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Lillian

Vice President and Equity Research Analyst at JPMorgan Chase & Co.

Lillian Liu is a Vice President and Equity Research Analyst at JPMorgan Chase & Co., specializing in the consumer retail sector with a focus on apparel, footwear, and luxury goods companies. She covers specific firms such as Nike, Lululemon Athletica, VF Corporation, Tapestry, and PVH Corp, achieving a strong performance track record with a 68% success rate on TipRanks, ranking in the top 10% of retail analysts, and generating average returns of 14.2% per rating. Liu joined JPMorgan in 2021 after starting her career at Barclays in 2017 as a junior analyst and briefly working at Evercore ISI, bringing over seven years of experience in consumer discretionary research. She holds Series 7, 63, and 86/87 FINRA licenses, along with an MBA from the Wharton School.

Lillian's questions to Bausch & Lomb (BLCO) leadership

Question · Q4 2025

Lillian, on behalf of Robbie Marcus, asked for a bridge to the 19% EBITDA margin guidance for 2026, focusing on operating expense components, SG&A leverage, and the confidence in achieving this improvement. She also asked about the outlook for reported free cash flow in 2026, given the $66 million reported in 2025, and the key puts and takes to consider.

Answer

CFO Sam Eldessouky explained that the EBITDA margin improvement stems from SG&A efficiencies, including fixed cost structure reduction and targeted investments. He noted Q4 2025 gross margin absorbed 80 basis points of tariffs. For 2026, he projected a 100 basis point improvement from gross margin (61% to 62%), another 100 basis points from SG&A, offset by a 50 basis point increase in R&D (7% to 7.5%), resulting in a 150 basis point total margin expansion from 17.5% to 19%. Chairman and CEO Brent Saunders added that the company achieved these results with 500 fewer colleagues, indicating foundational change. For free cash flow, Mr. Eldessouky expressed satisfaction with 2025 cash flow (42% conversion, 12 days reduction in working capital). For 2026, he expects progression to approximately 45% conversion, targeting 50%+ by 2028. He also noted a CapEx step-down from 6-7% of revenue in 2025 to 5-6% in 2026, further supporting free cash flow.

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