particularly on the on-premise. So if you think about on versus off, 14-ish percent versus off, we didn't see a massive impact of the World Cup across the entire country. So in those host cities, in the on-premise, it was a great opportunity to showcase our brands, bring consumers into the category and really have a great occasion to get our brands performing. So I would say that would be the World Cup assessment. I think your question then around the category. If you think about 2026 versus 2025, we still believe the category is going to be healthier than 2025. It is going to be -- continue to be a volatile year, you saw the changes in Q1 versus Q2 driven by macro issues, fuel prices, et cetera. So for us, it is a little bit of -- we'll keep close to where the category does in Q3 and Q4. But importantly is what are we going to do about it? And I think that's why your question around market share comes in. I go back to our portfolio. I mean we've got a pretty broad set of brands across different price points. And so that gives me confidence that going into the next quarter, we can continue to make progress. And if you look at Q2 versus Q1, we modestly gained share. If you look at our different parts of our portfolio, we made some good progress in our Value segment. We made some good progress in core in the Coors trademark, Above Premium beer and then also the beyond beer stuff. So we're making progress from a share perspective. We want to continue to make that progress going into Q3 from different parts of our portfolio. But the category volatility will react to how the category behaves. But probably, it'd still be better than what 2025 was.

Our next question comes from Peter Grom from UBS.

I actually wanted to ask a follow-up to Filippo's question just on the category. And you noted the weaker performance in Q2, and this may be hard to do, but -- is there a way to kind of parse out the impact from higher gas prices, maybe some unfavorable weather versus maybe some shifts that may be more structural? And I just asked that in the context of I think people were hoping that the category would be stronger in 2Q, but obviously, you saw a meaningful deceleration. And then I guess, underpinning the back half, I mean, I understand that for the full year, you expect it to be better than the down 5%. But should we be expecting a continuation of kind of maybe what we saw in Q2 from a category standpoint?

Yes. I think -- Peter, I think, your question around the category, parsing out higher gas prices and impacts is, I would say, it's a tricky thing, right? Because maybe I'll explain it in a different way. So if you think about coming into this year, consumer confidence, a little bit of clarity in terms of consumer sentiment and how people were making decisions. I think you saw the category being healthier than Q1. As we get into Q2, I do think you saw different behavior from consumers, when things like gas prices, et cetera, are impacted. We saw that in pack data. We saw that in channel data. So there was definitely a pullback. I'd just go back to occasions, right? I mean the World Cup, again, was a great opportunity for bringing people together from a beer perspective. But maybe a little deeper into performance of the category. If you look at some of the channel-specific data, convenience and dollar continued to do well in Q2 versus food and grocery. Singles and small packs did well versus some of the other packs. So folks were making choices in a way differently in terms of their expendable income. Now on the other hand, I would call out the consumer that is continues to grow from a premiumization perspective, right? So Above Premium portfolio with Peroni and Fever-Tree continues to see growth. So that consumer is resilient, is healthy. The on-premise performed better than the off-premise overall for the category. And that's also a good sign in terms of consumer health in that regard. So hopefully, that gives you a sense of some of the levers and the drivers in the category for Q2. Your second part of the question is, I think that macro impact, oil prices, sentiment is probably going to be an important aspect as we think through H2, Q3 and Q4. But then I go back to our portfolio, right? Our portfolio is pretty broad. It is encompassing different price points, and it gives -- that gives me confidence and it gives us our ability to lean in differently, right, whether it's the Value segment with pricing, whether it's our Core segment with Coors Light, Miller Lite with price pack architecture, and then it's obviously leaning in with Above Premium beer and beyond beer. So the category will stay volatile, will stay, I would say, better than '25, but we got the different tools, different brands, different parts of our portfolio to lean in differently and continue to execute, right? And again, I think the previous question about, we got to keep showing share improvement that we've done now Q2 versus Q1, and we're going to keep leaning into that for the balance of the year.

Our next question comes from Robert Ottenstein from Evercore.

Great. And I missed the first part of the call, so excuse me if you already addressed this.

Apologies, Robert, we lost connection. We'll now move on to our next question from Chris Carey from Wells Fargo.

Hopefully, you don't lose connection with me.

Chris, we hear you loud and clear.

