“Below the op profit line, we are expecting increases in both interest and tax expense, which combined results in a 300 basis point impact on EPS growth.”

In context

“nificantly outpace inflation. Given my background, this will be a key area of focus for me, together with our businesses, and Greg Smith and our global supply chain team. In fiscal year ’26, we will significantly increase investment in our growth drivers to maximize future growth. For the first time in four years, we are planning to grow R&D faster than revenue. We will also invest in sales and marketing. These investments will be deliberately focused on areas like Cardiac Ablation, as well as in Surgical Robotics and RDN, as we prepare for scaling the US launches of our Hugo robot and Symplicity hypertension procedure. On the flip side, we do expect to drive significant leverage with G&A expenses. The net of this will be an operating profit line that grows materially faster than revenue. Below the op profit line, we are expecting increases in both interest and tax expense, which combined results in a 300 basis point impact on EPS growth. On the interest, this is driven by the fact that any debt we refinance will likely be at higher rates given the current higher interest environment, whereas the pressure on the tax side derives primarily from the effects of Pillar Two. This leads to our expectation for approximately 4% EPS growth in fiscal year ’26, excluding the impact of tariffs. And foreign exchange is a neutral impact to fiscal ’26 at recent rates. For Q1, we would expect EPS in the range of $1.22 to $1.24, which includes minimal expected impact from tariffs, and a 1% to 2% headwind from foreign exchange at recent rates. Next, I’ll share with you our thinking on tariffs, which we laid out in our earnings presentation this morning. We built our expectations based on two potential scenarios. The low end of the potential”