Maintaining Growth Despite Tougher Comps
Q: How will you sustain growth despite tougher comps?
A: We're optimistic about delivering strong growth in the back half of the year despite harder comps because of good momentum and improving capacity. We've faced capacity constraints in certain products, but as challenges reduce and new lines come online, we're able to meet the demand, which exceeds supply.

Distribution Center Impact on Future Sales
Q: Are distribution issues causing sales to be pushed or lost?
A: Most of the impacted sales are pushed rather than lost. An IT-related upgrade caused shipping delays, but we are addressing the backlog and proceeding better now. We don't see this issue extending over multiple quarters.

Capacity Constraints and Expansion Plans
Q: How are you addressing capacity constraints?
A: We're investing heavily in manufacturing equipment to expand capacity, especially for our MyDay products. Demand exceeds supply, but new state-of-the-art production lines are helping us meet demand. We expect capacity challenges to be a part of the industry for many years, but we are bringing additional lines online to meet demand.

Operating Margin Improvements
Q: What factors are driving operating margin expansion?
A: The leverage from investments in distribution centers, manufacturing, and IT is starting to materialize. We're seeing improvements in costs and efficiency, which is leading to operating margin expansion. We're in early stages of leveraging these investments and expect to continue delivering margin improvements.

EMEA Performance Sustainability
Q: Can you sustain strong growth in EMEA?
A: Our EMEA team has been performing exceptionally, driven by key account wins, geographic expansion, and meeting demand with new products. While it may be difficult to maintain the current high growth levels quarter after quarter, we anticipate continued strong performance in the region.

China Weakness and Recovery Expectations
Q: What's causing weakness in China, and what's the outlook?
A: The weakness in ortho-k sales is driven by China, which pulls down our Asia Pac numbers. We need stability in that market, but we expect ortho-k to start growing in Q3 and see better footing in the back half of the year.

PARAGARD Expectations and Competitive Impact
Q: What are your expectations for PARAGARD sales?
A: We expect PARAGARD sales to be negative in Q3, offsetting a strong Q2 due to lumpiness from inventory and pricing dynamics. Full-year growth is expected to be flat to slightly up. There's potential competition from a low copper IUD under FDA review, but we don't know when it will be approved.

MiSight Progress and Competition
Q: How is MiSight performing and what's the competitive landscape?
A: We're seeing increased activity globally with more fitters and higher fitting rates among existing practitioners. MiSight is still the only FDA-approved product for myopia control, and as of today, there's no competition other than off-label use of other products.

Contact Lens Pricing Assumptions
Q: What are your assumptions for contact lens pricing?
A: We've seen almost everyone take price increases earlier this year, and pricing is holding steady. About one-third of market growth, which is mid to upper single digits, is coming from price.

Inventory Levels and Impact
Q: Any concerns about changes in inventory levels?
A: Inventory levels are a bit tighter as customers reduce inventory due to higher interest rates. However, we've already worked through most of this, and we don't see any real risk associated with inventory contraction.

CapEx and R&D Investments
Q: What are your focus areas for organic investment?
A: We're investing significantly in capital expenditures to expand manufacturing capacity, especially for MyDay products. We also have exciting R&D projects within CooperSurgical and MiSight, although we can't share specifics yet.

Capital Allocation Plans
Q: How are you thinking about capital allocation?
A: Our priority is organic investments, which offer higher returns and lower risk. We're also paying down debt, and we're open to evaluating acquisitions if opportunities arise that make sense.

Tax Rate Guidance
Q: What's driving changes in your tax rate outlook?
A: The lower effective tax rate is due to stock option exercises, which are hard to forecast. Our underlying organic tax rate is around 15% to 15.5%, and we expect that to be the starting point for next year.

Free Cash Flow Expectations
Q: What's your outlook for free cash flow?
A: We expect free cash flow to be about $100 million higher than last year. While taxes, interest, and FX are headwinds, we're doing the right things to drive higher free cash flow, and CapEx investments are for the right reasons.