Okay. All right. Wonderful. I wanted to ask about the evolution of the inflation expectations. I think, I heard, Tracey, you say $150 million, the slide say, $130 million for a Midwest Premium impact. But maybe just conceptually, inflation is the expectation now that it's running higher for the full year than the prior expectation? How did that impact your outlook for COGS per hectoliter? And then similarly or conversely, you're expecting, I think, maybe a slight decline in MG&A on the full year, confirming if that's correct? And where does that savings come from relative to prior expectation? And maybe importantly, I'm just starting to think about the path into 2027. Can you just perhaps give us any construct for how to think about your ability to be hedging some of the cost increases that you have seen going into next year? I think you had mentioned that you'll take maybe a pricing in line with similar levels in the fall. And so how do you really think about starting to get ahead of some of the cost curve as you go into 2027? I'd love any thoughts on that. So thanks for the balance of COGS inflation versus MG&A and how the path unfolds.

Chris, thank you. A number of different parts. So I think I captured all your pieces. So let me address that. And Tracey, please add enough after this. So if you look at this year, '26, obviously, when we laid out our '26 guidance and we shared our plans, we knew we were stepping into this year with a high inflated cost base in terms of Midwest Premium, LME, just the inflationary impact this year. So -- the way I would call out H1 is, I think the teams have done a good job of managing that within the framework that we had laid out, right? So between all the volatility of aluminum pricing and Midwest Premium, the teams have done a good job of managing our COGS per hectoliter. The one thing that we did see a little bit more elevated levels now is fuel costs and logistics costs, right, where logistics companies, transportation issues are proving to be a little bit more challenging. But I would put all of that under the bucket, Chris, focused on cost management, focused on our savings program and managing through that. So for the balance of the year, if you think about our COGS per hectoliter, we're probably in line with what we've said, and I'll let Tracey give you some specifics on that. But it's a combination of, yes, elevated levels, still a lot of volatility, but working through the levers we have. To address your question around MG&A, there's a number of factors that go into our MG&A for the balance of the year, right? So it is our investment in tools and technology capabilities, obviously, the cost savings programs that we announced and initiated both last year in the Americas and earlier this year in the EMEA and APAC, right? So that all starts playing out in the balance of the year and then making sure we have the right brand support in making sure we're investing behind our brands for the balance of the year. So for MG&A, just there's a number of things we put in place and obviously to be disciplined around our cost base. You probably saw that in the context of our EMEA business results. So that's how I would characterize the whole MG&A line. I know we don't talk a lot about '27, but it's an important as we execute on '26. We're obviously thinking through what does that inflationary landscape look like for '27 and going back from making sure we have the right brand investment and support for our portfolio. This is a competitive landscape, but we're going to lean in from a portfolio investment for '27. So more to come on '27. But hopefully, it gives you a sense on '26 MG&A. And Tracey, any more things to add on COGS?

Yes, just in terms of the Midwest Premium impact, Chris. So if you remember, our initial guidance assumes that the impact of Midwest Premium would be at least $125 million. Our latest estimate now is above $130 million, so 1-3-0. And so we do -- I mean, Midwest Premium has not come down. Commodity costs are going up. So we do assume that Midwest Premium and base aluminum will be elevated versus last year. And again, the Midwest Premium impact for Q2 for us was $40 million. So we do have hedges on for Midwest Premium that is going to help mitigate some of these increases. But as we've said before, it's very difficult, it's very expensive. It's not a liquid market. It's not a transparent market. So we also are using our cost savings program, which we've mentioned to help mitigate some of this inflation. But we do have good line of sight to the balance of the year. But again, continue to see elevated commodity costs, particularly the Midwest Premium.

Our next question comes from Kaumil Gajrawala from Jefferies.

I guess, a couple of questions. We hear about buybacks, dividend, balance sheet, cost cutting, many of these things, which are great and support the stock, but there's a -- there's an essential volume area to focus on. And while you've talked about it a bit, do you feel like that's sufficient? Like is now the right time to be cutting costs or buying back shares as opposed to maybe really stepping it up in a more meaningful way in your investment behind a series of brands, including really galvanizing some of the ones that are working like Peroni or Coors Banquet or figuring out how to be more relevant in other spaces where some of your brands aren't?

Yes, thank you for the question. Absolutely focused on the top line, Kaumil. I mean if you think about our plan, I mean, we are grounded on making sure our brands are the key drivers of our business in the future. So let me maybe explain how we think about our top line and our brands, right? So obviously, we are -- we have core brands in categories that are under pressure. So the way we think about it is obviously making sure we are supporting those brands well. So whether it's Coors Light, Miller Lite, things like Banquet and making sure we have the right level of marketing investment against them. We showed up for our big brands in a big way this year in live sports. So World Cup was one example. But for the balance of the year, we're going to show up in NFL football, college sports, MLB, soccer, et cetera. We're going to continue to lean in investment in things like music. So the investment in our core is super important, right? And because to your point, if the top line and our brands are not healthy, it doesn't really matter. So we will definitely continue to lean into that. If you think about our Value segment, this was an important area of our strategy because it is a big part. Consumers are looking for brands at different price points. And you saw a step change for us in Q2 versus Q1. And it was done in a very, very specific investment approach, right? So some of the work around Keystone Apple -- Keystone Light Apple, the work on innovation with Miller High Life, some of the new packaging on Miller High Life that is coming out later this year. So that part of the portfolio does require investment, but in a very different way than our big brands do. And then to your point, in Above Premium beer, we're leaning into Peroni in a big way. We still have work to do in Blue Moon, but we're going to definitely lean into Peroni and a number of other brands across different markets. Miller Lite in Canada is a great area for growth for us in the Above Premium beer. And in using the balance sheet for beyond Beer is definitely an important priority. You saw us step into that space with the Monaco acquisition earlier this year. And we're going to continue looking at ideas that make sense to augment our portfolio. But you've got to do that at scale, right? You have to do that at scale. It has to do something to move your top and bottom line. And that's why we feel Monaco is a great example of leaning in. So we're going to use our P&L and balance sheet to help facilitate our business from the top line perspective. Now while we're doing that, you're absolutely right, we are being disciplined in a highly inflationary landscape to be focused on cost and drive our cost savings program. We're using the balance sheet in a careful way to make sure we are doing the dividend and buyback. But again, leaning first in terms of investing in our business.

I mean, I think, the only thing that I'd add, Kaumil, is that we are a highly cash-generative business. And so when we look at our capital allocation priorities, because of our cash generation, we are able to invest in all of those, whether that be through M&A, whether that be through investing in our capabilities or investing behind our brands. We're able to do that. At the same time, buy back shares, which, again, we feel that our shares are a compelling investment, and we do have a program, which we'll continue to execute against. But quarter-by-quarter, those allocation priorities may differ. In Q2, we took the decision to put our money behind M&A with the Monaco acquisition as well as maintain flexibility in our balance sheet by paying down some of our debt. So again, we have optionality when it comes to our uses of our cash, and we are able to invest in all of those big buckets around capital allocation.

Our next question comes from Drew Levine from JPMorgan.

Rahul, You talked to the beer industry freaking sequentially and expectation that it will probably remain volatile, but still thinking the year is better than 2025. But wondering if internally, your expectations for the industry have changed at all given what we've seen in the second quarter and so far in July? And also how you're thinking about the market share performance? You said you weren't happy with it. I think there was some expectation that it would improve relative to 1Q, which it did in the second quarter, but also for the balance of the year. But maybe where you're falling short of internal expectations there? And I guess, how are you thinking about the time line to sort of interventions playing out to better market share performance?

Yes. No, thank you, Drew. I think a couple of things. Thanks for your question. So first is on the category piece. Yes, I think to your point of, do we have a different point of view on what Q3 or Q4 might look like? I think broadly it is in line to what I said, right? I mean we knew there was going to be volatility in the category coming into this year. We also had an assumption of it's going to be better than 2025. How that volatility plays out, Drew, it is something we'll watch and see and react accordingly. So I'm not sure I can give you more perspective on the category performance. I think your share one is where I would say that's definitely an area that we focus a lot of time internally about, right? The category is something we all obviously lean into in terms of different occasions, but what we can do with our portfolio is important. And you heard that in my prepared remarks and Tracey's prepared remarks. We don't like where we are in terms of the improvement. Now we did have modest improvement in Q2 versus Q1 in terms of share, whether it was in value, whether it was selectively in our core. So we are showing progress. It's just we're not showing as much as we would like to. And so that is something we will continue to lean into. And that is a combination of making sure we have all the right commercial programs, right commercial actions. If you think about retail actions in terms of shelf space or placements or displays, features, we think we are pretty well positioned for the second half of the year. If you think about being competitive in the context of pricing in the U.S., we believe we are being highly competitive. And then if you think about supporting our brands in a big way and being clear in what these brands stand for, I think we're pretty excited about how our brands are showing up. Now if there's some course corrections needed or we need to lean in a little harder, we continue to do that, whether that's very local in particular cities and states or regions or whether that's at a national level. So market share is something is important. Again, I just maybe even flag out EMEA and APAC business, right? So Q2 was a highly competitive landscape. The World Cup played out in a different way in our U.K. business because, again, from a competition perspective. And we're taking the necessary actions. Our core brands there are some of the largest in the market in the category, and we're taking the necessary actions to make sure we are being reactive. So I understand your question around category, and we will manage through the -- any sort of volatility that has in the category. But internally, a lot of our focus is on making sure our brands show up in the right way, the different parts of our portfolio are showing up in the right way. And that's a combination of multiple levers on the commercial side, right? So retail pricing, innovation, that's an important, again, lever we have obviously pulled in parts of our portfolio and then the marketing investment to making sure our brands are well supported. So hopefully, that gives you a sense of just the thinking around the H2.

Our next question comes from Bonnie Herzog from Goldman Sachs.

I hope you can hear me.

Yes, we can hear you now.

Sorry about that. Just maybe a little bit of a follow-up just on everything that was discussed this morning. As we move through the balance of the summer, I'd be curious to hear from you what you're seeing in terms of category demand and really consumer behavior? And are there certain initiatives or maybe innovations that you're leaning into to accelerate your trends? And then could you also update us on the shelf and cooler space that you maybe took in the spring resets? I'm just curious like what that ended up being.

Thank you, Bonnie. And so maybe I'll address the different parts of your question. So let me start with consumer behavior. So from a consumer perspective, we definitely saw a change in Q2 versus Q1, right? But when consumers in Q1, whether it was low-income consumers, Hispanic consumers, I would say, was different than 2025, and we saw that in channel data in terms of how consumers came in, in convenience, but also in grocery and in food, right? And we did see a change in Q2. In Q2, convenience and dollar channel was probably the -- had the most success in food and grocery did not. We saw that in pack size, right? Historically, folks, singles play out well in our category. We saw a little bit of a decline in large packs, but progress in growth in small packs. So again, that shows you the action consumers are taking in the context of being pressured, how they're using dollars, how they're putting their money where they want to look at brands. If you think about our portfolio, and this is why your question around innovation, this is why you see us leaning into in different ways. So the value portfolio was important to making sure we can get our consumers price points that they're looking for. You saw us lean into that with Keystone innovation. You saw we've announced we have more innovation coming in the second half of the year with Keystone Ice, which is a high ABV, more single-centric innovation. You saw that even in High Life. So the portfolio and how we react into that becomes important. The other part you'll see us is obviously things like Monaco. Monaco, as Tracey said, is a business that sells majority in singles. There's a balance of ABV as consumers think about value. So for us, that is a great stepping into where the consumer trends are, where the consumer may be pressured, but making sure we have the right portfolio around that. On our core brands with Coors Light and Miller Lite, making sure we have the right price pack architecture with the right formats in those particular channels. So those are the actions I know we are taking both from an innovation and trend perspective. Your question around shelf and cooler space. So we obviously do that in the spring reset, and we did gain shelf space for our brands. If you think about the broad category, yes, the category saw some -- losing some shelf space in things like craft, maybe in some particular flavor subcategories. But if you think about our business, in the majority of our brands, so the core brands, Coors Light, Miller Lite, Value, Above Premium parts of our portfolio, Peroni, et cetera, we did see incremental shelf space. We saw strong retail execution, whether it's in the cooler, we saw strong execution in terms of displays. Coors Light continues to be one of our biggest brands in the context of displays and features. So our brands are pretty well being executed in retail. I mean Coors Banquet continues to see distribution gains and strong execution in retail, Peroni does. So we feel pretty good about our retail execution, our retail presence, how our brands are showing up, again, example of Topo Chico. So we are definitely holding our share of space. We're definitely growing that in different parts of our portfolio. But overall, I think we feel pretty good going into, obviously, the summer and going into the balance of the year. And then I think I got most of your questions, Bonnie. Thank you for that.

Our next question comes from Robert Ottenstein from Evercore.

Great. I missed a good part of the call, so excuse me if you addressed this already. But I was wondering if you could maybe talk about Monaco in a little bit more depth, what surprised you, where the integration is? And more specifically, my understanding is that something like 80% or so of the sales are in a handful or so states. What is the game plan to make it fully national at this point?

Robert, no problem. I'm glad you got back into the queue, and we won't hold that against you of missing our call in the first half. I'm joking, Robert. No, we appreciate you being here. So if you think about Monaco, I mean, it's been a great add to our portfolio. If you think about the criteria we laid out, we want to add 1% to 2% brands that give us scale. It's an important thing for us. It's an important thing for our distributor network. So your questions of we closed the deal in Q2. We've obviously been focused on integrating it, which is part of making sure it moves to our network. So I would say we're making good progress on that. You're absolutely right. The volume is concentrated in about 5 states. And it is concentrated in channels, in convenience with singles, right? So it really gives us the opportunity for runway in the future. The way we are approaching it is, one, we want to make sure we first execute in those states by staying and not dropping a case, right? So being disciplined in terms of the model they have. Just as a reminder, we moved about 80 people from the Monaco team also because what we don't want to do is lose the feet on the street, the execution ability. So job one is to make sure we keep and grow what we have today in those key states. We will look at channels in the states that we already have some strong presence in. Then in the other states, we continue to look at following a similar playbook that Monaco has is how do we make sure we win with convenience? How do we make sure we win singles? It goes to some of the other questions that folks had in terms of how consumers are leaning into this category and how do we make sure we're being competitive in that. So our goal is to obviously take this business national. We will do that in a measured way, Robert. We want to be careful in these integrations that we don't get in a way ahead of ourselves. So job one, transition to our network, make sure we are executing in the current state, start thinking about multiple channels in the context of the states where there is a lot of strength for the brand. And then how do we make sure we expand into other states with the playbook that Monaco has executed over the last 12 and 15 years. So we're pretty happy about this. We are -- I think we said this in our prepared remarks, we're tracking slightly ahead of what the anticipation was in both top and bottom line. So it has been a good add to not just our business, but also to our network, right? So it's a good point of conversation with our distributor network, with our retail. It creates some excitement. And then yes, we're going to keep leaning into the playbook that they had, but also expanding it with our, call it, infrastructure and our capabilities.

Our next question is from Steve Powers at DB.

I wanted to actually ask about EMEA and APAC and the outlook for the back half for improvement. I guess the question I'm grappling with is how much of the expected improvement that you're calling for in the back half comes from identified cost savings and restructuring benefits kind of already in hand, already in motion in your control versus an assumption that demand or promotional intensity or volume trends improve in the back half? And just if it's the latter, just your confidence around that.

Yes, fair question, Steve. Thank you for that. So if you think about EMEA and APAC, obviously, I would say, a little bit of a tougher start to -- in H1 this year. So a couple of things. Let me address your top line piece first and then your question of confidence in the balance of the bottom line. So we definitely have taken some more actions in terms of -- given the competitive context in EMEA and APAC. If you think about our business there, Central European business has been robust and strong. I mean, obviously, some headwinds, but the teams have done a good job of navigating through that. I would call out U.K. probably is where it has been a pressure from a consumer perspective, but then also from a competitive perspective. If you look at our portfolio there, I would say we definitely have some strong brands, right? Our core is some of the biggest brands in the U.K. and we've leaned into that with respect to innovation. So we launched Carling Black Label a few months ago. We're taking the necessary actions on Carling for the balance of the year. So we feel good about the actions we're taking in premiumization. Madri, obviously, is a big brand, and the team has done a great job of scaling it. It is, again, in a competitive context, but we have innovation already in market with 0.0 with Madri Limon and other parts of our Above Premium brands are doing well in the U.K. with Staropramen, Miller and Blue Moon. So from a portfolio perspective, a number of these actions are already in place, in motion and should give us a higher degree of execution in the second half of the year in terms of the top line. If you think about the bottom line and the cost savings initiatives, we did action a number of those earlier this year. I think we announced those. It just takes a little longer in Europe. But those are the ones that are going to give us the benefit in the second half of the year, right? Those are now in place. Those actions have been taken, and that is going to play out. The only thing -- other thing I would remind you is just timing in EMEA and APAC. U.K., as you know, November, December is a big season for us, right? I mean trading and the Christmas time plays an important role in the beer category. So for us, there is an element of timing also from a trading perspective in the U.K. So yes, it's been a little bit of, I would say, challenging start in '26 for EMEA and APAC, but I know our teams are -- we've got the right commercial plans. We've taken being disciplined on the cost side and taking the necessary actions to make sure we can really execute against our ambitions in EMEA and APAC for the balance of the year.

There are no further questions. This now concludes today's Q&A session and today's call. I'd like to thank everyone for joining, and you may now disconnect your lines.